Failed Projects &

Reasons
DR. RISHABH RATHORE, ASSISTANT PROFESSOR
ICFAI BUSINESS SCHOOL
Challenger Space Shuttle

• The worst failure is one that results in the loss of life. When you’re dealing with highly complex
and dangerous projects like NASA, there’s always tremendous risk that needs to be tracked. On
January 28, 1986, that risk became a horrible reality as space shuttle Challenger exploded 73
seconds after launch.
• The cause was a leak in one of the two solid rocket boosters that set off the main liquid fuel tank.
The NASA investigation that followed said the failure was due to a faulty designed O-ring seal and
the cold weather at launch, which allowed for the leak.
• But it was not only a technical error that NASA discovered, but human error. NASA officials went
ahead with the launch even though engineers were concerned about the safety of the project. The
engineers noted the risk of the O-ring, but their communications never traveled up to managers
who could have delayed the launch to ensure the safety of the mission and its astronauts

The Lesson
Managers are only as well-informed as their team. If they’re not opening lines of communication to
access the data on the frontlines of a project, mistakes will be made, and in this case, fatal ones.
Computerized DMV

• Okay, no one loves the DMV. If they were a brand, their reputation would be more than tarnished, it
would be buried. But everyone who drives a vehicle is going to have some interaction with this
government agency. Unfortunately, they didn’t help their case in the 1990s when the states of California
and Washington attempted to computerize their Departments of Motor Vehicles.
• In California, the project began in 1987 as a five-year, $27 million plan to track its 31 million drivers’
licenses and 38 million vehicle registrations.
• Problems started at the beginning when the state solicited only one bid for the contract, Tandem
Computers, locking the state into buying their hardware.
• Then, to make things worse, tests showed that the new computers were even slower than the ones they
were to replace. But the state moved forward with the project until 1994, when it had to admit failure
and end the project. The San Francisco Chronicle reported that the project cost the state $49 million, and
a state audit found that the DMV violated contracting laws and regulations.

The Lesson
The problem here is a project that isn’t following regulations. All projects must go through a process of due
diligence, and legal and regulatory constraints must be part of that process. If the state had done that and
the contract bidding process invited more than one firm to the table, then a costly mess could have been
avoided, and our wait at the DMV might actually have become shorter.
New COKE
• After testing a new recipe on 200,000 subjects and finding that people preferred it over the
traditional version, Coca-Cola unveiled New Coke in 1985. Sounds like a safe move,
right? Wrong.
• Product loyalty and old-fashioned habit got in the way and people didn’t buy New Coke
as expected, costing the company $4 million in development and a loss of $30 million in
backstocked product it couldn’t sell and becoming one of the most famous failures in
history.

Lessons Learned:
While Coca-Cola certainly did market research, they missed the mark when it comes to
assessing customer motivations. Customer input is imperative in development and for your
project to be successful, you need to ensure you have a way to gather comprehensive
customer insight that gives accurate and realistic information.
AIRBUS A380
In 2004, Airbus set about piecing together parts of what they hoped would become the largest
passenger plane in the skies. Pieces were shipped from Toulouse to the assembly site in
Hamburg. As the pieces were moved closer together, it soon became clear that they didn’t fit.

Designers working on the parts of the plane had been using a different CAD programmes
which meant that the measurements were all different.

Even when working across borders and time zones, project management teaches us the
importance of keeping everyone on the same page. And this should start with defining the
programmes and systems to be used.
Berlin Brandenburg Airport
• Germany may be known for its efficiency, but the Berlin Brandenburg Airport has been anything
but. The Germans had hoped this airport would put Berlin on the map as a centre of commerce.
After 15 years of planning, construction started on the airport in 2006.

• The original opening date was supposed to be in 2011, but this date has come and gone. It is
now scheduled to be opened on 31st October 2020, in the middle of the global COVID-19
pandemic, the irony is certainly not lost on us!

• Many of the issues with the Berlin airport stem from having too many stakeholders with
conflicting visions. By allowing the common goal to become diluted, it has made it impossible to
progress as a normal rate. Ambition and scope creep are primarily to blame for the delays.

• However, it’s also worth noting that the 2007 economic downturn didn’t help. But when running
successful projects, it’s important to have a grasp on external factors and ensure these can’t derail
a project.
Knight Capital
Knight Capital was an American global financial services firm that used high-frequency
trading algorithms to trade securities. In August 2012, the company was responsible for a
major stock market disruption that cost the company $460m in just 45 minutes. After an
engineer failed to copy of a new script to one of the eight computer servers, the company
executed over 4 million trades in 154 stocks in the first 45 minutes of trading.

These errors were the result of a rushed deadline. The Knight Capital engineers were given
just a month to make changes to the software in order for it to work within a new trading
environment. In the rush, a test programme was allowed to go live that bought high and
sold low. Pushing the project back and ensuring the software was ready to be used in a live
environment could have saved the company.
Waterworld - Movie
When shooting started for the film Waterworld, the director didn’t yet hold a finalized script.
But this wasn’t the only problem to plague the shoot. The project was scheduled for 96 days
of shooting, but multiple rewrites led to multiple re-shoots and this time frame was stretched
out to 150 days. Making movies isn’t cheap, so this pushed production costs to $135 million
over budget.

