Projects fail. This is not new; projects having been failing for years. Studies have been done on why projects fail. The Project Management Institute (PMI) reported in the Pulse of the Profession® (2013a) that poor communication is the number one reason why projects fail. In fact, PMI states that poor communications is a contributing factor in 56% of the projects that failed.
But is this the fault of the project manager? A good project manager follows the appropriate methodology for the project, including using a variety of communication tools. But it is not just the method of communication that matters, it is the also the content of the communication that is important. The project manager needs to communicate with the project sponsor and stakeholders in the language of the business. The project manager needs to take the project data and convert it into business information that is actionable for the project sponsor and key stakeholders.
To do this, there are two tools the project manager can use. The first is to determine how the product or service of the project supports the organizational strategy. Knowing how the project supports the strategy of the organization will provide the language of why it is important for the project sponsor to support the project.
The second tool is the business model canvas, which uses nine building blocks to describe how the strategy of the organization is implemented through organizational structures, processes, and systems. Knowing which block the project impacts will provide the project manager with the context to describe the project in the language of the business.
A project manager that speaks the language of the business will communicate more effectively with the project sponsor and project stakeholders, and improve the chances of the project meeting its objectives.
I have not met a project manager who wants their project to fail. Every project manager I know works hard to ensure that his or her project is successful. As a project manager, there are so many areas to focus on: obtaining resources, developing the project team, managing clients and users, dealing with change requests, monitoring risks, updating project sponsors and stakeholders, managing subcontractors, and the list goes on. Project managers work hard to ensure the project will meet its objectives; yet, there are times when project still fails.
There are many reasons why projects fail and some of these reasons are outside of the project manager's control, such as a change in the organizational strategy. However, poor communications is the main reason that projects fail, and also an area that project managers can impact. In this paper, I will describe two tools project managers can use to improve their communications. The two tools understand how the project supports the organization's strategy and the business model canvas, which focuses on helping the project manager understand the business of the organization. Understanding the business will provide the project manager with the language of the business. With the language of the business, the project manager can then describe the project to the project sponsors in terms that resonate with them. The project manager can describe the project issues in terms of the impact to the business, which the project sponsor can more easily understand, and thus, provide better support to the project.
If the project is failing, there is a good chance that the project manager contributed to the failure through poor communications, not communicating in the language of the business.
Why Do Projects Fail?
PMI's Pulse of the Profession® reports that for organizations with high project management maturity, 27% of their projects did not meet their original goals and business intent; and for organizations with low project management maturity, 47% of projects did not meet their original goals and business intent (Project Management Institute, 2012). Although these numbers have improved over the years, there are still many projects that are not successful.
Surprisingly, I have found one of the harder tasks to accomplish is to determine if a project has failed. In best practice, the project charter should state how the success of the project is measured, but often, this is missing or it is not clear in the project charter. Not having a clear definition of success for a project makes it hard to determine whether the project has failed.
However, organizations do figure out that projects fail. There are a number of reasons (or excuses) why projects fail, including:
- Poor communications;
- Not linked to strategy;
- Unclear objectives, unclear what success looks like;
- Resources not available;
- Unclear requirements;
- Poor methodology, poor planning, bad tools;
- Poor organizational change management;
- Scope creep;
- Poor testing;
- No user involvement, not aligned;
- Lack of leadership; and
- No executive support.
But the research I have reviewed and my own experience indicate that the root cause of project failure is either poor communications or no link to strategy.
As I look at the list of why projects fail, I see that there are factors that are outside of the control of the project manager. If the organization changes their strategy and thus, the project no longer supports the new strategy, this is not in the control of the project manager. Or, if the organization demands that a methodology has to be used that is not appropriate for project, this is also outside of the control of the project manager. However, in my opinion, the majority of the reasons why projects fail are due to factors that the project manager can directly or indirectly impact.
What Can You Control?
