Why Transformation Projects Fail?

“Why do projects fail?”

Whether you are a certified professional or just an accidental project manager – you’ve heard and answered this question before. Indeed, for as long as I remember myself, this subject has been so dear to the public at large that every business magazine and website would offer their recommendations. Google for it, and you will get over 3 Billion hits!

But the rate of success has not changed much.

TL;DR version of this article

If you don’t like reading, you may watch the TL;DR video version of this article here. It has more details and visuals from the COMA collection.

Do you know what the project success rate is, today?
From your experience, is it close to 30%? 50%? 75%?

Remember your choice and we’ll get back to it.

But first, let’s look at this question together and get to the root cause of the project failures – and also figure out why this root cause has eluded us for such a long time.

Same Question, Same Answers for One Hundred Years

As business and technology evolved, the definition of the failed project changed, but not the question:

  • Why tech projects fail?”
  • Why software projects fail?”
  • Why Lean projects fail?”
  • Why DT projects fail?”
  • Why culture transformation projects fail?

Likewise, the reasons for failure did not change much either for decades. You must have heard all those – or even offered them yourself during those mandatory postmortem exercises:

  • Unrealistic expectations
  • Internal resistance
  • Wrong technology …
  • Insufficient resources
  • Scope creep
  • Change of strategic direction
  • Poor communication
  • Suppliers
  • No business case
  • Unreliable estimates

If you take a close look at the causes, many if not all could be traced back to project management flaws. Indeed, the blame is often placed on the Project Manager.

  • Poor Project Management

Although being a scapegoat comes with the PM job, as a certified recovering project manager myself, I must defend the profession here and add senior management to the guilt loop. The role of the project Sponsor is critical, it determines the success of the project by 35%, but if the necessary senior leadership involvement is not there, the PM is often powerless to improve things.

  • Lack of leadership

If our root cause analysis is on the right track, we may conclude that it is NOT the nature of the project, but likely the deficiency of PM and Leadership that led to the project’s failure.

According to research cited by HBR, only 35% of projects are successful. That means almost 2 out of 3 projects fail.

If that’s right, my next concern is: How’s that possible?

  • The PM methodology exists for at least a century
  • the PMI organization has been officially known since 1969
  • PMBoK is in its 7th edition already
  • an infinite number of advanced PM methodologies and tools have been added to the PM arsenal: Agile, Lean, Scum, etc (add your favorite)
  • As for Leadership, we have more leadership development content published than anyone can read in a lifetime, even if you remove all leadership porn

The Real Root Cause

Are we missing something beyond Project Management, do not see some big picture?

Apparently, yes. Here’s my take on the root cause.

For centuries, our activities were operations-oriented and structured hierarchically. All organizations were built like the army – or the church: the best experience that mankind had at that time. Having a strict multilevel hierarchy was part of the story. Among other things, the hierarchy was essential to sending and receiving information throughout the organization.

The shift to doing business project by project (as opposed to continuous production processes) was a huge step forward. Many organizations successfully modified their structures to accommodate the new, project methodology, achieving a step change in productivity.

However, most Project Managers were trained with an emphasis on order and processes. Not surprisingly, quite a few successful PMs I have worked with over the years have been ex-military.

This practice, in turn, added to the global perception of the PM as someone purely technical, or, rather responsible for the “hard” matters, while the “soft” aspects of management were traditionally left with line managers outside the project or worse – delegated entirely to the HR department.

That project management style was acceptable – for the pyramids, and later on – for labor-intensive and long endeavors. But lately, the nature of our work has evolved. Most routine activities were taken over by computers – IT and Artificial Intelligence. They are now doing all the “hard” work, and the area of IT/AI “responsibility” is growing by the day. Plus, business information – critical to keeping the organization effective and efficient – can now be almost instantly pushed or shared across any network, regardless of its structure.

This development leaves us with more time, attention, and bandwidth that we could dedicate to the “soft” matters. And it is the “soft” area that defines today’s efficiency and will be decisive for tomorrow’s competition.

“Soft stuff” is also the area where most businesses are lagging. Having been focused on “hard” matters for centuries, we are slowly catching up on the soft side, while technology advances at a higher pace.

The root cause of all project failures is shortcomings in the “soft” area of business management.

  1. PMs are focused on tangible deliverables.
    Today in the traditional “distribution of labor” an average PM is not expected to take care of “soft” matters nor is he skilled to do it. Most project managers are classically trained (in engineering, technology, finance, or military) and prefer tangible measurements and measurable causes. This trend reinforces the general perception of the project manager’s role as something very technical and “transactional” – and further distances the manager from the “soft stuff”.
  2. Key stakeholders fail to take care of the intangible results.
    The project Sponsor and senior management, often with the same academic roots as the PMs, are not capable to take on the “soft” scope. In addition, the influence of the Sponsor on the result of the project is not perceived as significant. Sponsors, often by virtue of their job description, are required to be “responsible” for more projects than it is humanly possible to take responsibility for. Hence, their “non-influence” harms the projects further (for example, prioritization of projects in the company cannot be maintained, which creates confusion).

Overall business performance declines as the “soft” aspects of management are delegated to the line managers outside the project, or worse – fully delegated to a department with a counter-intuitive if not insulting name Human Resources.  

To defend their inattention to “soft stuff,” they all cite Peter Drucker. Remember?: “If you can’t measure it, you can’t manage it.”  However, Drucker never implied that we should ignore the “soft matters.” On the contrary, those who do measure and manage them – win.

This is especially important for transformation and change management projects.

Today, successful companies are good at balancing soft and hard. To succeed tomorrow, they must be 99% soft.

Companies of tomorrow, with the help of IT/internet/cloud, will all become projects. And since they are all created to meet a specific need that has arisen, then by their nature they will be startups. Thus their PMs will be de-facto founders and CEOs, in most cases, of lean startups, with a flat structure, and without job descriptions. (They will neither have the time nor the need to write and update the JD.) To make sure that people work towards the same outcome, effectively, and happily, we must learn how to build teams that are aligned internally and with the purpose of the organization.

Team members are only effective when they are internally aligned. They will not have to ask their supervisor what to do every other moment – like your hand will catch the ball or scratch your head, without you giving continuous instructions to your fingers, or even noticing the itch. 

What needs to be done to succeed tomorrow?

I hear your question: SO WHAT?!
How do I go about it if I am responsible for a transformation project?
How can I measure “culture” or achieve “cultural alignment” in real life?

Bookmark this space, we’ll talk about it in Part 2: Why Do Projects Succeed?