Project Failure | 7 Reasons Why Projects Fail & How to Avoid It

Updated Aug 3, 2022.
causes-of-project-failure

Project failure is an all-too-common occurrence in the business world. Even the so-called big brands with their “world-class” project managers and project teams, and large project budgets have their fair share of big project failures that make the headlines. 

You may have experienced your fair share of project failings. Imagine starting on a project you like, taking out time to carry out the research and draw out the project plan, project estimates, and work breakdown structure (WBS). You even assemble a good project team.

All of a sudden, during one of the phases of the project management life cycle, things begin to fall apart. Perhaps you missed a deadline or the project deliverables do not match up with the expectations. What you are left with is a failed project.

Why do so many promising projects end up as failures? In this article, you will learn about why some projects fail and what you can do to lower the risk of a project failure.

When is a Project Considered a Failure?

Every project starts with a lot of plans, ideas, excitement, and hopes. However, without proper planning, execution, and a strong communication line within the channels of project management, a project can woefully fail

Multinational companies such as Apple and Ford have big project failures such as Apple Lisa and The Ford Edsel. These project failures by the big companies serve as case studies for start-ups or developing companies who do not want to repeat such mistakes.

1. Failure to Deliver at the Project’s Estimated Delivery Time

A project is considered a failure when the project plan is not delivered within the speculated time and fails to achieve its purpose.

Every project has an estimated time frame where specific tasks have to be done. When the project execution and project schedule stop meeting the set deadlines, the project is already on a fast route to eventual failure. `

Changes in project objectives tend to mess up the time frame of the project. When many changes start to occur, the estimated time for the project tends not to accommodate those changes. 

Timing matters a lot in project management. It determines if the project will succeed or not. When the project extends beyond the anticipated delivery date, the project team starts to feel unmotivated and this will eventually affect the energy at which the tasks are being carried out.

2. Exceeding the Project’s Budget

One of the best practices for delivering a project successfully is to judiciously manage the resources allocated to the project. This is why it is very important to estimate the cost, set the budget, and know if you can get contingency funding in case you run into unexpected financial problems. 

Managing expectations, monitoring how money is spent, and evaluating the importance of each purchase to the project is crucial. When the project starts running out of funds or resources without an effective ‘Plan B’ on how to get more funds and no further cash inflow, then the project can be considered a failure.

Project Budget Statistics
Source: FinancesOnline

Top Reasons Why Projects Fail (and How to Prevent It)

1. Unclear Project Goals and Objectives

In every project, project managers have to define and map out the goals and objectives of the project. These project goals and objectives must be communicated in clear and simple terms for the project team. With this, they can know exactly what they are working towards and they will not step out from the range of the objectives.

Gathering the right information about the project also gives the project manager and the team the right equipment to meet up their target and project objectives. 

Knowing the purpose of the project boosts the project plans and brings about the achievement of project milestones. In situations where project goals and objectives are unclear, the project manager will find it difficult to clearly interpret and properly distribute tasks to team members. 

When the project, goals, objective, and vision are unclear, the project team may have a different interpretation of what the project is all about. This will lead to confusion and eventually result in situations where the project expectations are not met and the project becomes an abandoned work.

Employees who do not understand what is expected of them can not perform their best or give their best when they do not know what their best should be. 

An example of this is when an employee is taken to another department without a proper understanding of what the work or project schedule of the new department is. Such an employee will not function well and everything done there will look strange and unclear.

Project Charter Template in Excel
Source: Qimacros

How to Prevent It

  • Make the Project Goals and Objectives Clear. When teams can understand and have a clear view of the project, they make more active progress on the project. 
  • Use Project Charter. A project charter describes the project objectives, scope, and responsibilities of the depth of the blueprint of the key components of the project. This document communicates project goals and objectives to your project team.
  • Use Work Breakdown Structure (WBS). A work breakdown structure (WBS) is a common productivity technique that breaks a project into smaller manageable tasks. This makes the project more clear to the team.

2. Weak Resource Planning

When the project starts without proper planning it is already bound to fail, especially when there is weak resource planning. 

The foundation step needed to deliver a project successfully involves planning every sector of that project down to the very bits. One of the important plans is for the resources, this is not only in terms of financial resources but also important is the human resources. 