The two main reasons why projects fail—poor communication and not being linked to strategy—may seem, on the surface, to be out of the control of the project manager. Project communications, I believe, has 3 parts to it:
- Method that is used for project communication. Is the communication done face-to-face, through conference calls, emails, or some other way?
- Content of the communications; what data or information is included in the communication. Is the content of the communication providing actionable information, or just data?
- Language of the communication; By this, I do not mean if the communication is written in English, French, Spanish, Chinese, or another language; rather, whether or not the communication is written in the language of the business, the language that the project sponsor and stakeholders understand.
As a project manager, you may be limited to the method of communication that is available to you, but you do control the content and the language of the communication. The project manager can determine if very technical data about the project is presented to stakeholders using project management terms or if actionable information is provided in the language of the project sponsor.
The second reason that projects fail is because they are not linked to strategy. In my experience, project managers do not generally concern themselves with the business of the organization. The project manager is focused on meeting the project objectives. The project manager is not asking the questions, “How is the product or service of the project contributing to the success of the organization? How is the project going to help the organization achieve its strategic objectives?” To answer these questions, a project manager must understand the language of the business, have some basic knowledge of how business works and how strategy is developed.
In looking at these two reasons for project failure, there are two common themes: project managers need to be able to speak the language of the business and understand the business of the organization.
PMI has recognized this with the introduction of The PMI Talent Triangle™ (Exhibit 1) that includes strategic and business management. The strategic and business management area contains understanding of the language of the business, organizational strategy, and the how the business works.
The balance of this paper will focus on organizational strategy and the business model canvas. Knowing how a project is linked to the organization's strategy is critical for the success of the project and for the project manager to be able to communicate the value of the project to the stakeholders. The business model canvas has nine building blocks to describe how the organization works. Knowing how the organization works gives the project manager the language to use to talk to stakeholders about the project and the importance of the project for the organization to be successful.
Link to Strategy
What is strategy? There are many definitions for strategy, but Raj Modi has one of the better ones.
“Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectation” (Modi, n.d.).
Typically, an organizational strategy has mission and vision statements describing the organization's long term goals, plus means of achieving the goals and strategic objectives, which provide the short-term direction. In my experience, most organizations have some sort of strategy and, in many cases, the vision and mission are posted on the organization's website. Whether the strategy is good or not is another question, but it exists.
This paper will focus on the more interesting question, how do organizations implement their strategy? The answer to that is: through projects and programs. In order for an organization to achieve their strategic objectives, the organization must change; they have to do things differently. Implementing change in an organization is done through projects and programs. This is the easy part. The hard part is to ensure that all projects are linked to strategy, which is the role of project portfolio management, and to ensure that the project manager is aware of the linkage between the project and the strategy.
Knowing how a project is linked to the strategy is important for the success of the project. Understanding the link to the organization's strategy gives the project manager the language to use to describe why the project is important to the organization when talking to the project sponsor and key stakeholders. When the project manager talks to the project sponsor about project issues and describes the impact in terms of the project objectives, the project sponsor might understand the importance. However, if the project manager is able to link the impact of the project issue to the organization's strategy, then there is a better chance of the project sponsor listening and helping to resolve the issue quickly, in order reduce the impact to the project objectives.
For example, let's explore a project that is implementing a new software application. The project needs a person with specialized skills who is not available when the project needs the skills. If the project manager explains the problem by showing that the project will be late or the impact on contingency, this may work. But, if the project manager can also explain how not having the skills will impact the organization's strategic objective, there is a better chance the project manager will get the attention of the project sponsor and be able to obtain the support needed to get the skills when required by the project. By just explaining the impact on the project, the project sponsor may or may not understand the impact on the organization's strategy. But, if the project manager can also explain the impact on the organization's strategy to the project sponsor, this will avoid having to rely on the project sponsor making the link on his/her own.
