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Tackling the No. 1 Reason for Project Failure

The number one reason for project failure – guess what it is?  Well, it is changing business needs, or to be more precise changing organizational priorities. It tops the list of factors identified by executives as the primary cause of project failure – accounting for a whopping 41% of all failed projects in 2021. That is according to data from PMIs Global Pulse Survey of the same year.

Changing Business Priorities

In a time of accelerating change, business needs and priorities cannot stand still.  They must reflect emerging market opportunities, as well as threats. So, changing business needs and priorities are inevitable, even welcome. However, this also means that projects getting disconnected from business needs and priorities is a continual risk that needs to be managed.  

Changing organizational priorities doomed just under half (41%) of failed projects, while inaccurate requirements gathering came in a close second at 39%1.. That made it twice as important as project manager inexperience or resource shortfalls, and 4 times as serious as task dependencies.

The gap between projects and business priorities is an insidious problem – it starts small, but can, if unaddressed, grow to eventually make a project or initiative irrelevant. Checking for alignment between projects or initiatives and business needs and priorities needs to happen at regular intervals across the project life cycle.  In this way, any emerging gaps can be addressed early. That is important because the later they are identified, the more costly and difficult they are to address.

Two Responses to Changing Needs

There are two responses to the challenge of changing business needs and market realities:

  • The first is to identify the business need more clearly at the outset, to ‘lock it down’ and then rigidly conformed to that need.
  • The second is to accept a business needs will evolve and change throughout a project, adapting to those changes is key.

The first strategy is a futile, even dangerous one. The challenge is not to prevent business needs from changing but to more readily adapt to those changes.  That demands an agile approach.  But where months have been spent getting the project plan and Gantt chart approved, people may be reluctant to revisit it.  The cost of making changes at simply too high – a cost that is measured in terms of time taken up by bureaucratic approvals, committees, paperwork and so on.

9 Ways to Adapt to Changing Business Needs

In checking project-business alignment we look to 9 factors, from business needs and market reality to business impact and business urgency.  These are represented in the form of a wheel as shown in the visual here. This is where ‘the rubber meets the road’ in terms of the execution of the strategy.

Discovering that a project is out of alignment with business needs is never a bad thing.  Either it enables adjustment to be made to restore alignment or points to the ‘end of the road’ which need not necessarily be a bad thing either.

The ability to jettison projects that no longer adequately reflect business needs is an organizational virtue.  Where a project is retired because it no longer makes sense, this should be seen as a win for the organization. Moreover, there should be no shame attached for those involved.

Connecting with Changing Business Needs

If the needs of the business and the priorities of the strategy were static, ensuring the alignment of projects with strategy would be relatively straight-forward. It would be sufficient to capture business needs at the start of a project and then to faithfully deliver against the project plan confident that business needs would be met.  

The problem is that business and stakeholder needs are continually changing.  Therefore, a project or initiative could be judged a success – delivering on time and to budget as set out in the project plan – and yet end up missing the mark in terms of addressing the needs of the business and its key stakeholders. How to ensure that this does not happen?

Strategy – Where the Rubber meets the Road

It is essential that project leaders check their progress against not just the project plan, but also the needs of the business and its stakeholders.  With this in mind, we have created a tool called the ‘Project Strategy Wheel’.

A Strategic Initiative is where ‘the rubber meets the road’ in terms of the execution of strategy.  That is the idea behind the ‘Project Strategy Wheel’ – to look at an initiative from a business perspective, specifically a C-suite perspective.  This can be seen from the labels, including Business Need, Business Impact, Business Urgency and so on. While this is called the ‘project-strategy wheel’ it might be more accurate to call it the ‘project – business wheel’.

9 Key Pieces of Data Connect A Project to Strategy

At first glance there is a lot of information on the wheel – 9 labels – but if we take a moment to go through it – it should readily make sense and its value become clear. 

Each of the 9 parts of the wheel is a key piece of information and data that connects the project or initiative to the needs or strategy of the organization.

The dark part of the wheel has two parts – at the top it is labelled ‘Strategic Ambition’ and ‘Project Confidence’ at the bottom.

These two factors are among the most revealing for any project, but keeping them in alignment can be a real challenge.  For example, ambitious projects are likely to test the confidence of the organization, but over-confidence can be dangerous. Confidence and Ambition are complex variables and are explored via the priority track which maps KSFS and Risks based our research with lots of teams. 

This is a stakeholder centric view of the project or initiative, with the needs and expectations of internal and external stakeholders at the centre of the wheel. 

If you move out from the centre (between the spokes as it were) there are 4 quadrants representing the core of the project.  There are 2 quadrants in red – Business Impact and Project Investment / Budget.  These are the numbers that matter most to the CFO and ultimately to the business.

It is worth pausing here for a moment to point out that the text says ‘Business Impact’ – so it is not just about the results or outputs of the project, but how they impact on the business.  Being able to distinguish project activities and outputs from business outcomes and impact is important. It is central to the business case justification for the project.

The other 2 quadrants (shown in white) also indicate the importance of the project – they are Business Urgency and Business Unusual (a proxy for complexity).  The more complex and urgent a project is, the more demanding its delivery is likely to be.

 

On the very outside of the wheel is ‘Business Needs’ and ‘Market Reality’ – these are essential to keeping the project ‘on the ground’.

Losing contact with the needs of the business or its market, could put the success of the project in peril. However, this is a constant danger as ‘Business Needs’ and ‘Market Reality’ are dynamic, rather than static. Defining these factors at the start of a project is not enough, they must be constantly checked and updated.

Why a Wheel?

As a metaphor, the wheel is apt, not just given the relationship to the pitstop model and the track, but because a project or initiative is dynamic rather than static. It needs to maintain movement and momentum – it cannot stand still.

The challenge however is to ensure that all the parts are aligned and can move in tandem. For example, that the level of urgency is in keeping with the needs of the business and enabled by the allocation of resources (investment/budget).

  1. PMI Pulse of the Profession 2021 (2021) Link: https://www.pmi.org/learning/thought-leadership/pulse/pulse-of-the-profession-2021 []

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