Why do most projects fail?

It is no secret that a lot of projects fail! The high failure rate of projects has a devastating effect on the bottom line of businesses and the national economy as a whole.

Every year Billions of Dollars are wasted on failed projects. What is even worse, the bigger the project, the higher the probability of failure, which means more money and resources are wasted!

Harvard business review has written an interesting article titled why even good projects fail anyway. The statistical chance of a project finishing on time and the budget is less than 40%.

Forbes magazine also opined about the high rate of project failures recently.   

So, why do so many projects fail? is it due to the lack of planning? The inexperience of the project managers? The overconfidence of the developers and project members?

When a project fails, it is not just the cost of labor and resources spent on the project which is wasted. The bigger cost is the lost opportunity cost.

What is the opportunity cost of project management, you ask? Just imagine if all the resources and money you spent on a failed project could have been used to work on a different project which would have succeeded.

The opportunity cost is the tangible benefit of all the things which you could have accomplished if you never embarked on a failed project.

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Fifteen Reasons projects fail

In the paragraphs below, we have identified the fifteen major reasons why projects fail and the reasons they cause project failures. As you can see below, there are a lot of reasons that projects fail most of these causes are independent of each other.

1-Lack of proper planning

If the project planning is insufficient, the project does not have a chance of success from the get-go. This statement is by no means against using Agile project management.

The agile method is not the advocate for lack of planning. On the contrary, Agile requires careful planning in dividing the project into sprints. Each sprint also needs to be carefully planned and executed.

You should never plan a new project alone. The more people you involve the better chances that you plan the project just right. Who should be involved in the initial planning? All stakeholders who have an active role in completing the project should be involved in the planning process.

You need to learn to plan thoroughly to give your project a fighting chance of success.Click To Tweet  

2-Lack of experience by the project manager

Small projects may not need a project manager. But, for a good size project, an experienced project manager is a must. In the Agile method, the project manager is replaced by an experienced Scrum master is needed.

The bigger the size of the project or its complexity, the higher the need for an experienced project manager who knows the problem domain well and has an extensive management background in successfully finishing projects.  

3-Improper or insufficient scope definition

This problem happens all the time in large projects. The scope is not properly and completely defined. This goes hand in hand with the lack of proper planning mentioned above.

If the scope is defined properly, it will be much easier to accurately plan and estimate the project duration.

Think of project scope as the document defining the project’s goals, deliverables, features, and cost. 

It should be noted that the cost should be defined for the project’s cost and the product cost.  

4-Lack of leadership

Most endeavors in life need effective leadership to succeed. The number one skill required by a project manager is leadership ability.

Most executives underestimate the value of leadership in project management. The job of the project manager or Scrum leader is not just to plan but lead the team effectively to achieve the goals of the project. Projects which have strong leadership, have a much higher chance of success than projects which have weak or nonexistent leadership.

Without proper leadership, the project does not have a chance. Every project needs a fearless leader.Click To Tweet 

5-Lack of ownership

Projects which lack ownership by one of the executives in the company fail at much higher rates than projects which do.

Every project must have an owner with P&L responsibility.

If you can’t find someone in your C-Suite to own the project, then maybe the project is not worth doing at all!

Granted, there are times that a project’s concept is so advanced and ahead of its time, that nobody in the company understands or believes in its huge potential.

To remedy this problem, it is important to rush to make a minimum viable product or MVP to show the executive team the value of the project.

With that on hand, you should be able to persuade somebody in the management who is willing to own and sponsor the project.   

6-Inexperienced development team

Ok, not everyone can afford to have the A-Team, and not every team can create a new iPhone or new high-security software product.

It is critical for the project manager or the product owner to know what the team is capable of doing and their limitations.

Advance projects should never be tried with inexperienced teams. Start slow, do small projects to gain experience before you jump on complex projects.

7-Using the wrong methodology

Just because you have a favorite project management methodology like waterfall or Agile they may not be the right tools for your latest project.

The project and the methodology you use to plan and monitor it should match. Otherwise, the chance of project failure increases dramatically.

