Why important projects are designed to fail: How to make them succeed
Community Guest Blog post by By Jack Bergstrand
Implementing reinvention projects is critical for companies to win in the global marketplace. Unfortunately, project failures have consistently been a major barrier to reinvention. According to Standish Research, 70 percent of major projects fail to meet their objectives, 50 percent exceed their original cost estimates by 200 percent, and 20 percent are ultimately cancelled. Why is this?
Why important projects are designed to fail
After researching this for 10 years with a very experienced team and personally managing large projects for a decade prior to that, the source of the project failure problem became increasingly clear. The fact is that important projects often struggle in large organizations because they are systematically designed to fail. We manage projects the way we’ve been trained, but we were trained using methods—originally designed by Frederick Taylor in the early 1900’s—that were developed for the industrial age. They don’t take into account the human complexities inherent in large enterprise initiatives.
The problem is that reinvention initiatives with significant human considerations (i.e. virtually every large enterprise project) can’t be managed the same way as industrial projects. Trying to apply traditional techniques to dynamic organizations typically results in over-engineered decision-making processes, mismanaged consulting resources, time delays, and cost overruns. The result is appallingly high project failure rates and disturbingly low returns on important technology and consulting investments.
Designing projects to succeed
The solution to the 70 percent failure rate problem is for large organizations to reinvent their project management practices in a way that is grounded more in the social sciences and less in the physical sciences. Doing this will help project stakeholders better manage their ever-changing human dynamics, and ultimately to plan and implement key initiatives better, faster, and less expensively.
Applying the solution to reinvent project management
Move from a manufacturing to social science orientation
Doing this requires a holistic framework and process to wisely incorporate the proper use of human subjectivity as well as systematic objectivity. As part of this, it’s important to be subjectively clear about Where you intend to go and Why (Envision). Next, to be objectively precise with respect to What needs to happen When (Design). Third, to be objectively clear about How to best do those things (Build), and, finally, being subjectively sensitive with respect to Who needs to be motivated to do which tasks.
Move from fragmented specialization to a holistic perspective
Doing this requires a shared vision and game plan for success. In practice, this requires the shared approach to the Envision, Design, Build, and Operate steps noted previously, and also a shared and holistic understanding of the organization itself—including, in many cases, an appreciation for the critical interrelationships between functions, such as marketing, finance, manufacturing, and sales.
Move from static planning to action-oriented planning
Even though planning is critical, there is probably no area where there is more wasted effort in major enterprise projects than in the planning area. With reinvention projects, planning needs to be much more of a social process.
In practice, the right answer is to engage in more frequent, much shorter, and more integrated planning/execution cycles―with a prototyping mentality. This requires formal facilitation, mediation, and a shared and socially oriented framework and process—including specific attention paid to important team insights, a rapid and integrated project planning process, accelerated execution practices, and ongoing adaptation through independently facilitated feedback mechanisms.
Move from head-to-head conflict to facilitated conflict mediation
Whether project stakeholders are comfortable admitting it or not, every team, function, division, and firm involved has self interests that are not or will not always be perfectly and consistently aligned with the priorities of reinvention projects overall. It is inevitable that there will be disconnects within and across the stakeholders. The truth is that independently and systematically resolving disconnects (early and often) needs to be proactively facilitated at the enterprise level to be productively and sustainably managed.
Validating a social science-based approach to reinvention
When applied in practice, the social science-oriented approach has produced remarkable results. For example, a large global professional services firm removed six months from its enterprise software implementation with an 80X return on its reinvention investment. An international manufacturing company reinvented its enterprise-wide transformation initiative to achieve one-time benefits of $100 million, with an 18X return on investment. A Fortune 150 company reinvented its business transformation initiative, generating savings of $180 million, with a 200X return.
The fact is that using an industrial orientation to reinvention projects fails to deliver 70 percent of the time. Through the proper use of a more holistic approach, a better planning process, and the use of independent facilitation and mediation to accelerate execution, these projects can be designed to succeed. In our globally competitive world, speed is a prerequisite for quality and competitive advantage. As a result, this accelerated and socially-oriented approach is critically important. It has never been clearer that large companies no longer threaten smaller firms nearly as much as faster firms threaten slower ones.
Inspired by legendary management thinker Peter F. Drucker and more than 200 other experts, Jack Bergstrand has dedicated his life’s work to enterprise reinvention. After a 20 year career in large organizations, including the roles of CIO of The Coca-Cola Company, as well as CFO and VP of Manufacturing and Logistics at Coca-Cola Beverages, he founded Brand Velocity, wrote the book Reinvent Your Enterprise, developed the Strategic Profiling team acceleration tool, and created the Action Planning change leadership process. His company, Brand Velocity, was called “the smartest company that you’ve never heard of” in BusinessWeek, and his book is the only publication of its kind endorsed by The Drucker Institute. Jack can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
