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Update: This post was orignally published on June 17, 2015 and was updated with new information on February 20, 2020.
If you had to do it all over again on your most recent creative project – what would you do differently this time around? What sort of “lessons” did you learn?
Project failure is a part and parcel of any agency’s life. The more complex and creatively daunting the project, the higher the chances of failure.
Being able to conduct a project postmortem and draw lessons from failure is an understated skill. Every failed project tells you what not to do on your next project.
In this post, I’ll show you the common reasons why projects fail, how to analyze failed projects and what you should differently on your next creative project.
Why Projects Fail
A wide-ranging PWC study of 10,640 projects across 30 countries found that only 2.5% (not a typo!) of companies successfully complete 100% of their projects.
Which is to say, 97.5% of projects fail to hit their originally stated targets.
Project failure is astonishingly common, especially for complex projects. One Gartner survey found that for projects with a budget beyond $1M, the failure rate was 28% (compared to 20% for projects under $350k).
Even if projects do succeed, they usually suffer from a lack of 100% completion (see above stat) or budget overruns. A study published in HBR found that five out of six projects had an average budget overrun of 200% and a schedule overrun of 70%.
The actual cost of project failure can be immense. PMI estimates that for every $1 billion spent on a project, $135M is “at risk” because of the threat of failure.
The important question to ask now is: why do projects fail, and what can you do to mitigate future failure?
Here are some of the most common causes of project failure.
1. Inaccurate Requirements
In PMI’s annual Pulse of the Profession survey, 38% of respondents cited “inaccurate requirements” as a leading cause of project failure.
This is particularly true for software projects where clear requirements are necessary to deliver something clients actually want (and not what the sales team sold them)
2. Poor Communication
Communication is the perennial bogeyman for project managers. PMI estimates that nearly half of all project budget risk is due to ineffective communication. Poor communication leads to project failure one-third of the time.
3. Undefined Project Goals
30% of respondents in PMI’s Pulse of the Profession survey identified “undefined project goals” as a cause of project failure.
This problem usually arises when project goals either change over time (without clear communication from stakeholders) or when they were never defined clearly to begin with.
Since meeting goals is the success criteria for any project, undefined goals make the project a failure, by default.
4. Inadequate Cost Estimates
Estimating and budgeting are the foremost responsibilities of a project manager. If the initial cost estimates are incorrect, however, it makes it difficult for a project to be defined as a “success”. You risk either budget overruns or inadequate funding.
This is one reason why PMI’s aforementioned survey had 29% respondents citing “inadequate cost estimates” as a cause of project failure.
5. Inadequate Sponsor Support
A project’s sponsor is its champion within the client’s organization. From getting quick approvals to adequate funding, you need the sponsor rallying behind the project to find success.
What happens when the sponsor loses interest or moves to a different role? As this Dilbert comic puts it, it's not always easy to get access to high-level sponsors.
Failed projects, of course. This is why 29% of PMI’s survey respondents cited inadequate sponsor support as a cause of project failure.
6. Quality Issues
Quality issues plague complex projects and often lead to failure. The problem is particularly acute in projects where there are no fixed parameters to define “quality”.
Surprisingly, a Gartner survey of IT projects found that quality was a bigger cause of failure in small projects than in large projects.
7. Poor Project Management
The success of a project is inherently tied to the quality of high-level planning, resource management and activity management. In a survey of 2,500 project management professionals, 36% respondents attributed project failure to poor management practices.
Ergo, if your project managers are inexperienced or incompetent, your project has a high chance of failure.
8. Lack of Talent
In an earlier post, we identified “lack of talent” as one of the leading causes of project failure. This is particularly common in creative projects where talent differences can be exponential rather than marginal.
Of course, this lack of talent manifests itself only when there is a mismatch between what your sales team promises and what you can actually deliver.
9. Unmanaged Budget
Any budget left unmanaged or with very little oversight is likely to cause problems on the creative project. There are too many team members, vendor bills, etc. coming in on the project for it to just stay on budget out of good luck.
It takes management and oversight because so many times, the average project manager may be assuming things are not happening while in fact they are. Such as:
- One or more of his many creative project team members could be overcharging their time to his project every week out of laziness
- Vendors could be overcharging the project
- Accounting may have project charge numbers listed incorrectly which may be difficult or impossible (or not worth their while) to fix when the project is over, leaving the PM looking like the failure
10. Un-informed Project Team
This is an offshoot of poor communication - bad communication, inaccurate communication, or sometimes, no communication at all. If you start seeing that work is not happening when it should or the wrong work is being performed, it may be a communication issue.
Is the project team getting copies of the revised project schedule? Are you conducting weekly project team meetings to make sure everyone is up to date on project status/assigned tasks and all are on the same page?
If these are not happening, then you always have the possibility of work falling through the cracks and team members making their own assumptions about what they should be doing. That can cause the wrong work - or no work - to be performed, both of which can be very damaging to the project timeline and budget.
Keep the team up to date with project status and schedule revisions as well as weekly and ad hoc meetings, calls and email.
11. Dissatisfied Clients
If the project client is becoming more and more frustrated or dissatisfied, it may be a sign that the project is heading south.
Don't let this situation go far. Step in and call that all-important meeting to find out what is causing concern for the client. It may be a simple clarification or exchange of information that needs to happen.
On the other hand, it may be something big that the project manager and/or team has dropped the ball on. Either way, you need to find out.
Besides these, there are plenty of other reasons for project failure - cultural misalignments, inadequate funding, procrastination by the project team, etc.
In the next section, I’ll show you how to analyze and draw lessons from failed projects.