Controlling the scope of a project is essential, but this can’t be done without a proper plan in
place. In the case of a movie, this means signing off the script before shooting can begin.
Denver International Airport
Denver International Airport set out to create the most sophisticated luggage handling
systems in the world. The project was soon deemed to be far more complex than anyone
was anticipating and delayed for 16 months at a cost of $560 m. Large portions of the
project had to be “redone” and the project was then scrapped in 2005.

This is a classic example of failing to understand the scope of the project. Ambition can
often cloud judgement, and the desire to create something that has never been done
before can lead people to push ahead with projects.
Target’s failed entry into Canada
When Target said they were expanding their retail outfit into Canada, 81% of Canadian
shoppers expressed interest in visiting them. It should have been a resounding success, but
it wasn’t. Less than 2 years later, Target’s Chairman and CEO announced they were
pulling out of Canada, closing all 133 stores.
Target misjudged the Canadian customer. Their stores did not feature the same low prices
as the US stores, there were serious supply and distribution problems, and they opened too
many stores too quickly.

Lesson Learned: the need for better planning of resources and supply, along with poor
management of stakeholder expectations.
Dyson Electric Car
Development of an electric car Project name: The Dyson Date: Oct 2019 Cost: £500M

Synopsis: The future of transportation is here to see and it is of course electric! As a result,
the development of electric cars has been a growth area for the past ten years and the pace
of change continues to grow.

Contributing factors: Lack of upfront due diligence (failure to analyse costs, market
competitive landscape, market size, production costs and profit margins). Underestimation
of costs. Perfectionism. Focal imbalance (focusing on the product rather than full spectrum
of work need to launch a car brand).
Great Western Mainline Electrification
UK Project type: Rail infrastructure upgrade Project name: Great Western Mainline
electrification project Date: Jan 2020 Cost: £2B cost overrun, plus reduced scope

Synopsis: The electrification of the world’s transportation infrastructure is a growing

focus in many countries. Electrification allows the energy intensive industry to move to
renewable sources of energy and helps contribute to climate action goals.

Contributing factors: Underestimation of complexity. Inadequate planning. Lack of due

diligence in estimating. Lack of appropriate Project Management controls, checks and
balances.
Why Projects Fail? PMI.org
Focus on business value, not technical detail. This involves establishing a clear link between the project and the
organizations key strategic practices. The project plan needs to cover the planned delivery, the business change
required and the means of benefits realization.

Establish clear accountability for measured results. There must be clear view of the interdependencies between
the projects, the benefits, and the criteria against which success will be judged. It is necessary to establish a
reasonably stable requirement baseline before any other work goes forward. Requirements may still continue to
creep. In virtually all projects there will be some degree of “learning what the requirements really are” while
building the project product.

Have consistent processes for managing unambiguous checkpoints. Successful large projects typically have
software measurement programs for capturing productivity and quality historical data that can be sued to compare
it against similar projects in order to judge the validity of schedules, costs, quality, and other project related factors.
The lack of effective quality centered mechanisms can be a major contributor to both cost and schedule overruns.

Have a consistent methodology for planning and executing projects. There should be a detailed plan developed
before any release date of a project is announced. Inadequate planning is one of the major reasons why projects
spin out of control.
Why Projects Fail? PMI.org
Include the customer at the beginning of the project and continually involve the customer as things change
so that the required adjustments can be made together. It has been observed that successful projects occur when
end users (customers) and the project members work as teams in the same cubicle, although this is not always
possible. Projects are less likely to fail if there are informed customers giving meaningful input during every phase
of requirements elicitation, product description and implementation. The customer needs to be asking, “how are the
project result used over time and what do I get out of the results?

Manage and motivate people so that project efforts will experience a zone of optimal performance
throughout its life. This involves managing and retaining the most highly skilled and productive people.
Knowledge is money. A project team made up of higher paid people with the right specialized skills is worth more
per dollar than a group of lower cost people who need weeks or months of training before they can start to be
productive.

Provide the project team members the tools and techniques the need to produce consistently successful
projects. The project team must be skilled and experienced with clear defined roles and responsibilities. If not,
there must be access to expertise which can benefit those fulfilling the requisite roles.
Assessment Process for Failing Projects: PMI.org

I. Define the assessment charter

II.Develop the assessment plan

III.Conduct the assessment

IV.Analyze data gathered; prepare findings

V.Report findings to stakeholders

Assessment Process for Failing Projects: PMI.org

Each assessment phase must complete before starting the next phase. There are several
key assessment concepts that need to be understood at this point (ESI, 2005):

•Assessment: formal examination of a project’s performance, metrics, issues, and

forecasted performance

•Recovery: save from loss; restore the project to usefulness; prevent total failure

•Focus of assessment: determining the current “real” condition of the project

•Result of assessment: determine changes needed in people, product, process or all of

these (ESI, 2005)
Assessment Process for Failing Projects: PMI.org

In addition to focusing on determining the current, real status of the project, the
assessment needs to thoroughly investigate project variables common to most
projects:

•Project work breakdown structure (WBS)

•Project risks (those in the risk log and risks known but not recorded)

•Project deliverable defects

•Project resources (human and other)

•Project schedule

•Project processes (both enterprise related and project-specific)