At the beginning of the project when there are abundant resources, there is a need to have a resource manager who will help the project manager in managing human resources, planning, and staff allocation. There is also a need for financial planners, who will help construct financial plans and give estimates of the total cost. 

A work breakdown structure (WBS) is needed to break down the project into smaller units such as work packages. This helps to organize the team’s work into manageable sections. Such a breakdown will give project managers well-detailed project estimates and project expectations.

Weak Resource Planning
Source: Wrike

How to Prevent It

  • Create a Resource Plan: When resources for a project are made available at the initiation of the project, the project will stand a higher chance of avoiding project failure. There should be a resource plan on how it will be spent and managed. Also, use resource management software to easily track and manage resources efficiently.

3. Low Project Visibility

This simply means the project's status and project milestones are not being achieved. Low project visibility can happen when deadlines are not being met and there is a weak link in the communication. It can also occur when the tasks are not being tracked and when employees do not have access to the right equipment and information to get the job done.

Planning the project is dependent on having proper visibility of the objectives. This allows for a well-detailed risk assessment, which can prevent future threats. 

How to Prevent It

  • Use Project Milestones. Whether a major or minor milestone, make sure to track the progress of the team. Milestones track the progress of the team and create visibility of the project.

4. Intransparent and Ineffective Communication

Communication is one of the strongholds of delivering a project. This is why collaboration software is a very important tool in project management. 

Intransparent and ineffective communication simply mean failure in the process of communication. This can happen when there is a poor workplace culture, where the employees are not given the freedom to voice their opinions. When the working conditions are not comfortable, this can affect the productivity of the project.

Poor management skills on the side of the project managers can contribute to ineffective communication with the project team.

How to Prevent It

  • Clear Channel of Communication. Communication is very key in any project. To prevent the failure of the project, project administrators must make sure there is a clear channel of communication between them and their teams. This might be through project management software like Monday.com, ClickUp, and Wrike. When there is a proper line of communication, project objectives are easily achieved.

5. Unclear Project Accountability

Accountability is very important in project management, it helps you to quickly figure out what the problem is and where the problem started from. 

To achieve accountability in a project, tasks have to be assigned directly to each team member. However, responsibility is not the same thing as accountability. 

A project manager is responsible for the project and is accountable to the key project stakeholders. When there is a setback on the project, the project manager is the one held accountable by the key project stakeholders. 

Lack of accountability can make a hardworking team member relent when praises are not given when milestones are achieved. This prevents the ability to track the progress and performance of the project.

How to Prevent It

  • Deploy Accountability Measures. Project managers should ensure that employees know what they are responsible for.

6. Scope Creep

Scope creep is the continuous changes and uncontrolled growth in project objectives and project plans after the project has started. When there is a continuous change in project scope, it becomes hard to track progress and the expectations of the project continue to change.

Continuous change in project scope can cause the goals and objectives of the project to be unclear and produce low project visibility. Over time if this continues to happen, it can result in overtime in projects where the project estimated time becomes unrealistic and budgets exceeded which leads to the failure of the project.

Continuous changes to tasks with unrealistic deadlines and timeframes will make team members produce low-quality and substandard projects.

Common Causes of Scope Creep
Source: JW Surety Bonds

How to Prevent It

  • Make Project Changes Minimal After Project Initiation. Project changes should be brought to a controllable rate or minimum level. When this is done, it makes sure the team is not overwhelmed with the continuous changes. This also ensures the project does not extend out of its budget.

7. Unrealistic Expectations and Low Team Motivation

Unrealistic expectations can be caused by poor planning, poor communication skills, and poor vision of the project. This can lead to stress and frustration on the part of the team members and result in low team motivation.

When your project team finds your expectations unrealistic and unattainable, they will not put in their best since they know they can not meet the “unrealistic goal” that has been set. Without a proper project. The success of every project depends on a motivated project team with a clear view of the goal working towards a “realistic expectation”.

How to Prevent It

  • Set Realistic Goals. Planning and setting realistic goals will produce a motivated team that meets its target. This produces a better line of communication. To set realistic goals, well-detailed research has to be conducted to know the heights the projects can reach and their limits.

Project Management Tools to Reduce Risk of Project Failure

1. Monday.com

Best Overall Project Management Software Tool 

Monday.com is the Best Overall Project Management Software Tool 

Monday.com is one of the best agile project management software founded in 2014 and trusted by over 100,000 customers worldwide including Coca-Cola, Hulu, and Adobe. 