Some projects fit the Agile model better. Some projects better fit the waterfall model and some projects may require other methods.


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8-Failure to separate research from development

Your development plan should not include research. It is a huge mistake to mix research projects with development projects.

The reason for this is quite simple, it is extremely difficult to plan and time estimate a research effort correctly.

If the project requires research on a new subject, separate the research portion from the development effort.

Create two projects, the first should be the research effort with flexible deadlines. The second project should be the development effort which relies on the success of the research project but has hard deadlines.  

9-Team’s Overconfidence

It is great for individuals or teams to be confident and feel they can do hard things. But, being overconfident could be a major problem for any project.

The team needs to be realistic about their capabilities and the estimates they give on the duration of the project.

The overconfidence could be checked with Agile management. It reduces the risk of project failure using an incremental approach to managing resources.

As a rule of thumb, most developers regularly underestimate a task by as much as 50%. So it is a good idea to add a factor on time estimates you get from developers.  

10-Insufficient resource allocation

A lean team is ideal for working on a project since too many people could do more harm than good.

Having said that, understaffing a project is as bad as overstaffing it. The project manager needs to find the absolute number of resources needed for the project.

This is not just a number game, but a quality game too. You can’t replace an expert with a mediocre performer.

You can’t also replace an expert in one field with an expert in another field.

Resource planning is a critical part of any project planning.   

11-Lack of collaboration

Without collaboration, the project’s chance of success diminishes drastically.

Collaboration is well known to be the secret sauce of productivity. To finish the project on time, every member of the team needs to be part of a well-oiled collaboration machine.

The knowledge and know-how should freely flow between team members regardless of their position or rank in the project.

When an important issue arises all members of the team are notified and the collective wisdom of the team tackles the issue.  

12-Big projects fail more

Big projects have a much higher chance of failure than small projects.

So it is important to apply the work breakdown structure to planning projects too. It is better to break big and complicated projects into several smaller and better-understood projects.

Some people think WBS is for task management only. They are wrong. You should be able to easily apply WBS to projects too. 

13-Market mismatch

Sometimes a project finishes on time and budget with great success. Everything works perfectly and according to the plan and specifications.

But, the project is still considered a big failure. Why? because nobody needs the product or service the project has produced.

If you can’t sell what you have worked on for months or years, regardless of its technical merits, it is a failure.

That is why the project scope and definition need to be thoroughly market-tested before the project starts.  

14-Lack of accountability

In successful projects, every member is held accountable. This is an important concept. In the same way, people should be recognized and rewarded for their success, they should be held accountable for failures.

I want to make a point clear, the team should not fear failure. What we mean by holding people accountable is to make sure the weak and underperforming team members are replaced with better players.

If a developer is working on a new concept, but the concept does not pan out, it is not called failure. It is in my view gaining valuable experience and what works and what does not.  

15-Lack of customer engagement

The customer should be involved from the start of the project in defining and planning the project. 

The customer should continuously test the product or service as the development team releases early versions and makes progress toward the end product. 

When this happens, the project has a much higher success rate compared to projects where the customer is absent and only contacted when the product is ready for delivery. 

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How to improve the project’s success rate?

We have identified the main reasons why do projects fail in the above paragraphs. A more important question is what you need to do to improve the project’s success rate?

In the below paragraphs, we have listed a few suggestions to improve the project’s success rate.

1-Put together a solid team

A strong and professional team is the number one requirement for project success.

This is easier said than done. You don’t always have access to the best resources.

Sometimes the experts you want are way out of your budget. In addition, some companies have much higher name recognition than your company.

If you compete against Googles and Apples of this word for the same type of talent, you have a slim chance of attracting top talent.   

So how do you go to solve this? Hire the best people you can afford and enhance your team with an outside expert if possible.

If you are a startup, the equity in your company is your best commodity. Use stock options or grants to attract the best talent possible.  

2-Plan systematically and diligently 

Good planning is the first step to putting the project on the right path.

Take a few days to understand the work that needs to be done with your team and plan accordingly.

