Are All Projects Doomed to Failure?

Every couple of weeks, I share a guest post from some excellent friends & colleagues in the field Project Management & Leadership.  It is a great honor to have these folks contribute to Kelly’s Contemplation and I hope you enjoy their input as well.  This week, I am happy to have Paul Naybour of the England-based Parallel Project Training provide the weekly post.

Before we get into it, here is your video of the week

The evidence from the past?

Much of the evidence on project management indicates that the chances of success are very low. Bent Flyvbjerg’s work, comparing project out-turn costs with the original budget, tends to imply that nine out of ten projects significantly exceed the budget and overspends are between 40% to 60%. He identify three reasons for these overspends

  1. Insufficient models of the project costs i.e. we don’t fully understand the scope, risk, constraints and assumptions.
  2. Optimism bias which is a human tendency to view the future through rose tinted glasses.
  3. Strategic misrepresentation of the costs because a collusion of interests from the sponsors, consultants, contractors  and project managers all have a vested interest in underestimating the costs and exaggerating the benefits of the project. In this way they can improve the chance of the project being funded.

Any project manager involved in developing a business case or preparing a bid will recognise the influence of these factors on the business development or business case of a project. Too often the project is kicked over the fence for the delivery project manager to drive a project team with insufficient resources, budget and no contingency. Am I over exaggerating?

The forecast for the future?

The outlook is not good in these tight economic and competitive times where we see project budgets getting tighter, contingencies being removed and resources overstretched.  As organisations, both public and private, aggressively compete for a smaller and smaller pot of money this will only result in even more pressure to start a project with insufficient budgets and resources.

Is there light at the end of the tunnel?

So looking forward it seems in the short term that projects will continue to overspend, much as they have in the past.  So are we all doomed? Well I think not.  Just look back at some of the “failures” of the past, including

  1. St Paul’s Cathedral
  2. Sydney Opera, House
  3. Union Pacific Railroad

I would have been proud to have delivered a project half as successful as any of these, but in short term economics they suffered from all the issued identified by Bent, but I would argue that for mankind and human endeavor they were all fantastic successes. Comments?

Paul Naybour is business development director with Parallel Project Training, which offers on-line, in print, on iTunes and face to face APM Project Management Training. He also follows and contributes regularly to #PMOT and his own blog at Project Accelerator.



Resources:

  1. Why Are We Always Late? from the folks at Back From Red
  2. Recovering Troubled Programs Part I & Part II from the folks at A Girls Guide to Project Management
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5 thoughts on “Are All Projects Doomed to Failure?

  1. Thanks for the comments as always it nice to see some debate. I am arguing for recognition that political, economic and time pressures cause us to systematically underestimate the difficulty of many projects during the feasibility phase. Senior Managers and organisations need to recognise these weaknesses when evaluating projects at the approval stage. Would I still proceed with this project if the cost were significantly increases and the benefits reduced? If the project can pass this scrutiny then it has a chance of being a good investment for the organisation.

    Clearly once the project is live then effective use of the PM approach will increase the chance of success but to what extent should we beat ourselves up to deliver unachievable objectives set by the bidding team or the project sponsor.

    The London 2012 Olympics is a good example. The bid was cost at £2.3. As soon as the Olympic Delivery Authority was appointed they re-evaluated the cost and redefined the budget as £9.8bn. Since then they have lived within this revised budget despite the banking issues and fall in the value of house prices. If they had tried to deliver within the unrealistic £2.3bn it would have been an ongoing story of ever increasing cost. Much better the reset expectation from the start and then focus on getting the job done.

  2. These reasons and other are well known sources of project “troubles.” Failure is a marketing term used by Standish and their VERY poor statistics.
    But this article and many like it don’t suggest any corrective action.
    As one working in US Defense and Space, over budget and behind schedule is a common state. But we would never let a program manager not have a “get to green” plan.
    Where are similar approaches being taken in other domains. DoD 5000.02 also mandates incremental project life cycle to limit the exposure of over-runs. They happen and many times a large.

  3. I fully agree with the three reasons as identified by Bent for project overspending. Combined with these reasons and recession, I am skeptical about the light at the end of tunnel BUT are you arguing that definition of project success should be modified to take into account greatness of project and its stature as achievement for mankind (projects like Union Pacific Railroad, Sydney Opera) – even if project has gone beyond cost/scope/schedule baselines?

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