Why do we still let projects fail? by David Hillson, the Risk Doctor on 10-Jan-2013

Why do projects fail? When Martin Cobb was CIO for the Secretariat of the Treasury Board of Canada in 1995, he asked a question which has become known as Cobb’s Paradox, "We know why projects fail; we know how to prevent their failure – so why do they still fail?" Speaking at a recent UK conference, the UK Government’s adviser on efficiency, Sir Peter Gershon, laid down a challenge to the project management profession, &qot;Projects and programmes should be delivered within cost, on time, delivering the anticipated benefits". Taking up the Gershon Challenge, the UK Association for Project Management (APM) has defined its 2020 Vision as "A world in which all projects succeed".

This sounds good, but is it really possible? And is it even desirable? Do we want to limit the scope and ambition of our projects to only those that we are certain can succeed? Or will this reduce innovation, creativity and appropriate risk-taking? A spectator at a recent Cirque de Soleil performance was heard to say, "I want to see them do things that they can only do half the time". Isn’t this what every project sponsor or portfolio manager should be saying?!

There are several reasons why it might be impossible to resolve Cobb’s Paradox or to meet the Gershon Challenge or to achieve APM’s 2020 Vision:

• All projects are risky. Uncertainty is built into every project, since each one is unique and complex, based on assumptions and dependencies, delivering change through people. Although the degree of risk might vary, the zero-risk project does not exist. This means that the probability of success for any project is less than 100%, so there is always the possibility of failure.
• Most projects include unmanageable risk. Of course we aim to manage risk in our projects, but risk management can never be 100% effective and each project will carry some residual risk. As a result, some unmanageable risks will occur on every project, challenging our ability to meet schedules, budgets or performance requirements. On some projects the effect of unmanaged risk will be so significant that these projects will fail.
• Risk management is not always done well. Even though we have been managing risk on projects for centuries, there are still weaknesses in how we do it on many projects. Ineffective risk management leaves our projects exposed to unacceptable levels of risk and causes failure.
• Project charters often omit risk thresholds. When project sponsors commission projects, they should define risk thresholds against each objective in the project charter or business case. This tells the project team know how much risk is acceptable in their project and provides the target for risk management. But if project sponsors do not understand their risk appetite they will not set risk thresholds, leaving the project manager unable to manage risk effectively.
• Projects should exist in a risk-balanced portfolio. The concept of risk efficiency should be built into the way a portfolio of projects is built, with a balance between risk and reward. This will normally include some high-risk / high-reward projects and it would not be surprising if some of these fail to deliver the expected value.
• Innovation is built on failure. For research and development projects or those with a high innovation content, failure is an expected and natural part of the process. Edison failed many times before he invented a working light-bulb and creative organisations expect to do the same.
• Failure to learn. We don’t examine past failures to learn lessons for future projects. Too often we repeat our mistakes and fail again for the same reasons. Cobb was wrong – we don’t always know why our project has failed, so we can’t learn how to prevent the same type of failure happening in future, so we fail again.

How should project-based organisations respond to the challenges laid down by Cobb, Gershon and APM? Should we accept unrealistic targets and be branded as failures if some of our projects do not succeed? Those of us in the project management community should help our stakeholders to understand that no project is without risk and project failure will occasionally happen. We also need to make sure that our risk processes are fully effective, so that we minimise the chances of failure, but even with the best risk management, we cannot guarantee 100% success for every project.

Despite our best efforts, it seems that Cobb’s Paradox cannot be resolved, the Gershon Challenge is unrealistic and the APM 2020 Vision may be unachievable.



For more information or to contact Dr David Hillson, the Risk Doctor, please visit: www.risk-doctor.com




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