The Ten Strategic Risks that Cause Projects to Fail

Project failure seems to be almost endemic at the moment. There are frequent press reports of massively over-spent Government projects, and major commercial project delayed or cancelled. Anyone who works in a big organisation will have seen it up close, so let’s look at ten of the commonest reasons why projects fail. Each one is strategic, predictable and, most important can be avoided.

Risk 1.

The project goal and objectives are either unclear, or are disconnected from the organisation’s other priorities, leading to a weak case for change. This is really two reasons for the price of one.
Strategy: Invest time up front getting a strong definition signed off by strategic level managers.

Risk 2.

People have unrealistic expectations, leading to a determination of failure despite the project meeting its goal and objectives. Stakeholders will always have the last word on success or failure.
Strategy: Prioritise stakeholder management at all stages of your project.

Risk 3.

Senior people in leadership roles fail to accept responsibility for the project, and do not give it the support, commitment and leadership it needs. This often leads to an over-reliance on consultants or contractors.
Strategy: Unless you have clear and committed sponsorship, fold the project now.

Risk 4.

People resist the changes that the project brings or resist participating in the process, often because their role in the project’s success is under-valued by the team. Rule 1: people resist change. So what will you do about it.
Strategy: Plan time into your programme to engage positively with the inevitable resistance.

Risk 5.

Project management, change management, stakeholder management and risk management skills are lacking. Often, functional managers are co-opted into project management roles with little or no preparation.
Strategy: If you can’t secure experienced project managers, provide high levels of training and support.

Risk 6.

The project is poorly planned, without a sound basis for estimates of schedule and resources, leading to unrealistic deadlines or budget. And worse still, project managers believe their plans too early, with little or no supporting evidence.
Strategy: Stress-test your plans and never consider them complete without full risk mitigation and contingency plans included.

Risk 7.

Key elements of the project are not controlled effectively, such as changes to scope or functionality, delivery or quality of products, or deviations from plan.
Strategy: A robust change control process is necessary in all but the simplest projects.

Risk 8.

There is too much focus on cost – or price of contracts – and not enough on the balance between cost and risk/value. Value for money means understanding the risks and benefits, not just the costs.
Strategy: Always ask why low prices are as low as they are. If it seems too good to be true, then it probably is.

Risk 9.

A project solution is defined before adequate research has validated that is technically possible, organisationally desirable, and free of unintended consequences. We are too often seduced by the lure of the novel and innovative. New plus original equals big risk.
Strategy: Prototypes, pilots and extensive testing are not gimmicks but sound risk management tools.

Risk 10.

Project overload – the organisation is simply trying to do too much with the resources and attention that it has available. Many organisations don’t fail because they don’t manage projects well, but because they try to manage too many.
Strategy: Ruthlessly prioritise your initiatives and cull those which offer poorest value.


Risk Happens! by Mike ClaytonEach of these threats is fully addressed
in Dr Mike Clayton’s new book,
Risk Happens!

See www.riskhappens.co.uk for details.

Buy it in paperback from Amazon here,
or in Kindle format, here.

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2 thoughts on “The Ten Strategic Risks that Cause Projects to Fail

  1. Vesa H Autio

    I fully agree with these risks. The first thing that comes to my mind is having a true project owner from the top management, as a project manager cannot take all the actions recommended here. However, top managers seldom have time for this and so project owner becomes a ceremonial role. About the point 6: An usual case is that a project plan is easier to make when the commitment and motivation of the stakeholders is missing. A project manager should be very worried if her or his first project plan draft is found to be OK. It often means that no one is going to follow it.

    Reply
  2. Pingback: The Ten Strategic Risks that Cause Projects to Fail | CAI's Accelerating IT Success

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