Why Projects Fail and How PMOs Can Prevent This (Many Practical Tips)


As a PMO, you know the question: why do projects fail every now and then? Some projects are even expected to fail from the beginning, and this is taken into account. With other projects, failure is painful. For yet others, failure may even be fatal to the company.

What leads to project failure, and which causes can be influenced positively by the Project Management Office (PMO)? In this article, we explain some of the key factors that will help you avoid project failure and / or analyze a particular project failure. You will learn more about:

Halted, Terminated, Completed = Failed?

If you are member of a PMO (project management office), you have surely given some thought to the topic of “failure”. However, have you clearly defined what exactly constitutes a failure?

In our experience, how people define a failure can vary greatly. The definition can differ from project to project. So, let us take a closer look at three examples.

Special Download: 10 Vital PMO Success Factors (PDF file)

Please fill in the form.
* Required Fields  |  Data Protection

This form is blocked by your cookie settings to our website. Please click here and select at least the marketing cookies. Then this form will be visible. Thanks a lot.

Example 1: Halting a project is not the same as terminating it

Failure has a negative connotation and gives the impression that something has gone wrong. In reality, there are some projects in which some degree of failure is expected. This is the case in, for example, some research-intensive industries.

Here, projects are sometimes launched with the intention to continue them only as long as is practical. Such projects are discontinued as soon as there is no longer any realistic prospect of success.

In essence, success would have been a “great result” but not necessarily assumed. However, this assumption should be made clear at the outset.

Example: Think of all the pharmaceutical materials developed that never make it to market as a medical product. Sometimes they do not receive regulatory approval. Or the development lead time overshadows the patent’s lifetime. Maybe only one in five projects is actually successful. Given this scenario, you could say that failure is quite normal in this industry.

Special Download: How to setup a PMO in 4 simple steps (PDF file)

Please fill in the form.
* Required Fields  |  Data Protection

This form is blocked by your cookie settings to our website. Please click here and select at least the marketing cookies. Then this form will be visible. Thanks a lot.

Example 2: A terminated project is a failed one

Whether or not a terminated project is a failed project is open to debate as it depends on your definition of failure. The two terms are often used interchangeably.

Many companies have specific criteria that determine when a project will be terminated. One criterion might be:

“If it becomes apparent during the project that a critical goal will not be met despite everyone’s best efforts to reach it, such projects should be classed as failed.”

Example: A software project involving the introduction of a new system: after selecting a vendor, the company determines during the course of the project that this vendor is unable to deliver the desired functional environment within the required time frame or at the agreed-upon price. So, the company terminates the project. Then, it finds another vendor with whom it tries a new strategy for implementing the desired system.

The company clearly expected the project to succeed. In contrast to the research efforts in the case above, success was not just a hope, but rather an expectation. For this scenario, terminating the project clearly is a failure.

Example 3: Completed projects are not necessarily successful ones

Projects can be completed successfully but still be deemed a failure. Let us consider these two examples:

Scenario 1: A development project produces a result that meets all the requirements with regard to features and functions. However, the users reject it and do not buy or use it. So, the question is, was the project a failure? Was the order to deliver this result at fault? You could say that it depends on the following:

  • Was defining the requirements part of the project?
  • Did the project just involve implementing a set of predefined specifications?

Scenario 2: A product development project has achieved all the objectives, but there are production problems with the product. In the end, the entire product is considered a failure, including the perfectly executed development project.

Our tip: Define exactly what factors will be considered and what constitutes a failure. How bad must a project be before it is considered a failure? What happens when the project is deemed a failure? Is a project considered successful if the work is completed on time and within budget, but the resulting product is unusable?

Project Failure – Possible Definitions

1) The project goals were not met

If only the project itself is considered, you could define failure as failing to meet one or more of the project’s objectives, or not sufficiently meeting these objectives. Common examples of this are:

  • Exceeding the project’s budget
  • Overdue deliveries
  • Quality specifications are not met

If the result is accepted and used despite these shortcomings, the problem could be that it was delivered too late and was too expensive. However, the result is great and enjoys widespread acceptance.

In the end, however, the project manager failed because the cost and delivery targets were not met.

If the resulting rewards are reaped within the project manager’s own company, these shortcomings will probably be more tolerated than if the rewards benefit another company.

2) Subjectively perceived failure

Projects are often deemed a failure simply because it feels as though they did not produce the expected success. When stakeholder expectations are not met, it is often because:

  • The stakeholders and / or their expectations weren’t known.
  • The stakeholders were not sufficiently informed.
  • There were no clear guidelines for distinguishing between success and failure.

All these problems can be avoided by having clear guidelines and having the PMO actively communicate with those involved.

Our tip: Together with your PMO, ensure that key information on projects reaches the right people in a form understandable to all. This helps avoid misunderstandings and minimizes grapevine news.

When Projects Fail – Reasons and Actions for the PMO

A project can fail for reasons within and beyond someone’s control.

External Causes of Project Failure

External Measures

  • Define guidelines and standards, and ensure an optimum environment
  • Ensure that those involved have the proper education, training and support
  • Provide the project manager with lessons learned from other projects
  • Check to see whether the risk prevention measures make sense

External actions with which you, as the PMO, can minimize the chances of a project failing

You can analyze and assess the external factors with a lot of experience and with the aid of stakeholder management and risk management.

