In thinking of good examples of project failure (unfortunately, I’ve seen more than one in my time), I thought we’d discuss a failed company integration program, as it illustrated typical failure points.
A mid-market manufacturer purchased two companies – one smaller and one larger than itself. There was a vast opportunity in terms of product synergies; however, it failed to yield even meager results. What went wrong? 1) Too many chiefs and no Indians. 2) Lost critical knowledge base. 3) Forgot to ask questions.
1. Too many chiefs and no Indians – As well-intentioned as the leadership was in terms of hiring experts with knowledge in the acquired companies and with large-company experience (since, clearly, the company was going to grow dramatically in size through the process), there were not nearly enough Indians to implement the millions of project tasks requested by the chiefs. No program can be successful without considering the scope and complexity of implementation.
Projects do not fail in formulation; they fail in implementation. The same is true of strategy. Therefore, if there are too many chiefs coupled with no Indians, you can easily have the best strategy in the world. While this strategy which should yield significant synergies with huge profit potential, it can still fail miserably. Not only did the companies not integrate successfully but customers were lost and cash ran short.
2. Lost critical knowledge base – Another tempting and normal reaction to planning for the integration is to move people among jobs and change responsibilities. If handled with expertise, this is fine; however, it rarely occurs. Even if handled ok, people tend to become disheartened if they perceive the new job as a demotion and/or they have a hard time adjusting to the new situation. It’s likely their new boss has transitioned as well, and so it can be a tough situation. Sometimes, they leave. Sometimes, they end up fired. And, sometimes they just become unproductive. All are undesirable results.
For example, in the integration project, the management team hired new leaders, moved employees to different roles and sometimes even to different departments and/or locations, changed responsibilities etc. They did this in order to reorganize so that the “right people were in the right positions” to support the new organizations. All done with the best intentions in maon. However, in the end, they lost a critical knowledge base of how the processes and systems worked to support customers. As a result, although everyone worked hard, customer service levels dropped by 25-50%.
In order to make this transition successful, it is vital to think carefully about who has what knowledge, skills, and history. Think about your leaders – both formal and informal. The trick is to utilize the informal and formal leaders effectively to leverage the collective talents of the organization to achieve a successful integration. Don’t forget about the critical employees who keep things going – shipping, receiving, calling customers etc. Each person plays a valuable role. Have you defined how each person fits into the integration plan? Have you communicated this to them?
3. Forgot to ask questions – Last but not least, don’t forget to ask questions. There is no way to know everything required to integrate successfully without continually asking effective questions. Questions need to be asked of each company, department, and person as the integration proceeds.
In the integration project, there were so many tasks and issues to address that the executives and project leaders didn’t have the time to ask enough questions. Thus, they didn’t know we were shipping 50% of our typical volume. They didn’t realize customers weren’t receiving the same level of service. They didn’t realize that production was inefficient. And they didn’t know what the suppliers expected. Without this critical information, it was easy for the systems to fall apart – and the integration program to fail.
Instead, ask questions. It’s important not to just ask random, meaningless questions, as that not only wastes time but it will also not help to achieve your goal. Take the time to learn about the culture, people, processes, and systems, and then ask questions. Make sure project team members know that you care about their responses.
It is always easy to identify issues with others’ projects (and tempting to tell them all about it); however, it’s not nearly as easy to see or implement on your own projects. Spend the time upfront to think through examples of program, project and task successes and failures – both yours and others. What were the root causes of failure? Ask the project leader. Ask team members. Incorporate the lessons learned into your project, and you’ll succeed when it counts the most!
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Believe it or not, projects fail…all the time. And not just small projects from small organizations, but large ones of huge significance. Some of the most powerful companies in the world have experienced project failure and lost billions of dollars as a result. Yes, BILLIONS! Imagine being that project manager?!
Hopefully, you’ll never experience a career setback such as a multi-billion dollar failed project, but it is likely that you’ll incur one or two hiccups at some point along the way. To make you feel a little bit better about these bumps in the road, here are some of the biggest fails in project management history.
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1. Target’s entry into Canada
Target Corporation, the second-largest discount retailer in the United States, behind Walmart. A company that is worth roughly 72.62 billion US dollars [March 2016].
What did they attempt to do?
They attempted to enter the Canadian market. It made perfect sense at the time as many Canadians would cross the border and come down south to their United States neighbors to do their shopping. Coupled with the fact that the company was reaching maturity in the USA, Target felt it time to expand their operations.
In order to facilitate this market penetration, Target purchased 189 leases from Canadian retailer Zellers (a similar company to Target). Not only did this allow them to set up 189 new shops across Canada, but it cleared out one of their competitors in the process.