In an ideal world, the project charter should clearly describe the link between the product or service of the project and the strategy of the organization. In the charter, there should be a section that describes the justification for the project, which should describe how the product or service of the project supports the organization's strategy. In addition, the measurable objectives of the project and the success criteria that should also be in the project charter can show the link to organization's strategy. In my experience, the most commonly measured objectives for a project are on time, on budget, and on scope, which are hardly strategic. However, if we look at programs, then the success is focused on delivering business value. The business value that a program delivers should be linked to achieving strategic objectives.
But, in the real world, the project charter rarely contains a justification that is linked to strategy. In fact, it is lucky if there is any reference to the justification for the project and the measures of success. If this is the case, the project manager needs to do some work to figure out if there is a link between the project and the strategy. The first thing to do is to talk to the project sponsor to see if the sponsor knows what the link is between the project and the organization's strategy. If the project sponsor does not know, then the next thing to do is to look at the business case. Often the link can be found in the business or in the supporting documents for the business case. Another approach is to understand the personal objectives for the project sponsor. One of the approaches to implement organizational strategy is to ensure that an individual's objectives are aligned to the strategy. In the private sector, this tends to be done in the variable pay portion of an employee's compensation. Even if the objectives are not linked to strategy, if the project is closely aligned to the project sponsor's personal objectives, then that will help to ensure that the project will receive support from the project sponsor. The project sponsor's bonus could depend on it!
If the organization has a PMO, then checking with the PMO may yield the answer to how the project is linked to strategy. Often, PMOs are responsible for selecting projects through project portfolio management. The selection criteria for the projects should be linked to the organization's strategy. Finding the criteria that were used to select the project can point to the link to the organization's strategy.
Within program management, there is a focus on knowing the value the program is delivering and on ensuring that benefits are realized. If the project is part of a program or has specified benefits, then this can provide the link to the organization's strategy. The benefits of a program should be of value to the organization, which in turn, should be linked to implementing the organization's strategy. As well, understanding the benefits will provide the business language to talk about the program with the stakeholders.
If the link between the project and the organization's strategy cannot be determined, then there is a good chance the project will fail, as the project will not receive support when it is required to clear roadblocks or resolve issues. The senior management of an organization will focus on implementing strategy, which makes it hard to get the attention of senior management when you cannot demonstrate the link to strategy. Knowing the link between the project and the strategy will give you the language to use with senior management to describe the importance of the project. When you cannot find the link between the project and the organization's strategy, it may be a good time to suggest to the project sponsor that the value of the project and the link to strategy need to be identified, or another project manager needs to take on the project.
There may be some cases when the project is being done to implement regulatory requirements. In general, these projects are not linked to strategy, but since they are linked to regulatory changes, the project must be done. In this or similar cases, it is important to know why the regulatory change is important to your organization and why the regulation is required so you can use that language when communicating to project stakeholders.
Understanding the strategy of the organization and how the project is linked to the organization's strategy will provide you with the language to use to describe project issues in terms of the impact of achieving the strategy. In addition, the organization should be motivated to provide support to the project in order to have the project meet its objectives and goals.
Business Model Canvas
The Business Model Canvas was initially proposed by Alexander Osterwalder and formalized in his book, Business Model Generation (Osterwalder & Pigneur, 2010). The Canvas has grown in popularity as it has been adopted by the lean startup methodology that has been used by many incubators of startup companies.
The Business Model Canvas, as shown in Exhibit 2, consists of nine building blocks that show how a company intends to make and spend money. Describing the blocks for an organization will document how the strategy of the organization is implemented through organizational structures, processes, and systems.
When the project manager understands the business model of the organization, the project manager can use the business terminology that will resonate with project stakeholders. Since the business model provides a framework for the organization's processes and systems, the project will support one (or more) of the nine building blocks. Knowing the building block(s) the product or service of the project is impacting provides the context to talk to stakeholders about the project and the importance of the project to the business.
Here are the nine building blocks (Osterwalder & Pigneur, 2010):
- Customer segments: How are the customers or customer groups of the organization served?
- Value propositions(s): What is the problem the organization is trying to solve for the customers or what is the customer need the organization is trying to meet?
