Why do projects fail? 7 reasons & solutions

As a project manager, you may find yourself in a situation where your project is not delivering the desired results. According to a Study by the Project Management Institute from 2021, as many as 12 % of respondents considered the projects in their companies from the past year to have failed. But: What are the reasons that lead to project failure? A failed organisation is not always the reason. Nevertheless, some reasons for project failure can be found.

Be aware of the biggest challenges before you start a project. In this blog article, you will learn the most common reasons why projects fail and how you can counteract failure with proven solutions.

What does failure mean?

The meaning of the term "failure", as it defined in the dictionary The term "failure" covers two aspects: the failure to achieve a desired goal and the general lack of success. In connection with synonyms such as "failure, miscarriage and failure", we will take a closer look at the various facets of project failure below.

When is a project a failure?

The signs that a project is failing can appear gradually or suddenly. But how do you recognise whether a project is in trouble and whether it is still possible to save it? When the first inconsistencies become apparent and obstacles pile up, it is time to evaluate the extent of the (potential) damage. An external analysis can help you with this. You should consider the following questions:

1. is the original project objective still being pursued?
2. is the goal still achievable?
3. how much effort is required to eliminate the weak points?

You should then decide whether the project can still be saved and whether the available capacities and resources are sufficient. Always remember: failure is relative and (usually) subjective. Projects that are deemed to have failed can still achieve considerable results, even if deadlines are missed or targets are not met. Although the feeling of failure is unpleasant, it is often part of the process when ambitious goals are set and ultimately not achieved.

A 100 per cent success rate could also indicate that your planning was not ambitious enough. Nevertheless, you should ensure that projects fail for the "right" reasons, for example by setting ambitious goals to provide new impetus. And not because of avoidable mistakes.

7 reasons why projects fail & suitable solutions

The usual obstacles that can hinder the smooth running of a project can usually be overcome. By carefully planning your projects in advance, you not only have the opportunity to prevent potential failures, but you can also actively improve your strategic approach. This preventative approach not only reduces the risk of failure, but also lays the foundation for a successful project. In order to take preventative measures, you should be aware of the reasons why projects fail:

Reason 1: Unclear project goals

Project objectives represent your desired results at the end of your project. You should define clear, time-bound goals that are quantifiable at the end of the project. Without clear goals, it is difficult to keep your team on track or determine the success of your project.

Example: Suppose your team is working on the development of a new function for your software product. Without a concrete goal - for example, "Increase user satisfaction by 20 % by the next release" - it is challenging to determine which functionalities can contribute to achieving the goal. Without clear goals as a guideline, it will also be difficult for you to evaluate the effectiveness of the work carried out after the project has been completed.

Solution: Integrate clear goals into the project plan

Well thought-out project objectives not only serve to orientate your team, but also provide a clear benchmark for evaluating the success of your project. You should therefore focus on clearly defined objectives as early as the project planning stage, which can be viewed and understood by everyone as guidelines for the entire project process. Don't forget to set quantifiable targets in addition to qualitative criteria. It is even more effective to actively involve your team in the goal-setting process in order to ensure that all employees are aligned. It therefore makes sense to consider goal setting as an integral part of your project plan, which also includes key stakeholders, timelines and other relevant components.

Reason 2: Expansion of the project scope

If the required project results change in the course of the project, we speak of scope creep. This process is often difficult to identify as it develops gradually. Scope creep occurs when your project results exceed the original project scope and additional work is created that was not planned.

Example: You work in management consulting and have a clear project agreement for the implementation of new processes in a specific business area of your customer. During the project, however, your client expresses the wish to expand the focus to an additional area that was not included in the contract. This unforeseen expansion of the project requires additional resources and time adjustments to meet the new requirements.

Solution: Clearly define & communicate project scope

Clearly defining the scope of the project makes it easier to deliver results on time and on budget. By planning resources in advance, you can ensure that your team is not overloaded by last-minute requests. A documented project scope also serves as an effective tool for rejecting additional stakeholder requests. In the example, this would mean that you only implement the originally defined processes for the specified business area in order to complete the project on time and on budget. In addition, you could also develop a "Definition of Done" with your customer and include additional services as "nice to have". If there is still capacity left for this, it can be worked on before the end of the project.

You can create a detailed description of the project scope, either as an integral part of the project plan or as a stand-alone document. Once you have created the description, it is important to share it with all relevant project stakeholders. By knowing exactly what is and is not included in the project, stakeholders tend to hold back on special requests. If you do receive an additional request, you can use a change process to evaluate whether it is important enough to be included in the project scope.

Reason 3: Unrealistic expectations

Inspiring goals can help to unleash new energy in your team. However, it is essential that these goals are also realistic. If your project goals are too ambitious, there is a risk of stressed team members and missed deadlines.

Example: Your marketing agency sets itself the ambitious goal of winning 100 new campaign projects this month. However, two key members of staff are on holiday, which means that the remaining part of your team would have to work overtime to achieve this target. As a result, there may be insufficient resources to achieve the target. The success of the campaign acquisition could be jeopardised.

