Monday, September 10, 2007

Why do so many projects fail?

If you've worked on more than a handful of projects in your business career, you are familiar with failure. Lots of projects simply don't work right: some are abandoned before they're complete, others don't meet expectations, others finish but are so agonizing that they burn out teams and managers both.

A new book, "Reinventing Project Management," by Aaron J. Shenhar and Dov Dvir, dissects the topic in great detail. It's a refreshing look at project management, not least because they focus less on the discipline of work breakdown structures and task dependencies and more on what different projects try to achieve and how methodologies and management approach must adapt to the needs of the project.

In summary, there are two reasons why projects fail:

1) the wrong objectives are assessed
2) the management style of the project doesn't match the needs

To point (1) the authors point out the tyranny of the "iron triangle"--(meeting requirements, on time, on budget). The dimensions of the iron triangle are immediately assessable--are we late? have we checked off all the requirements?--but they don't reflect key business value that is only measurable over time. Was our new project a success in the marketplace? Have we developed a technology platform that can support our business for the next decade? It's very possible that a late, over-budget project can be a success in the long term. So the iron triangle needs to be put in perspective.

To point (2) the authors measure projects on four dimensions: novelty, technology, complexity and pace. How any project fits on these four dimensions affects how it should be managed. The wrong management style frequently leads to failure. They cite several examples, including:

  1. NASA's moon-landing project, a success despite radical technological breakthroughs required (super high on the technology scale) and constrained timeframe (fast on the pace scale--"before the decade is out"). The managers of that project proceeded deliberately, built lots of prototypes, and carefully worked out the kinks they found. (As a counter-example, the authors point to the shuttle program, which despite similar technical complexity was rushed through on a compressed budget.)
  2. The Denver airport project, which was managed like a straightforward construction project, despite specifying a state-of-the-art baggage handling system which had not been deployed on a similar scale before (super high on the technology scale).
  3. The Segway. A brilliant and novel technological device (rated as breakthrough on the novelty scale), its failing was the closed nature of its development. Because no prototypes were tested in the marketplace, and little if any market research was done, the Segway was launched into a marketplace that simply didn't need it, or didn't need it at the price.
To succeed, say the authors, you must assess a project based on the four dimensions, and create budgets, schedules, objectives, success criteria, etc., specifically for that project. Doing that gives a worthy project a fighting chance to succeed.