Top 10 Reasons Why Projects Fail

Feature Article Courtesy of Timothy J. Corbett

1. Understanding Project Expectations
Projects fail when project objectives and expectations are not fully defined and understood by all parties.  Understanding the owner’s project objectives and expectations is essential for a successful project.  If project expectations are not clearly understood, team members start making assumptions on what they think should be done that creates conflicts leading to project failure.

AE_Quarterly_Newsletter_WhyProjectsFail_blog2. Official Approval
Starting projects before they are officially approved routinely leads to trouble - getting a jump-start and begin work before all the paperwork is completed and approved.  This includes the contract with the approved project scope, budget and schedule.  Team members start work and allocate resources on items that have not been officially approved.  What happens is items that already have worked completed are routinely out of scope, and outside the budget that causes problems down the road including lost revenue.

3. Inexperienced Staff
Instead of hiring additional staff, companies are trying to do more with current staff levels.  The problem is eighty seven percent (87%) of design firms are having a difficult time finding qualified staff.  Current staff is becoming overloaded with activities being added to current project duties.  Duties are also being performed by inexperienced staff members and untrained in project duties and associated risks.  Inappropriately assignment of staff eventually causes trouble and claims on projects.

4. Project Conflict
When there is a conflict on a project, emotions can easily run high.  These situations can be detrimental and can easily derail a project.  No project is perfect and there will always be some level of disagreement on a project.  However, how project team members handle these situations is critical in moving forward.  It is essential that there is an "upfront" agreement by all parties of how a conflict shall be handled during the course of a project.

5. No Team Approach
An “us” versus “them” mentality on a project routinely leads to trouble and conflict.  We have all seen this on our projects to some degree.  These situations can lead to projects failing because people and project team members take a defensive position, staking and protecting their territory instead of trying to work together for a successful project result.

6. Changing Priorities
In this changing economic climate, companies and projects change priorities to match the market conditions.  Currently we have a hot project market, and many Owners want to take advantage and complete projects as soon as possible.  If changed project priorities are not communicated to the project team and organization effectively, the original project plan will be applied that creates conflicts and project failure.  Once priorities are changed, it is essential that the project plan is updated, adequate resources are allocated and the project plan is clearly communicated to project team members.

7. Changing Scope
When conditions change that create adjustments in the project scope, or a project Owner requests services outside the scope of the project, the project scope can easily get out of control, leading to "scope creep" and lost revenue.  It is essential that a clearly defined scope is outlined and agreed upon upfront for the project.  Any changes during the project such as site conditions, or service requests from the Owner should be discussed and agreed by all parties.  Scope changes can easily impact the project schedule and compensation.

8. Inadequate Quality Control
Providing quality services is critical to the success of any project.  Quality controls should be in place and used in the development and review of design documents and in the construction of the project by the contractors.  Without quality controls in place, there is no systematic process for controlling the desired expectations and outcome for the project.  An important note - technical claims are on the rise for design firms predominately driven by lack of quality processes and inadequate, inexperienced staff.   

9. Inexperienced Contractors
Project cost continues to be a primary concern for project owners.  With cost as a primary deciding factor, many owners award projects to the lowest bidder instead of applying a qualify-based selection process of contractors.  In an industry survey, project owners identified contractors as the major cause of project delays.  The main causes were: unqualified work force, inadequate contractor’s experience, ineffective planning and scheduling of the project by contractor, and rework due to construction errors.  Similar to the staffing challenge for design firms, contractors have a shortage of skilled labor today.

10. No Project Risk Management Plan
Every project has some level of risk.  Having an upfront and agreed upon plan within your firm, the project team, and with the project owner on how to best manage the project risk, is the prescribed remedy.  Without a plan, when things go wrong, the “us” verses “them” mentality can easily take over creating an adversarial environment.  The risk management plan should be expressed in a sequential and a project goal-oriented manner for all parties.

NOTICE: The information in this newsletter should not be construed as legal advice, nor intended to replace legal advice specific for your firm or circumstances.  Comments, advice and suggestions are for informational purposes only.

About the Author

Timothy J. Corbett, BSRM, MSM, CERG, LEED GA
Timothy Corbett, Founder and President of SmartRisk, has extensive experience developing and implementing risk and performance management programs for architects, engineers, environmental consultants, building and construction professionals.  Tim held Vice President positions with industry leading insurance carriers with responsibilities for Underwriting, Risk Management, Claims Analysis and Industry Relations.  Mr. Corbett is a member of American Council of Engineering Companies (ACEC) American Institute of Architects (AIA), the United States Green Building Counsel (USGBC) and the Enterprise Risk Management Academy (ERMA) and sits on their educational advisory board.

Legal Disclaimer: Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.