Main Features 

  • Multiple Visualizations: Use multiple flexible project views and customizable boards such as timeline, calendar, map, Gantt chart, and Kanban board view, enhancing the visualization of your data and workflow.
  • Centralized Workspace: Users enjoy a centralized dashboard that allows them to easily plan, track, and access real-time data in a centralized workspace. You can easily share resources among your team members and make decisions based on these insights.
  • Multiple Templates: Monday.com offers you hundreds of templates that you can use to create suitable project management frameworks for your needs.
  • Integrations: Helping to streamline your workflow with over 40+ integrations to external platforms such as Salesforce, Shopify, Facebook, MailChimp, Google Calendar, and Microsoft Excel.

2. Clickup

Simple Project Management Software that Offers Simplified Project Management Workflows and Spaces

ClickUp is a Simple Project Management Software that Offers Simplified Project Management

ClickUp is one of the best simple project management software tools founded in 2017. This project management software is trusted by over 200,000 businesses and teams across the globe, including top companies such as IBM, Google, and Webflow.

Main Features

  • Multiple Views: ClickUp offers you 15 visualization options that you can use to visualize your projects within the software. They include lists, forms, maps, calendars, documents, timeline view, box view, line view, activity views, Gantt view, and Kanban boards. 
  • Time Tracker: Use ClickUp’s timestamp feature to effectively manage your time and track the time utilized by your project teams. 
  • Automatic Imports: Easily import your project history and workflows from other project management software such as Monday.com, Trello, and Asana, and other external applications such as Microsoft Excel. 
  • Templates: ClickUp offers you hundreds of easily customizable templates and workflows with which you can use to create your project management frameworks.
  • Integration: Access to over 1,000 external tools such as cloud storage and file-sharing platforms such as Box, DropBox, and OneDrive.

3. Wrike

Top-Rated Enterprise Project Management Software with Extended Customization Options

Wrike is the Top Rated Enterprise Project Management Software with Extended Customization Options

Wrike is one of the best enterprise project management software tools available in the market. This project management application is trusted by over 20,000 companies worldwide, including Dell, Lyft, and Siemens.

Main Features

  • Customizable Dashboards: Wrike provides you with customizable dashboards to create specific project management frameworks that are suitable for your specific needs. You can also create custom workflows and team-specific automation with Wrike’s customizable dashboard. Create project plans, schedule tasks, and visualize all your projects and assigned tasks from one centralized dashboard. 
  • Team Collaboration: Communicate real-time with your project team and key project stakeholders with Wrike’s live editing and built-in proofing tools.  
  • Project Visualization: Pick from a range of project visualization options and switch between them at your convenience. These project visualization options include drag and drop charts, workload views, Gantt charts, and Kanban boards
  • Integrations: Wrike integrates with your everyday business and productivity tools such as CRM tools, communication systems, and sales and marketing tools. There are over 400+ pre-built native integrations available on the platform.

4. Teamwork

Ideal Project Management Software for Small Businesses with Highly Actionable Templates

Teamwork is an Ideal Project Management Software for Small Businesses with Highly Actionable Templates

Teamwork is one of the best project management platforms for small businesses that are patronized by top brands such as HP, Spotify, Disney. PayPal, and Netflix. 

Main Features

  • Easy Imports: Import your previous workflows and data easily and conveniently from other project management software such as ClickUp, Wrike, Trello, and Basecamp.  
  • Customizable Project Dashboard: Teamwork provides you with a customizable project dashboard that you can use to monitor the important details of your project. Get a quick overview of your project, progress made, and due completion dates from your project dashboard. 
  • Pre-Built Templates: Enjoy multiple templates for your project management needs such as client onboarding, accounting, project planning, reporting, and other dependencies.
  • Time and Resource Management: Through Teamwork’s time and resource management options, you can easily track your work hours and that of your team members. You can also efficiently monitor how your project team is using up the resources allocated and share project resources among team members.

5. Scoro

Appealing Online Project Management for Small to Medium Enterprises

Scoro is an Appealing Online Project Management for Small to Medium Enterprises

Scoro is one of the best online project management software created in 2013 that helps businesses to streamline their projects and automate their billings. 

