How to avoid project failure by heeding the warning signs

Despite advances in project processes and organisational maturity, project failure is more common than many would like to admit. Learn how to avoid project failure by recognising red flags, and find out why early identification and intervention are so key.

Project failure is far more common than organisations will admit. Three in five organisations fail to deliver most or all the benefits of their projects; more than 70 per cent struggle to deliver projects on time; and almost 60 per cent do not complete their project within budget – and less than half of project managers feel their organisation manages projects and programmes effectively.

Fortunately, there are many warning signs that precede failure. These will differ depending on the project type, complexity, the size of your team and the industry in which you operate, but there are a number of common red flags that can crop up regardless of context.

Being aware of these signs and spotting them early, gives you a chance to avoid project failure, rescue the initiative and salvage some benefits. With the right expertise and approach, failing or stressed projects can usually be brought back on track to either deliver the original outputs and outcomes, or a re-scoped result that recoups all or part of the investment.

Let’s have a look at four of the most notorious warning signs to keep on your radar:

RED FLAG NO.1: The project plan is superficial and key details are absent

Warning signs: There’s a lack of understanding and clarity about the purpose and intent of the project, for instance:

• You have a hard time describing the project goals, its business case, outputs and benefits, to others.
• Project team members find it difficult to proceed because next steps are not clear.
• Key resources, from experienced personnel to funds, are unallocated or allocated incorrectly.

Cause: Poor project planning.

‘Poor planning’ and ‘vague goals’ are two of the most significant factors in project failure. Two in five project managers cite ‘poor requirements gathering’, one in three cite ‘poor upfront planning’, one in five cite ‘inexperienced project manager’ and 20 per cent point to ‘limited/taxed resources’ as key reasons for failure. A common failing of organisations is to cut short planning in their rush to secure funding.

Remedy: Start as you mean to go on; a thorough plan is essential to avoid project failure. Before developing a plan, the organisation must address the business case and requirements upfront, including outlining success criteria, before realistically examining its resources, including time, budget and suitable personnel. Already commenced the project? An expert remediator should be able to reshape the project plan to make it feasible given your resources. This may mean an overhaul of scope, budget and schedule. Effective assurance can also work to cut through any cultural and cross-department issues, re-aligning the organisation behind the initiative by allocating the appropriate resources and re-injecting the velocity required.

RED FLAG NO.2: Stakeholders are confused about their roles

Warning signs: Progress may be haphazard. Behaviour to look out for includes:

• Clashes between more than one set of stakeholders who believe they are responsible for particular activities or outputs.
• Neglect of an area of responsibility with no one committed to it.
• Stakeholders not prioritising key activities or outputs, or prioritising the wrong things.

Cause: Lack of ownership.

Poor accountability can often be attributed to unclear ownership and a lack of understanding with regard to how different stakeholders fit within the project ecosystem. This results in key stakeholders – including team members and sponsors – getting lost along the way. The same issue can also apply to governance members, and projects with multiple sponsors – a sure-fire recipe for confusion!

Remedy: Be direct about roles so that all stakeholders understand their place in the wider project. Foster ownership through active conversation; an independent remediator can help you gather feedback and incorporate responses into the project going forward. Even if you can’t always act on feedback, it’s important to show you’ve listened.

RED FLAG NO.3: The project always seems like it’s on the edge of failing

Warning signs: Regular requests to extend the project parameters, or signs that risks have been overlooked, for example:

• The project team keeps asking for more funds or more time to pull the project back from the brink.
• Changes are often a complete surprise rather than planned-for and managed.
• Small snags have the potential to grow into major failure points.

Cause: Insufficient contingencies.

More than one in four project managers cite ineffective risk management as a cause of project failure. In particular, large projects tend to suffer from over-optimistic risk management where mitigation strategies and contingency planning is inadequate.

Remedy: Take a realistic look at your risk exposure. To prevent poor risk management from derailing your project, risk plans need to specify early indicators that prompt when contingencies need to be used. If necessary, seek expert advice to assess whether the contingencies are realistic, sufficient and acceptable to the project owner.

RED FLAG NO.4: Project updates do not correspond with reality

Warning signs: If updates seem suspiciously rosy, particularly when there have been ongoing issues, you may have a ‘watermelon’ project on your hands – in other words, one that’s green on the outside, red on the inside. Keep a lookout for:

• Issues being ignored or improperly logged.
• A cover-up, where team members may not be sharing the true state of things.
• Project tracking tools that may not be suited to your project.

Cause: Your project monitoring and analytics don’t give a clear picture of the project.

Project tools may not be fit for purpose; issues aren’t being properly tracked and examined; or your team doesn’t feel it is safe to tell the truth.

Remedy: For better project control and active governance it may be a good idea to bring in a party independent of the project team to provide transparency and uncover the source of the dysfunction. This could be internal, for example a reviewer or project management office (PMO), or external, such as a consultant. They may suggest better monitoring tools and, if required, revise the plan to account for previously unaddressed issues. Unbiased experts are especially useful if it’s not psychologically safe for team members to reveal problems directly.

Keeping projects on track

Being cognisant and alert to these common red flags will help you identify issues before it’s too late. In most cases, struggling projects can be salvaged if the organisation brings in expert advice at the right time – in other words, as early as possible. Remediation may include realigning projects to deliver their original outcomes, which could mean an overhaul of scope, budget and schedule, or a plan to salvage benefits to secure some return on investment even if the original aim of the project falls by the wayside.

Better still, take precautionary measures, such as conducting a project health check or employing continuous assurance services. According to the Australian Institute of Project Management, organisations delivering successful projects are more likely to have established independent project performance reviews. Regular reviews can help to reveal hidden signs of trouble, prevent issues from escalating, and help to pinpoint where delivery improvements are needed. Taking the initiative in this way is becoming increasingly crucial for project success.

Interested in taking preventative action to safeguard your projects? Find out more about our assurance and/or remediation services by contacting our expert team or calling 1300 70 13 14 today.