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 explore 9 business fundamentals, from business needs and market reality to business impact and business urgency.  The result is a powerful one-page tool – that enables executives to ensure that everybody is on the same page with regard to their initiative and why it matters:

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

Traditionally project success was measured in terms of the project plan and Gantt chart.  But that is no longer enough. 

Just because a project deliver to scope, on time & to budget, does not mean it is a success.  Too many projects suffer from ‘project myopia‘ – where they lose sight of the 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?