How to Analyze Failed Projects
A vital, but understated PM skill is the ability to analyze a project and draw lessons from its failure (or success). Conducting this postmortem can tell you a lot about what works, what doesn’t, and what you should do to improve in the future.
It’s important to approach the project postmortem as an analysis, not an investigation. Don’t use this as an excuse to assign blame or shift responsibilities. Instead, use it as an opportunity to bolster your weaknesses and amplify your strengths.
Here are some tactics to use in your project postmortem:
Start With a “Pre-Mortem”
A “pre-mortem” is a unique approach to improve creative project success rate.
In a pre-mortem, you assume that a project has failed even before it has started. You then gather your team and try to find all potential causes of project failure.
Ideally, you want to do this right after kick-off. This will help you spot potential conflicts before you even start.
“The whole idea behind this is that in order to try to avoid for your project to fall flat on its face, you need to get some perspective. The best way of getting perspective is to get feedback from outside.”
Embrace “Mini postmortems”
Waiting until project completion to conduct a postmortem isn’t always productive. Depending on the project size, this can take months and even years, diluting any lessons you might draw from the analysis.
Instead of waiting until project end, try conducting “mini postmortems” at key milestones. Every time you hit the next stage in the project, gather your team and ask: “what did we do wrong so far? What did we get right?”
Doing this will help your team spot issues before they snowball into major problems. It will also give you the flexibility to modify the team composition to ensure success for the remainder of the project.
Collect Feedback Before Meetings
While the postmortem meeting is a common practice in agencies, it rarely leads to substantial insight. The involved parties either shift blame or don’t speak out for fear of being rebuked. The confrontational, time-constrained nature of such meetings also leads to short-gap solutions, not long-term fixes.
Workaround this problem by gathering feedback from all involved parties before the meeting. Focus on the “why” instead of the “what”. You want to draw deep lessons, not just superficial answers.
Make the answers to these questions the central focus of the postmortem meeting.
Keep postmortem Meetings Organized
It’s natural for any postmortem meeting to be uncomfortable for participants. This is why it is vital that the project manager keep the meeting as focused and organized as possible.
Here’s a four-step process for keeping the meeting on track:
- Recap the goals of the project and the objectives in the current stage.
- Review the results of the project so far in relation to the stated goals.
- Analyze the results in relation to the feedback already gathered.
- Ask all participants to give their “whys” for the project results.
Focus on Key Failure Areas
In your postmortem meetings and questionnaires, make sure that you focus on the failure areas I shared earlier. Ask both qualitative (“what”) and quantitative (“why”) questions.
A few questions you can ask are:
- Did you meet the stated project deadlines?
- Did the project exceed cost estimates?
- Did the project achieve the originally stated goals and objectives?
- Did the project meet our quality standards?
- Was our communication up to scratch?
- Were the requirements clear throughout the project?
- Did you feel you had sufficient backing from stakeholders and project sponsors?
- Would you want to work on similar projects/clients in the future? If not, then why not?
Once you have answers to these questions, create a document outlining your key findings and takeaways.
This will help you run more organized projects in the future.
What to Do Differently On Your Next Creative Project
The project postmortem will give you insight into the specific causes of your project’s failure.
However, there are a few general things you should strive to do for all projects:
You’re probably tired of hearing it, but communication is Job #1 in my book for project managers.
No one failed from over communicating information on projects. It doesn’t guarantee success, but it sure helps to avoid failure sometimes.
If your team, your client and your management know where things stand, who is assigned to what and what the issues are, then fewer things are likely to fall through the cracks. Your team members will also show more ownership and accountability for their tasks and for the project.
Plus, strong communication ensures that your client will be more engaged, which can improve sponsor/stakeholder.
Engage the Client More.
Keeping the client engaged is critical because a disengaged client may be unavailable for information and for decision making when you need them.
Slowing the project down at critical points when you need your client to be available can cause timeline issues, budget issues and can lead to missed deliverables and milestone deadlines.
Also, if your client isn’t available when you need feedback on a requirement interpretation, you could end up designing the ad or marketing effort differently than was needed due to misinterpretation of that requirement.
That may not seem like much at that moment. But it can definitely snowball, leading to a final project rollout that doesn’t quite meet the overall requirements for the client.
Manage the Budget More Closely.
In my opinion, the budget is probably about the hardest thing to keep in check throughout the creative project. I can’t remember the last time I brought in a project significantly under budget. Usually, if I’m lucky, I come in on budget, or at least within an acceptable five to ten percent over budget.
Managing the budget weekly and reforecasting with actuals updated weekly is key to staying on top of your creative project budget. Trust me: you can’t place too much oversight on this one area of the project.
Adopt Better Project Management Practices
As I mentioned earlier, poor project management is one of the leading causes of failed projects.
This is sometimes personnel related (i.e. you have inexperienced managers) but more often than not, it’s technology related (i.e. you don’t have good PM practices and tools).
Adopt a creative project management tool like Workamajig to streamline your projects. This will help you with everything from budgeting to task management. At the same time, train your project managers in PM best practices to resolve any personnel related issues.
The causes of project failure are usually the same across industries. If you can foresee these causes and work proactively to resolve them, you’ll find that project failure is neither inevitable nor unavoidable.
Even if a project doesn’t meet its stated goals, there are a lot of lessons to be drawn from its failure. An effective postmortem process will dramatically improve your success rate on future projects.
Finally, for your next project, a few simple best practices - effective communication, stakeholder engagement, and better PM tools - can help ensure future success.
How about you? What would you change or do differently on your last project or your last few projects, given the chance?