Solution: Implement SMART project goals

With careful forward planning, you can still set inspiring goals without the need for extra hours of work. To set ambitious but achievable goals, it is crucial to ensure that they are SMART: specific, measurable, achievable, realistic and time-bound. The Application of SMART goals clarifies how success is defined. At the same time, they provide a clear project strategy plan and a timeline for your project. By ensuring that your goals are achievable and within the scope of the project, you can minimise project risk and effectively lead your team to success.

Reason 4: Limited resources

Resources such as budget, personnel, time, space and work equipment are crucial to the success of your project. A lack of resources can lead to delays or even to the project coming to a standstill.

Example: Suppose you run an engineering office and are tasked with planning and realising a construction project. As the completion date approaches, you realise that the budget for specialised technical drawing software has been exhausted. With limited financial resources and without access to the necessary tools, it becomes difficult to complete the project as planned. In this case, you lack both the financial resources and the necessary technical tools to complete the project successfully.

Solution: Create a resource management plan

Unforeseen events such as possible budget restrictions cannot always be avoided. However, through targeted planning, you can ensure that your engineering firm has the resources it needs to successfully complete a construction project. A resource management plan specifies the amount and type of resources needed for the project - be it specialised software for technical drawings, financial resources or working time. By applying proven methods for resource allocation, you can then precisely determine when and to what extent certain resources should be allocated to the project. This allows you to react flexibly to any challenges that may arise and to realise the construction project efficiently and successfully.

Reason 5: Poor communication

In today's working world, communication is more complex than ever. With so many ways to communicate, it's difficult to know when and where best to share important project updates. This can lead to members of your project team disagreeing about which communication channels should be used, when and by whom. This ultimately affects the efficiency of your work and could have a negative impact on the achievement of the project's objectives.

Example: Let's assume you manage a location-independent project team that is spread across Europe. You use various communication tools such as email, messaging, video conferencing and shared documents in the cloud. However, your team has not been given clear guidelines on when to communicate and via which channel. As a result, important updates are often shared via channels that only a few people are aware of. As a result, crucial details are lost, which can lead to redundancies in work.

Solution: Create a communication plan

A well thought-out communication plan defines exactly how relevant ongoing project information is communicated. It provides clarity on which tools should be used for which purposes, defines the frequency and who is responsible for sharing updates and specifies when key stakeholders need to be involved. By implementing a robust communication plan, you can minimise the time spent searching for information and instead focus on the effective delivery of your project objectives.

Reason 6: Delays in the schedule

Missing deadlines here and late meetings there may seem unimportant at first, but can ultimately lead to rushed work, a stressed team and significant project delays or even project failure.

Example: You are a lawyer and are working on an important court case. The deadline for the submission of evidence has been postponed several times and now there are only two weeks left until the trial. Failure to meet the deadlines now requires hasty preparation of the case, puts a strain on your colleagues and can ultimately lead to significant delays in the overall legal process.

Solution: Create schedule

We have already mentioned the creation of a project plan above. This useful document usually also includes a detailed schedule. This lists the individual steps that need to be carried out and specifies who is responsible for these tasks and when these steps need to be completed.

Thanks to an effective schedule, your team has Clear insights into the interrelationships of the individual work stages and you can easily recognise which important milestones depend on others. Based on the due dates, you can assess whether there is enough time to fulfil each individual work step. You can also involve your team in the planning process in order to optimally coordinate the schedules and responsibilities of all project participants.

Reason 7: Lack of transparency

You have drawn up a carefully crafted project plan including a timetable, communication plan, resource management plan and SMART objectives - and what happens next?

Example: You are part of a software development team working on a complex project. You have created all the necessary plans and yet your team members are struggling to find the relevant documents when they are needed. This is not very transparent and leads to inefficient communication and potentially delays as updates cannot be communicated smoothly. Even in meetings, important information may get lost in extensive discussions. In the worst case scenario, your project will fail due to a lack of transparency.

Solution: Use a project management tool

Project management tools enable you to organise workflows and set up processes so that you can work together effectively as a team in the long term. A suitable software such as ZEP can serve as a source of information for project information, documentation and status updates. ZEP gives you access to all the information you need and ensures that your team is always up to date. This eliminates the need to track project time in outdated Excel spreadsheets and allows your project team to have all relevant project information at their fingertips, anytime, anywhere.

Preventing project failure: A conclusion

There are many reasons why projects can fail, and often these reasons overlap at one point or another. In order to prevent this and make a project successful, there are effective strategies and Reliable tools such as ZEP. However, it is also crucial that you as a project manager can motivate your team, communicate transparently and always keep the project objective in view.

Especially in the Context of risk management early planning is essential to prevent projects from failing. By empowering your team to plan strategically and consider all aspects of the project, you increase the chances of success and achieve your most important goals. With this in mind, here's to well thought-out planning and many successful projects in the future!