I am currently researching failures for my up coming book FAST Leadership, and as part of this I have found some unbelievable examples, and statistics on failures that I thought it would be good to share.
Based on multiple reviews of IT Projects by various groups such as McKinsey, Oxford University, KPMG, Guardian Newspaper and the US Government Accountability, amongst others, and reviewing over 7000 projects and speaking with over 3000 respondents these were some of the findings.
- 17% of large IT projects (over $15m budget) go so badly wrong that they threaten the existence of the company
- 60% of projects fail to meet Quality, Cost and Time requirements
- 35% of companies abandoned projects, of projects not abandoned 37% failed to deliver the planned benefits.
- 49% of projects fail either due to poor planning, or poor execution
- 70% of UK Government IT projects failed 2000-2008, wasting $4b
- 70% of one survey respondents said they knew the project would fail before they had even started
It’s not just IT projects that fail, according to Bloomberg research,
8 out of 10 entrepreneurs starting a new business fail within the first 18 months.
Thats right 80% crash and burn!!!
There have also been some spectacular failure, and below I have included top 5 my favourites.
1. US Army Universal Camouflage Pattern. Cost $5billion.
The US Army looked to create a single camouflage uniform which would work in all environments.
The project was cancelled after and estimated $5billion expenditure, when it was found that the uniform made troops easier to see rather than harder to see in most terrains.
Unsubstantiated reports in the press indicate that some key decisions were overly influenced by a desire to have uniforms that were more “cool” than the US Marines.
2. US Navy Marine One Project. Cost $13billion
After 9/11 it was decided to upgrade the helicopter fleet that would look to protect the US president and other VIPs as the current fleet was unsuitable to the task.
The initial estimate was $6.5billion, but the project was put on hold and then cancelled after spending $13billion.
One of the reasons for failure was stated as underestimation of complexity. However I would argue that this comes as no surprise as the initial $6.5billion project was awarded to Lockheed Martin who reportedly no prior experience of developing a helicopter. D’oh!
3. NHS Care Record Service. Cost $24billion.
The NHS was looking to change how patient information is stored and shared in England, to provide better care for patients.
The project was 4 years late, the costs had spiralled from an initial estimate of $4billion to an astronomical $24billion, it had problems during pilot trials and was and then abounded in 2010.
There are some estimates that the eventual costs could even increase to $40billion!!!
One of the reasons stated was the scope and costs was underestimated. Also it was seen as an IT project, rather than a cultural change program.
4. JC Penny Nationwide Merchandising Pricing Strategy. Cost $1billion
JC Penny changed CEOs after poor performance, and brought in a Senior Executive from Apple. The new management decided to change the pricing models for products, previously products were discounted and had a lot of coupon sales, which was thought to be eating away at products. A decision was made to remove discounts and coupons and have more standardised pricing.
This had an immediate impact, with revenues dropping by 28% with a cost of $1billon!.
Part of the reason for failure was attributed to not understanding of how JC Penny customers shopped.
5. Mitt Romney Political Campaign Operational Management system.
Cost unknown, but I suspect the presidency??
The system was designed to help manage the logistics of their election day “get out the vote” push, both the Obama and Romney campaigns developed “operational management” systems that would provide real time tracking of voter turnout in the key battleground states. This would then allow them to best deploy the resources to help get the votes needed to win the election.
The problem was the system hadn’t been tested fully and it couldn’t handle the peak load, which resulted in much of the work being done manually.
Whats interesting here is that the system is only used on one day, election day, and they knew how many voters they were looking to manage, so its hard to believe that they couldn’t manage this.
I guess it’s good that a team that couldn’t organise something as predictable as election day volumes weren’t given the opportunity to run something as complex as the US Government.
When you look at these failures, it’s hard to believe that many of them couldn’t be avoided:
- Most young boys, who had toy solders, could have told you that that it would be next to impossible to have one uniform that would work in the jungle, desert or arctic conditions.
- How many of us would award a $6.5billion contract to someone with no experience of the work involved.
- There is no peak usage for a system that will be used on one day, election day, there is only standard usage.
Given that over 50% of all projects fail, whenever you take on a project you have a high risk failure.
However, I firmly believe that we can reduce our failure rate, we just need to ensure that we are set up correctly in order to increase our probability of success, and by using FAST Leadership approach, this will help you achieve that.
So keep an eye our for more details on FAST and my new book which should be available later in the year!
You can find more information on failure on Why Projects Fail.