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Eight reasons business projects fail, and how to fix them

  • Culture is crucial to achieving business goals, but it needs to be addressed more specifically than ‘organisation-wide’.
  • Desired, value-aligned behaviours need to be reinforced in project teams so that they can successfully deliver outcomes.
  • Leadership, accountability and the ability to speak up when things go wrong are just a few of the eight dimensions that should be addressed.

It’s no secret that organisational culture affects business. From productivity to employee retention and talent attraction, resilience to company growth, it’s now firmly entrenched as a key leadership agenda item. More commonly this is because it’s also a risk factor, which is to say, if it’s not working it puts everything else in jeopardy.

Organisational culture is of increasing importance because it affects internal projects, and with digital transformation on the cards for almost every business, such efforts need not only to get off the ground but land successfully, too.

Yet in Australia, AU$139 million is wasted out of every $1 billion spent on such projects.1 In fact, it’s estimated to be $40 million more than the average loss of other countries. While part of this can be attributed to companies not knowing exactly what it is they want to achieve with a transformation project, it’s also increasingly being recognised that some of this has to do with not just organisational culture, but project culture.

Successful cultures, successful projects

In assessing the patterns of thoughts, beliefs, values and actions within an organisation, it is possible to see the links between an organisation’s culture and meeting its strategic objectives. How a company sets itself up to achieve its goals is entwined with how it acts day-to-day.

But subcultures also exist within organisations, be they across jurisdictions, business lines or even teams. Nowhere is this more obvious than in transformation projects. Project culture is different to org culture, and because of this it is easy to overlook if leadership think that, on the whole, they have culture perfected. But project teams can be different.


For one thing, project teams are often set up as temporary groups, created solely for the purpose of implementing change. At different points in the journey of the project, their makeup alters, resourced by teammates, contractors and suppliers who come and go (and for whom, given their casual nature, there is often less cultural investment made). Their success is measured on delivering an agreed end point and more often than not, the project that they are tasked with implementing is happening a lot faster than other organisation-wide change.

In short, they are microcosms not indicative of the way the organisation behaves as a whole. Yet they have immense impact when it comes to the success or failure of a project, which in turn has an immense impact on the success of the business. Therefore, in the same way that organisational culture can create corporate risk, so too can project culture.

Eight ways to examine project culture

In order to understand the culture of a project, we have identified eight behavioural themes that businesses should focus on when attempting to drive positive project outcomes.

  • Leadership action — Nothing sets up a project to fail like a lack of buy-in from committee members, leadership or project sponsors. Make sure that there is clear ownership of the project and its outcomes and that all leaders are prepared, engaged and ‘walk the talk’ in project meetings and publicly across the organisation.
  • Accountability and decision-making — Team members (internal and external) need to understand their roles and responsibilities, to themselves, the project and the organisation more broadly, from top-down and bottom-up. With no clear ownership for deliverables, pointing fingers will become the culture and result in long (unaffordable) lag times to make decisions.
  • Communication — Projects exist as part of a larger organisation, so it’s important that team members understand the impact changes might have on stakeholders and the business as a whole. This goes both ways though, stakeholders and those outside the team should also know the scope of the project, the why of the project, what it means for them personally, and its expected delivery times. Basically, communicate, communicate, communicate.
  • Team sentiment — It should go without saying, but project teams need to have a positive mindset and believe that the project itself will be successful. Everyone should understand the alignment between the project strategy, its objectives and corporate strategy. Project leaders should develop mechanisms to align the team and contractors to the wider org culture ensuring they aren’t thought of as an ‘outside’ function.
  • Speaking up, being challenged — Constructively challenging decisions should be encouraged by leaders, and risks and concerns recorded and reported openly. Speaking up and being comfortable to raise issues in a timely manner without fear or reprisal is critical to avoiding delays or ending up with a project that doesn’t fit the brief. This avoids the ‘watermelon effect’ (green on the outside, red on the inside).
  • Celebrating success (and acknowledging failures) —Similar to being able to raise issues, bad news can’t be swept under the carpet either. Talking about setbacks and mistakes means lessons can be learned, impacts discussed and plans made to work around them instead of hiding errors for the sake of ‘delivering’. Conversely, good news should also be recognised and teams rewarded for success.
  • Collaboration — A collaborative environment, where teams sit together when possible and meet frequently, will encourage camaraderie and team cohesiveness, even with less-permanent contractors or vendors. Sharing project-wide views and decisions, as well as lessons learnt will lead to two-way communication and a willingness in the team to be flexible and take on tasks.
  • Capability and capacity — Just like organisational leadership, when it comes to culture, project team leaders also need specific skills to do the job required. Do they know how to deliver a transformation, lead and develop cohesive capable teams? Do they have the time capacity to invest in the successful delivery of the project? If the answer to these questions isn’t a clear yes, it could lead to problems down the road.

The value of culture

The most basic question leaders can ask in relation to their organisation’s culture is: do I hear ‘yes we can’ or ‘not this again’ when projects, change or transformation are mentioned? If the response is the latter, then it’s time to take a closer look at what needs to change. Projects can be challenging enough without swimming against a tide of negative sentiment.

When the behaviours of the team — and its leadership — are aligned with the desired outcomes of the organisation and the project, the risk of culture undermining business goals is far reduced.

For business then, an emphasis should be made towards reinforcing these eight dimensions with positive behaviours. Effort should also go towards ensuring that project culture aligns with organisational culture — as much as possible, projects should be an extension of the organisation, with the same values and behaviours.

It will go a long way towards setting up and maintaining an inclusive project culture that will in turn, support the successful delivery of a transformation project and the goals of the business itself.

By  Annabelle Taggart,  Lyndal Lee, Katy Waterhouse - PwC

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