5 Reasons Projects Fail: #3 Unrealized Benefits
This is part 3 of 5 of a series. To see the last post on “Procrastinating bad news”, click here.
The common components of project success correspond to the triple constraint model. These components relate to the three sides of the Iron Triangle: “On-time,” “On-budget,” and “Onspec.”
Even though this is three components, it is just a 2- dimensional view. While a triangle has three sides, it is still a 2-dimensional shape. In this case, the base of the triangle (on-spec) represents lifecycle management. On-time and on-budget are two arms of project management, which makes up the height of the triangle.
To show how incomplete this view of project success is, we’ll use an example: We once saw a project where an agricultural supply company had developed a new product for inseminating cows. It was an effective product that allowed farmers to get much more bang for their bull. The marketing department estimated that if just one in every tenth farm bought the product, they could make over $20 million. The company invested millions in developing the product assuming they could make an almost 10:1 return on investment. When they released the product released, no one bought it. It was shelved with zero return, so the company lost all of its investment.
The example fails to mention whether the product was delivered on-time, on-budget and on-spec. Do those questions matter? Even without that information, we can conclude the project was an utter failure. This illustrates the third dimension of project success. If a project doesn’t realize the intended benefits, it has failed. This makes up the depth of the triangular prism in the figure below:
Not only is this the most overlooked dimension of project success, it’s the most important. If the cow insemination product had made $20 million as projected, it could have gone 50% over-budget and a full quarter past schedule, and it still would have had a massive return on investment. The project would have gone down as a success even if it missed the mark in almost every way we evaluate projects from a traditional project management perspective.
This perspective of failure should be important throughout this series. An organization can be devoid of project failures while still being rife with individual project issues. In a culture of project perfection, even when things get messy (as they inevitably do in the real-world), the project does not ultimately fail.
For a free copy of our white paper Eliminating Project Failure: Creating a Culture of Project Perfection, go here.