- Channels: What are means for delivering the value proposition to customers?
- Customer relationship: How are relationships established with customers and, more importantly, maintained with the customers?
- Revenue streams: What is the revenue stream from the value proposition when delivered to customers?
- Key resources: What are the key resources required to offer the value proposition to the customers? Resources is a general term that is often interpreted as just people, but can include equipment, material, and other non-financial resources such as a website.
- Key activities: What are the key activities that the key human resources will be doing?
- Key partnerships: What are the key partnerships that are required to support the organization; in particular, the organizations where the work has been outsourced?
- Cost structure: What are the costs of the resources, activities, and partnerships to deliver the value proposition to the customer?
I have used the terms revenue and business to discuss the business model canvas, which could imply the private sector. But the business model canvas can be used for all organizations—for profit, not for profit, public sector. No matter what the organization, they all need money to operate. Think of the revenue streams block as the source of money for the organization. For a for-profit organization, this will be selling products and services, and for a non-profit, it could be taxes, donations, or grants.
When the business model is completed, the revenue streams and cost structure blocks should be documented in monetary terms; and for any organization to be successful, the total of the revenue streams needs to be equal to or greater than the cost structure. If not, the organization will not be operating for very long.
When I created a company (ZOOMtoLearn) with a partner, we used the business model canvas to help us understand where we needed to focus our efforts. Unfortunately, the business was not successful and we had to close it down, but that is another story. Given that the company is no long operating, I can share the ZOOMtoLearn Business Model Canvas as an example in Exhibit 3.
One of the projects that ZOOMtoLearn had to do was to develop the software. As the project manager for the software development, knowing the business canvas for ZOOMtoLearn helps the project manager communicate with the project sponsor. For example, one of the requirements was to make the product available on smartphones and tablets. As a project manager, you know you could only deliver the software on a limited number of devices for the launch date. Without the business model, you would work out the cost for, say, Apple IOS, Android, Microsoft, and Blackberry. Then, present your recommendation based on the budget, timeline, and resource skills to the project sponsor. Speaking personally, the project sponsor in this case did not care about the timeline and resource skills; the project sponsor wants to meet the needs of the customer and generate sales. With the business model canvas, you can look at the customer segments and prioritize the devices that are most popular with the market segment or project management students and include this information in your recommendation. The project sponsor will be able to make a much better decision; not only does the project sponsor have the cost and time impact, the project sponsor has the impact on the customer segment to determine what is the best direction for ZOOMtoLearn.
The business model canvas is a simple way to document the business of the organization to help the project manager understand how the organization works. The project manager can then determine which block the project will impact and can explain the impact to the project sponsor and key stakeholders in the language of the business model.
Projects fail. There are a number of reasons why projects fail and two of the most common are poor communications and that the project is not linked to the strategy of the organization. When a project manager understands how the project supports the organization's strategy, then the project manager can use that knowledge to communicate to the project stakeholders using language that shows the importance of the project in achieving the organization's strategy. Talking about the value and benefits that the project is providing to the organization can do this.
The business model canvas is a way to document how the strategy of the organization is implemented through organizational structures, processes, and systems using nine building blocks. As a project manager, knowing the business model for the organization, and which block the project will impact, provides the context to discuss project issues in a way that relates to business and is understood by business leaders.
Being able to communicate to key stakeholders about the project by using the business model canvas and by showing how the project success will help the organization achieve its strategic objectives will allow the project manager to have more effective communications and improve the chances of project success.
If your project is failing, there is a good chance that it is your fault! As the project manager, you need to understand how the project supports the organization's strategy, and you need to learn the language of your organization. Otherwise, this results in poor communication and a higher chance that your project will fail.
The good news is you can easily improve your communications as a project manager to the project stakeholders by learning how your project is linked to the organization's strategy and by using the business model canvas to learn the language of the business. With this, you can talk to the stakeholders using the language of the organization and describe the value the project will deliver to the organization.