Project Success and Failures
So how does one determine if a project is successful? Lets first look at some examples
and see if the traditional metrics are valid.
One of the difficulties is that most case studies and project management examples
only provide examples of success. Those that do show failure are usually ones that
are government or public works projects. This makes examples like the following difficult
The following are examples that were provided by Hugh Woodward, PMP:
- Sydney Opera House: With its graceful sails dominating Sydney Harbor, the
Sydney Opera House is arguably one of the most recognized buildings in the world.
Yet, from a project management perspective, it was a spectacular failure. When construction
started in 1959, it was estimated to cost $7 million, and take four years to build.
It was finally completed in 1973 for over $100 million.
- 2002 Olympic Winter Games: The 2002 Olympic Winter Games was a very successful
project from a project management perspective, winning designation as PMI's 2003 International
Project of the Year. It achieved the key
dates, of course. But it deviated from the conventional approach to "success" with
respect to its cost performance. The project managers boast that they turned a $100
million deficit into a $400 million surplus, not just by eliminating "nice-to-have"
items, but also by securing additional funds. Clearly, success was measured by profitability,
not by achieving a specific cost target.
- Batu Hijau Copper Concentrator: PT Newmont Nusa Tenggara's Batu Hijau copper
concentrator was the world's largest "greenfield" startup when it was commissioned
in September 1999. It was an extremely
complex construction project located on the remote Indonesian island of Sumbawa involving
1,704,000 design hours, 48,791,000 construction hours, 551 separate systems, and 19,200
engineering drawings and documents. Nevertheless, it was completed one month ahead
of schedule and $100 million under budget. It was considered very successful, but
not merely because of its cost and schedule performance. Rather, it was viewed as
successful because the production ramp-up was faster than expected, producing a cash
flow from operations exceeding 200% of budget within a year after start-up. In this
case, the project team focused on the real objective that was to produce copper concentrate,
not to achieve the cost and schedule targets.
- Project Orion: This massive effort to develop Kodak's new Advantix photographic
system was reputedly very well managed from a project management perspective. PMI
recognized it as the 1997 International Project of the Year, and Business Week selected
the system as one of the best new products of 1996 (Adams, 1998). But Kodak's stock
price has fallen 67% since the introduction of the Advantix system, in part because
it failed to anticipate the accelerating switch to digital photography.
- Corporate Intranet: Finch describes a project that involved the implementation
of a corporate intranet to globalize and improve communications. From a traditional
project perspective, it failed to meet its success criteria, but not significantly.
It was one month late and believed to have been accomplished with a small budget overrun.
But both the project manager and senior management viewed the project as successful.
The hardware and software had been installed successfully with a minimum of disruption,
thereby providing all staff members with access to the corporate intranet. Following
implementation, however, employees made only limited use of the intranet facilities.
The main objective of the project was therefore not achieved. In this case, both the
project manager and senior management focused on an objective that was too narrow.
- Plant Water Conservation: A manufacturing plant in a semi-arid part of
the USA was ordered to reduce its water consumption by 10%. Although the plant was
already one of the most water-efficient facilities of its kind in the world, the project
team compiled a list of additional recycling and conservation measures, and began
implementation. Several months later, the company decided to close down an orange
juice facility that happened to be located at the same site, thereby reducing water
consumption by almost enough to meet the mandated target. The project team was thus
able to return the unspent funds to the company. Had it been focused on implementing
the project scope according to the initial plan, this opportunity to achieve the real
goal without additional spending would have been missed.
- Manufacturing Plant Optimization: A paper manufacturing company with five
plants across North America decided to increase its manufacturing capacity by embarking
on a de-bottlenecking program. A project team was formed to install the necessary
equipment, and charged with completing the work in 18 months at a cost of $26 million.
But almost immediately, the project team was asked to defer major expenditures until
an unrelated cash flow problem was resolved. Rather than stop work completely, the
team adopted a strategy of prototyping the technologies on which the de-bottlenecking
program was based, and actually developed some cheaper and more effective solutions.
Even when the project was authorized to proceed, the team continued this same approach.
The project eventually spanned five years, but the resulting capacity increase was
three times the initial commitment. Not surprisingly, the company immediately appropriated
another $40 million to continue the program.
- Laptop Upgrade: The IT division of major international company was upgrading
all the employee workstations to a new platform. Because the laptops used by the sales
division were near the end of their leases, the project manager decided to issue new
laptops with the new platform already installed, thus significantly reducing the overall
project cost. Unfortunately, once this decision was made, schedule became the critical
project objective, and the fact that the new platform was incompatible with some unique
software used by the sales division was completely overlooked. The inevitable result
was an enormous productivity loss, for both the project team and the sales division.
- Senior Citizens Center Relocation: A senior citizens center in a small
US city was granted a parcel of land to construct a new state-of-the-art facility.
They immediately began preparing to move, and engaged an architect to develop the
plans. They also recognized they would need additional revenue to operate the new
facility and that the necessary funds were available from government sources provided
the center was accredited. Therefore, they also engaged a consultant to pursue accreditation.
Both projects proceeded independently for several months, and would have continued
except for a chance meeting between the architect and the consultant. After discussing
their respective work, they realized that the accreditation criteria required certain
building features that the architect had not incorporated. Scarce funds had already
been wasted, but that chance meeting narrowly averted a further $500,000 in re-work.
So in these examples, which ones were truly successful? Examples like the 2002
Winter Olympics and the Batu Hijau Copper Concentrator would suggest that these are
truly successful because they not only met the traditional project managers' definition
of success, but also met the projects sponsors' perception of success.
As we start to look at the examples like Project Orion, the Corporate Intranet
and the Laptop Upgrade, we notice that the traditional metrics start to fail. These
projects are considered successes in project managers' definition of success, but
failed at meeting the sponsors' success criteria. The project Orion example is quite
astounding as this project was recognized by PMI (Project Management International)
in 1997 as the International project of the year. Yet it did not increase Kodak's
revenue, because they did not foresee the adoption of digital cameras.
Most interesting are the examples of the Manufacturing Plant Optimization and the
Sydney Opera House. They both failed to meet the traditional project managers' success
metrics but were in fact considered successes. This is particularly shocking when
you see that the Sydney Opera House had a "cost overrun of 1300%" and a "schedule
overrun of 250%".
Once we realize that projects can fail to meet the traditional metrics of success,
but still be successful to the stakeholders, this creates a quandary for the project
manager. How does one really define success? Is it possible that a "Challenged" project
could be canceled that would have met the sponsors' needs? Is it also possible to
identify a project that should be canceled that is currently on time, on budget and
meeting the defined needs?
Hugh PMP, PowerPoint Presentation to NASA on March 23, 2005, Available On-Line at:
23. Architecture Week, 2003
24. Foti, 2004
25. Enos & Rogers, 2002
26. Bandler, 2003
27. Finch, 2003
28. Woodward, Hugh, PMP, Managing Editor of PMFORUM.ORG, PP 2-3 Beyond
Cost, Schedule and Performance: Project Success as the Customer Sees It, in an
unpublished paper sent by Email to the author