Going to an offsite place for a few days to plan your new project is an excellent idea.

There are a huge number of project planning tools on the market today. They all offer free trials.

Try a few applications and see which ones you like best. Here is a guide on how to select the best planning tools for your projects.  

3-Establish solid project scope

The sooner you establish what the end product should be, the sooner you can start and ultimately finish the project.

The project scope is critical to the success of your project. You need absolute buy-in from every stakeholder in the project to agree with the scope you and your team define.

The project scope is not complete unless it defines the project goals and objectives, the milestones, tasks, schedule, resources, and the budget. A recent CIO magazine article has a good write-up on this subject.

4-Identify project risks

Most novice project managers do a good job planning a project but never think about the risk associated with the project.

They don’t create a plan to address these issues if they happen during the project development.

Create a risk plan by listing all the risks that you think the project may face during the project duration.

The risks you may face could be for example, what will competition do and what if they introduce something better than the product you will be working on before it is finished.

Or if parts you need to complete the project are discontinued and how to handle this if it happens. 

5-Establish deliverables

Having established the scope, the next step is to establish deliverables.

You need to plan for multiple milestones during the project lifecycle and establish what will be the outcome or deliverables for each milestone.

Milestones should be clear and measurable. They should be a phase of a working prototype. You need to define what the product can do and can’t do for each milestone.  

6-Create a solid project plan

You and your team need to create a project plan to define the objective of the project and how you go accomplishing them.

This is the step before making a timeline or schedule. What are the components that the product is made of? Are there any dependencies between the part that you will be working on?

what are the subsystems in the product? Can each subsystem be tested independently of other subsystems?

In addition, how does the team verify that the product or service works as defined by the product specification and meets the goals?

Without a solid project plan, projects fail at much greater rates.  

7-Create a realistic timeline

Creating a realistic schedule is extremely important to establish a timeline for product deliveries.

Regardless of which project management method you decide to use, you should use the work breakdown structure to break each component into smaller pieces.

Use a three-point estimation process to estimate the task’s duration and a robust Gantt chart to put the project’s timeline together.

A solid schedule helps every stakeholder to have the same view and expectations as to when milestones will be reached and when the product will be released.

8-Establish guidelines for collaboration

We have talked about the importance of collaboration in project settings in great detail in these Collaboration Corner pages.

We have covered why collaboration is so important to the success of projects in several articles.  

Collaboration does not happen naturally. Most people are resistant to collaboration and brainstorming ideas.

You as the project manager need to plan and enforce collaboration guidelines for your project. 

9-Select to right project management method

As I said before one project management method does not fit all projects.

Select the proper project management method based on your team’s experience in the past, the nature of the project you will be working on, and which methods have been used by leading teams in the industry on similar projects or products like yours.

Agile and waterfall are both have pros and cons. Some managers feel one is always better than the other.

Check here for a list of PM tools supporting the Agile method in addition to Binfire.

This is not always true. You need to make sure what method is the best for your project.  

10-Using the right tools

Although no tool replaces talent, and no single tool fits all needs, however, the tools are important in implementing the project correctly.

From development tools to project management and collaboration tools, take the time to choose the ones that fit your requirements the best.

Don’t go with hype, select your PM tools carefully. A lot of projects fail, give your team the best available tools to increase the success rate.


There is always a chance that the projects fail. Sometimes the competition beats you to the market faster. Other times the consumer taste changes.

But most of the time projects fail due to operational failure by the team and the management.

The cost of project failure of the last type mentioned above is not just the money wasted or people’s time and resources spent on the project.

The real cost also includes opportunity cost as mentioned before plus the huge emotional toll on the project’s participants and stakeholders.

When projects fail, the people who planned and worked on them feel they have failed too. This is a huge burden that nobody talks about.

That is why proper project planning, monitoring, and execution are so critical to the success of any project.  

David Robins


David Robins is the founder and CEO of Binfire. David studied at both Cornell and MIT, and was the Director of Software Engineering at Polaroid for 11 years.


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