Weak Project Results: Every Second Project Fails, but Now Companies Want More Transparency
The set timeline wasn’t met, the budget isn’t enough, and the defined goals are no longer within reach. What sounds like a perfect storm is unfortunately commonplace for many companies. For years, studies have confirmed that projects repeatedly fail – despite sophisticated methods, well-trained teams, experienced consultants and state-of-the-art tools. According to a study by Bain & Company, only about one in eight projects delivers the desired results. The balance sheet for large-scale projects looks even bleaker: All in all, Roland Berger reports that 90 percent of mega projects exceed their budget and timeline.
The Extent of Failed Projects Is Shocking
Are Bain and Berger painting a distorted picture for the sake of good headlines or is the extent of failure actually this huge? We decided to investigate and spoke with an expert for communication and collaboration in organizations. Ute Sommer is co-owner of Sommer & Partner Consulting and supports companies in improving the success rate of their projects. Ute has analyzed numerous project studies conducted in more than 7,800 international companies between 2002 and 2015 and arrived at a terrifying result: More than 50 percent of all projects fail and either don’t meet the budget specifications or timeline or don’t lead to the expected benefits.
The surprising part about the results of the analysis, says Ute Sommer, are the factors that lead to failure. “Rather than technical or organizational reasons, so-called soft factors are at the top of the list when it comes to factors leading to failure,” Ute points out. “The cause of project failure is non-functioning communication and cooperation within the project itself or between the project team and the organization.”
Communication expert Ute Sommer: “Regularly surveying project participants and implementing new ideas can help reduce the project duration by up to 35 percent and increase the success rate by 50 percent.”
Image: Sommer & Partner Consulting
Communication and Collaboration Are the Key to Project Success
Failing and making mistakes remains a taboo subject in many companies – albeit less and less. For this reason, interpersonal factors are often disregarded in the search for the cause of project failure, and complete transparency isn’t always desired. “Transparency, feedback culture and learning from mistakes give companies the opportunity to develop as a learning organization, to successfully complete projects and to get ready for the future,” notes Ms. Sommer.
Conversely, success factors can also be derived from the analyzed project studies. Project participants want clear and up-to-date communication with the possibility of giving feedback regarding the course of the project and of introducing new ideas. Project teams want more cooperation instead of confrontation and demand trust and loyalty. Project managers rank the ability of management to actively listen as particularly critical to a project’s success. It’s a matter of asking the right questions in an open corporate culture that’s consistent with the changes the project is intended to achieve.
Those Who Ask Find Solutions – Those Who Don’t Find...Nothing!
Openness and transparency aren’t easy to implement in traditional organizational structures – and sometimes they aren’t even wanted. Communication is usually linear and oscillates between two hierarchical levels: The boss communicates to the employees and the employees to the boss. In a digitally networked work environment in which functioning teamwork is the key to success, this isn’t enough. “Until now, many companies didn’t pay much attention to the issue of communication and cooperation, but thanks to the agile work environment, this will fundamentally change,” says Ms. Sommer. “Completely new communication channels are opening up, and the dismantling of hierarchies, the formation of networked teams and technical tools such as collaboration platforms are creating transparency.”
The exchange of information is taking place in networks, and communication is becoming more open and agile with the result that project risks can be identified much earlier. “Those who regularly survey those concerned with and involved in a project will become aware of problems much more quickly and can then react sooner, as well. I’m firmly convinced that this alone can reduce the project duration by as much as 35 percent and increase the success rate by a total of 50 percent.”
Summary: More than half of all projects fail because companies focus too little on the so-called soft factors of communication and collaboration. Digitalization, which is eliminating antiquated hierarchies and leading to more transparency and openness, now offers the opportunity to change this. The expert Ute Sommer from Sommer & Partner Consulting estimates that regularly surveying all project participants and investing in interpersonal communication can increase the success rate by 50 percent. How successful are you with your projects? Contact us and request a free live demo of Surwayne today!