I know what you’re thinking: ‘two birds, one stone’. But what if one of those birds doesn’t fly quite as expected?
Why did they fail?
The Canadian market was waiting with bated breath for the introduction of Target to the Great White North. Excited for the far lower prices they were surely going to experience, and heavier pockets, there was quite a bit of hype around this market entry. But all was not as they thought.
Two issues severely hindered this project. Firstly, Target prices weren’t that much lower than other similar competitors throughout Canada. The Canadian public was not particularly drawn to the Target brand and as a result, continued their shopping in other supermarkets that were more familiar to them. Secondly, Target suffered supply-chain difficulties leaving them with empty shelves and frustrated customers.
The media hopped on board the already sinking Target ship and cut some extra holes to speed up the process. Scathing reviews that reflected the disappointment of the Canadian shoppers damaged the Target name even further.
Ultimately, a failure to live up to customer expectations, a lack of situational awareness and analysis, quality issues in relation to the supply chain and a lack of risk management caused this US megastore to completely miss the target on this project, losing 7 billion US dollars in the process.
2. NHS’ civilian IT project
The National Health Service is the publicly funded healthcare system for England. It is the largest and the oldest single-payer healthcare system in the world.
What did they attempt to do?
The NHS had great plans to create a unified electronic health records system for all British citizens. With an intention to serve 40,000 GPs and over 300 British hospitals, this project was going to be one of the world’s largest IT projects ever attempted.
If you’re familiar with the IT industry, you’ll be aware of the high failure rate of many of its projects. This project was the largest ever attempted so was bound to be risky and cause a number of issues.
It’s also worth noting that the NHS is a taxpayer-funded organization, making this project failure even more high-profile than Target’s market entry mishap.
Why did they fail?
The NHS bit off more than they could chew and started too big too quick. This project was astronomical in size and was always going to be difficult to finish out successfully.
Brian Randell, a member of the group of academics who became concerned about the project and co-authored a dossier outlining his and others concerns, said the following about the project:
The NHS’s huge NPFIT project, intended to serve 40,000 GPs and 300 plus hospitals, was claimed to be the world’s largest civil IT project. In fact, its ill-fated intended central core, a nation-wide Electronic Health Record (EHR) facility, dramatically illustrates one of the most serious causes of large IT Project failures. The system of systems that was to provide EHRs was initially designed by a large central team and intended as a complete “big-bang” replacement for the many and varied existing EHR systems. It would have been far better to employ evolutionary acquisition, i.e. to specify, implement, deploy and evaluate a sequence of ever more complete IT systems, in a process that was controlled by the stakeholders who were most directly involved, rather than by some distant central bureaucracy. Authority, as well as responsibility, should have been left from the outset with hospital and general practitioner trusts to acquire IT systems that suited their environments and priorities – subject to adherence to minimal interoperability constraints – and to use centralized services (e.g., for system support and back-up) as if and when they chose.
3. The Death Star
The Death Star was the Empire’s (an army of sorts) ultimate weapon: a moon-sized space station with the ability to destroy an entire planet. It is, of course, a fictional weapon from the popular movie franchise, Star Wars. It was destroyed in the Battle of Yavin.
Star Wars is an American epic space opera franchise, centered on a film series created by George Lucas. It depicts the adventures of various characters “a long time ago in a galaxy far, far away”.
Even in fictional environments, projects can still fail!
What did they attempt to do?
The Death Star was going to be the ultimate weapon. Capable of wiping out whole planets with a single blast of its super laser, it was the deadly destroyer that the Empire was going to use to control the galaxy.
Basically, this mother-ship was going to give the Empire control of anything and anyone they wished. By holding such a powerful weapon, they would have complete control and strike fear into their enemies.
Why did they fail?
This particular project failed for a number of reasons. The over-arching issue was the inability to plan for attacks on the ship. The project team was so focused on creating a weapon capable of destroying anything in its path, appropriate defensive measures were not put in place. Essentially, the Death Star had no risk management strategy put in place to mitigate against risks such as flying spaceships captained by Chewbacca and friends.
The cost of this failed project? Well, the White House (yes, the actual White House) estimated that the ship would cost 850,000,000,000,000,000 US dollars to build in today’s economy.
In conclusion, projects fail…all the time and sometimes with immense financial repercussions. So plan appropriately for your project and consider all possible elements that might impact it, be that an unresponsive target market, an inability to complete the work due to its large scale or a spaceship full of determined space wanderers with enough gumption to take on you, your army of men and the superweapon you built with the incredible amounts of cash stashed under your mattress!