Project Failure is a Frequent Challenge
Nearly every project and program manager have, at some point, overseen a struggling initiative. The reality is that project failure is not uncommon, and its cost is staggering. According to the Project Management Institute’s (PMI) 2017 Pulse of the Profession report, organisations waste an average of $97 million for every $1 billion invested in projects and programs due to poor performance. These losses highlight the critical need for stronger governance, clearer accountability, and more effective project execution. In 2025, the need for project recovery services is stronger than ever.
There are myriad reasons why projects go wrong. The project could have been poorly scoped and estimated, stakeholders may be misaligned on what success looks like, or vendor and subcontractor performance may be at fault. Whatever the reason, when a project goes off track, it is our responsibility as project professionals to recognise the signs, communicate the issues, and get things pointing in the right direction. This can often be easier said than done.
Recognising the Warning Signs of a Failing Project
In the early stages of a project, delays can be expected as things gain momentum. Resourcing, for example, is a common issue—it can take longer than planned to find and onboard the required resources. Steering committees and other governance forums are usually patient with the challenges associated with initiating a large project or transformation.
As key milestones approach, successful initiatives regain momentum, and status reports (hopefully!) begin to show a sea of green indicators. However, some projects never stabilise. Just as one issue is resolved, another emerges—stakeholder conflicts flare up, critical elements of the scope are overlooked, or a contractor unexpectedly goes bankrupt. While poor planning is often a factor, persistent project instability can stem from deeper systemic issues: unclear governance, shifting organisational priorities, unrealistic timelines, lack of executive buy-in, inadequate risk management, or even cultural resistance to change. These underlying problems can create a cycle of continuous firefighting, preventing the project from ever gaining firm footing. Regardless of the root cause, project managers and sponsors must be on high alert for the signs of a failing initiative.
Assessing the Situation: Where Do Things Stand?
As project management advisors, this is the stage where we often enter the picture. To assess the state of a failing initiative, we quickly execute two key streams of activity:
- Stakeholder Interviews – We conduct confidential interviews with key stakeholders, including the project manager and project sponsor, to gather insights on what is happening and why. While project managers could conduct these interviews themselves, we find that stakeholders tend to be more honest and open with external, independent parties.
- Key Artefact Review – In parallel with stakeholder interviews, we review project artefacts for quality and completeness. This typically includes the final business case (including benefits), the risk register, the project management plan or charter, the stakeholder management plan, and other relevant documents. If the data is incorrect or incomplete, it may indicate capacity or capability issues. Capacity issues are generally straightforward to resolve, whereas capability gaps can lead to dysfunctional behaviours and a more complex treatment plan.
Establishing Crisis Governance and Leadership
If we determine that the project manager is not the right leader for the initiative, we highlight this in our findings report. In some cases, we may also recommend appointing a different project sponsor. Having the right senior leadership in place is critical to a successful turnaround.
Too often, organisations assign project managers based on availability rather than suitability—an approach that is unacceptable in a recovery mission.. Once the right leader is in place, the next critical step is to define clear roles and decision-making authority across the team. To achieve this, we often facilitate a RACI (Responsible, Accountable, Consulted, Informed) workshop, ensuring that every team member understands not only their own role but also the responsibilities of others. These discussions are rarely straightforward, as misunderstandings are common. A session planned for an hour may extend into multiple meetings, but when well-facilitated, this investment of time always proves valuable.
Another critical step is reviewing governance practices. If poor sponsorship or weak governance is causing the issue, the team must implement targeted interventions. Project managers can however, hesitate to escalate risks. Delaying status changes from green or amber to red until a risk becomes a full-blown issue. While this can sometimes be due to project manager error, it is often a symptom of a governance culture where ‘red is bad.’ In reality, red is good—it signals the need for action. This allows teams to address issues early and implement mitigation strategies before they escalate. Overcoming this ‘fear of red’ is often a key cultural challenge.
If the issue stems from project manager error, a leadership change should resolve it. However, if poor sponsorship or weak governance is the root cause, targeted interventions are needed. We frequently conduct sponsor and governance education sessions or provide one-on-one coaching to address these gaps. Businesses place high expectations on project sponsors, yet many senior leaders are not ‘project people’. It is reasonable for them to require additional knowledge transfer. After all, you cannot manage or provide oversight of what you do not fully understand.
Rebuilding the Plan: Prioritisation and Quick Wins
While it may be tempting to assume that a leadership change or external review will solve the issue. We advocate for the ‘slow down to speed up’ approach. Once we understand why the project is failing, it is prudent to re-plan.
Key questions to consider include:
- What is the impact of delays so far? This should include cost, time, scope, stakeholder impact, and overall benefits.
- What are the current critical path items and dependencies, and how confident are we in achieving them given past issues?
- Do we fully understand key risks? Are mitigation strategies in place, and is there a process for identifying emerging risks?
- What quick wins can we achieve to restore sponsor and governance confidence?
- Do the business case benefits still hold now that the project is delayed and over budget? If not, should the project continue?
Detailed planning may slow delivery in the short term, but without it, there is a higher risk of wasted effort and missed milestones. Slowing down to speed up is a fundamental principle in project turnarounds.
Stakeholder Re-engagement: Winning Back Confidence
After approving the revised plan and securing additional resources, the team’s next priority is to re-engage stakeholders.
Stakeholders primarily care about how project outcomes affect them. Budget concerns are secondary, and schedule changes matter only when they impact something they need. Scope changes can be contentious as stakeholders may resist changes they do not find valuable. To manage these challenges, consider these key principles:
Embedding Lessons Learned for Future Success
One of the most frustrating aspects of project turnarounds is that many organisations fail to learn from past mistakes. It is easy to blame an underperforming project manager or a bad contractor, but in reality, most failing projects suffer from systemic organisational issues.
We recommend that all projects include a structured lessons-learned process, backed by a centralised register to ensure that new initiatives review insights from past projects. Capturing lessons is easy, learning from them is much harder.
If we can help you regain control of your struggling projects reach out today for a confidential conversation on our range of project recovery services.
