Project Success and Project Failure: How Can It Be Judged?
5th June 2015
The importance of hindsight in project management and some of the dangers in applying 'success' and 'failure' terminology
Successful project management is based on meeting expectations, not only those of the stakeholders but also, importantly, our own. In fact, our own expectations may have changed during the lifecycle of the project. The hindsight that is generated through the lifecycle may have enabled us to realize that the ambition was either too great, or not great enough.
If the objectives that were set at the start of (or modified during) the process have been met, we can state that a project has succeeded…but this might not be the basis on which the project is judged by the stakeholders.
The converse is often true. The original objectives had not been met; we state that the project therefore failed, but then again this may not be the perspective that develops over the life of the outcome of the project.
We can look at this in three ways:
- Did we meet the performance objectives?
- Did we deliver to stakeholder expectations?
- How will it be judged?
We could ask a fourth question:
Did we deliver something of different value than expected (i.e. to a greater or lesser extent)?
The Sydney Opera House and Jindal Steel and Power: Two Different Project ‘Failures’
Wherever we look, it seems there are reports of projects ‘failing.’ Across the globe, projects are routinely reported as a ‘failure’ a ‘catastrophe’ or a ‘disaster.’ We could also ask whether the opportunity to provide a good story is greater than the opportunity to reflect in a more sober manner.
The first example is the Sydney Opera House; from a project perspective this icon of Australia presented many opportunities for news stories. An interesting aspect of this scenario is that the ‘bad project’ headlines are still associated with the Opera House decades after it was constructed and even when it continues to provide a significant input to the Australian economy. It was late; it was over budget; it caused significant trauma among stakeholders, and yet, according to modelling by Deloitte, the Opera House adds $775m to the Australian economy every year. This does not seem the language of failure.
In contrast, let us consider a second example. In 2007, the Indian company Jindal Steel and Power Ltd secured a contract for an integrated mining and steel project in Bolivia. Intending to invest $2.1bn, the project was expected to create 12,000 jobs and $200m per year for the government of Bollivia. The project had been on hold for five years when Jindal terminated the contract with the Bolivian government, citing issues over the supply of gas. Gateway House (2013) offered an analysis of this in two perspectives; they identified four areas that contributed to the failure as:
- Complex political relationships;
- A misjudgement of political power;
- Disproportionate size of investment raising unrealistic expectations;
- A failure to evaluate the scenario sufficiently.
Secondly, they suggested that key lessons had been learnt, remarking that ‘a brilliant business plan is not enough,’ and emphasizing that a ‘thorough political and risk analysis is necessary.’ This example appears to exhibit the characteristics of a project that genuinely failed to realise the original objectives.
We have seen examples of projects that are more characteristically failures, as they are stopped for a variety of reasons, often leaving at least one stakeholder group with a hold in their investment, a gap in their expected capability, or a project situation which is completely unfinished. Some projects are described as failures despite succeeding in a number of respects. The terminology is often misapplied and, if expectations are not managed, sticks to the project for a long time.