Main Features

  • Real-Time KPI Dashboard: Soro equips with detailed real-time reports about your project’s cost, budget, sales, and progress on one central dashboard. You get real-time reports and reviews on your project’s KPIs for more efficient decision-making.
  • Time Management Tools: Get rid of time wastage and low productivity with Scoro’s time management tools which include a built-in time tracker, calendar, and timesheets. Track your project team’s work hours.  
  • Resource Management Tools: Scoro provides you with resource management tools that you can use to allocate resources efficiently to your team members based on availability.
  • Integrations: This online project management platform integrates over 1,000 external tools such as popular accounting software such as QuickBooks and Xero, customer support tools such as Zendesk and Freshdesk, marketing and sales tools such as MailChimp, Salesforce, HubSpot, and Pipedrive.

6. Celoxis

Web-based Project Management Software with Quality Expense Tracking Options

Celoxis is an Web based Project Management Software with Quality Expense Tracking Options

Celoxis is one of the best web-based project management software trusted by top companies such as LG, Tesla, Whirlpool, HBO, Rolex, KPMG, Adobe, Lufthansa, and Singapore Post.

Main Features

  • Project Tracking: Enjoy real-time visibility across all aspects of your projects from one centralized dashboard. Track the performance and work hours of your time according to the key performance indicators (KPIs) you set. You can also create custom fields, workflows, and project management reports.
  • Team and Client Collaboration: Celoxis offers you a client portal through which you can share vital project files securely with your clients. The portal also facilitates discussion and comments between your clients and the project team.
  • Advanced Auto Scheduling Modes: Manage your project schedules efficiently with Celoxis’ advanced auto-scheduling modes. You can use these modes to schedule time for different time zones and vacations and to even schedule resources. 
  • Financial Management Tools: Track your project finances with Celoxis’ real-time information on your project budget, costs, receivables, and profits.

Checklist to Lower Risk of Project Failure

1. Effective Planning

Planning should be the foundation of any project and done at the project initiation phase of the project management life cycle. Project managers, project teams, and key project stakeholders should plan every outcome possible, bring in experts to examine plans, and have a well-detailed project scope and an efficient work breakdown structure. 

What is a work breakdown structure (WBS)? This is a deliverable-oriented breakdown of a project into small units. A work breakdown structure (WBS) helps project managers to organize and manage every sector of the project. 

Scope creep can be easily blended into the project with a work breakdown structure because it presents a clear view of the goals and objectives of the project to the project team.

Drawing up a project charter during this stage is very important because it points out key project deliverables in the project. The project charter is the blueprint of the whole project. It presents a clear picture of the project objectives and project plans to the whole team so everyone knows what to do to get and achieve the project goals.

2. Track Progress or Milestones

Project milestones are key to the success of any project. They show or act as proof or evidence of the hard work the team put into the project. 

Tracking the progress of the project through project management software can also help the management to know where the shortcomings of the projects are. This can help with accountability in the team and a way to also recognize effective workers in the team. 

By tracking the milestones of the project, project teams can be easily managed. Project managers can track project milestones to easily spot when the team is on the wrong side of the project or going out of the range of the project.

3. Set Realistic Expectations

Setting realistic project expectations is a no-brainer. This can be calculated by conducting extensive surveys to know the strengths and weaknesses of the project.

Conducting surveys can help you determine how far the project can go and limit stakeholders’ expectations so realistic expectations can be given to team members. 

By setting realistic expectations, you will give your project team fewer “crazy” deadlines and sane workloads which will boost their morale and bring the best to the project.

4. Adequate Information and Equipment

With the right information which is gathered at every stage of the process available to your project team, they will know what is expected of them and what the project deliverable should look like. 

Information is power in any industry, it boosts the progress of the project and makes the project team work more efficiently. 

Coupled with adequate information, adding the right equipment such as project management software and work management tools is essential.

5. Proper Project Management

Proper management involves the decision-making process of the project. It includes identifying problems and proposing solutions to them. 

A project must have an efficient project manager who manages all sectors of the project. This individual must have a clear understanding of the project. If the project manager who is supposed to distribute roles and assign tasks has no idea of the project, the project has already failed. 

Poor project management affects key processes such as communication. When the communication is affected, the link between the team and the project will start to reduce. This will lead to low performance, reduced productivity, and the eventual failure of the project.

Anastasia Belyh

Editor at FounderJar

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.