It is important to remember that:

  • It is the project manager’s duty to monitor the progress and adopt countermeasures as needed. This should be done continuously during the project.
  • The PMO is only involved indirectly, as it normally has no direct contact with the project’s external stakeholders.
  • The PMO is therefore not expected to (and may not even be able to) have a direct influence in these matters.

Reading tip: PMO functions, which are typical and how important are they?

Practical Tips for the PMO

As the PMO, however, you certainly have an indirect and effective influence on the project’s success.

  • Define the guidelines and standards in such a way as to provide the project managers with an environment conducive to success, and ensure that they have the necessary education, training and support.
  • Provide project managers with experience from other projects. Check to ensure that, for example, the stakeholder and risk assessments sufficiently take into account the lessons learned from other projects.
  • Check to see whether the planned risk prevention measures make sense and are appropriate.

It is impossible to predict exactly what new requirements a client may request. You can, however, learn from previous experience and use this knowledge to develop some general guidelines for dealing with these uncertainties. Having this knowledge is definitely better than being caught unprepared.

Simply being able to react more quickly to problems previously judged as risks may give you the head start necessary to prevent anything worse from happening.

Special Download (PDF): What are typical PMO Functions? (+ their importance)

This article provides you with a good comparison as well as ideas for functions you could consider next for your PMO. Please fill in the form to download.
* Required Fields  |  Data Protection

This form is blocked by your cookie settings to our website. Please click here and select at least the marketing cookies. Then this form will be visible. Thanks a lot.

Internal Causes of Failure

Internal Measures

  • Ensure that the following have been clearly defined:
    – Project orders
    – Criteria for terminating a project
    – Project success
  • Develop an early warning system
    – Use traffic light symbols to measure time, effort, costs and risks
    – Have a manual traffic light symbol to indicate the project’s overall status
    – Create a “Needs action” status
  • Monitor and support the project managers
    – Provide processes, methods and tools
    – Support / monitor the project managers

What internal steps you, as the PMO, can take to minimize the risk of project failure

Always conduct an internal stakeholder and risk analysis, if possible, because even internal issues can pose risks and should therefore also be considered.

However, different countermeasures are required when dealing with internal issues. These can also relate to the PMO’s role itself. Here, there are many actions you can take to help reduce or eliminate the root causes of failure through careful planning.

Download now: Free eBook (PDF) on “The PPM Paradise”

Here is what an optimal customizable solution for project, portfolio and resource management (PPM) should be capable of – tips and important arguments for your decision-makers. > Download eBook (PDF) “The PPM Paradise”

Start by developing objective criteria for evaluation

It is essential to clearly define:

  • Project orders
  • Project conditions that trigger an early warning
  • Criteria for terminating a project
  • What constitutes project success

These are all issues to which you can develop solutions in the PMO. When you have the solutions ready, make them available to the project managers and other stakeholders.

Clarifying these issues by providing solutions to them gives you a foundation based on objective criteria. Whether or not a project can be deemed a success will then no longer be based on subjective assessments.

Of course, there will always be people who want to use internal political pressure to interpret the project results in one way or another for their own benefit. The preparatory work you did beforehand, however, gives you the power to positively influence the rumor mill.

Our tip: Make sure you have a framework of objective criteria to make any decisions as to whether or not a project has failed comprehensible.

During the Projects: Monitor and Support the Project Managers

Providing processes, methods and tools fulfills the prerequisites needed to optimize the chances of success.

During the project, it is the PMO’s responsibility to help the project managers comply with the established guidelines and ensure that they do so.

Reading tip: Project Termination – Establish a Culture of Successful Failure

There are various methods for establishing an early warning system. Having an early warning system helps you detect problems in a timely manner and helps the project managers implement countermeasures to resolve any problems. However, this only works if you, as the PMO, continually work to keep the system running.

Our tip: It is important to monitor all the projects to ensure that they comply with the established guidelines. It is also important to provide the support needed to help the project managers accomplish this as efficiently as possible. Establish an early warning system and keep it going to enable you to counteract trends in good time.

Results of the PMO Survey 2020: Causes of Project Failure

In our PMO Survey 2020, we surveyed companies having a PMO and those without one. The results of the study were divided into two parts, which are separately available: Part 1 = Companies with PMO, Part 2 = Companies without PMO.

The question “What factors prevented your PMO from successfully completing a project?” was designed to solicit more detailed information. Answers were provided for this multiple-choice question and it was also possible for the respondent to add their own answer.

It turns out that unclear scope and unclear objectives are by far the main causes of project failure. This is followed in equal parts by underestimated effort, too few employees, and a lack of support from the stakeholders.

Reasons for unsuccessful projects pmo study 2020
(Source: PMO Survey 2020)

Lack of expertise on the part of project managers was cited more often than insufficient employee qualifications. Further training could quickly fix this problem.

For 10% of the participants, some projects were “destined to fail from the start”, but a strong PMO could certainly have helped to correct things.

Key Success Factors for Fewer Failing Projects

In the following section, we will discuss a few success factors to enable you, as the PMO, to reduce the likelihood of failing projects.

5 Success Factors

  • Choose the right projects
  • Have a clearly defined project order
  • Provide support for dealing with changes
  • Detect problems early
  • Create a corporate culture for dealing with terminated projects

Five key factors for avoiding project failure

1) Choose the right projects

Start by only initiating projects with the necessary importance.

Avoid giving priority to someone’s pet project if this would waste resources that could be used for a more important project. Steer clear of a scenario where problems occur in unimportant projects which lead to project termination. This helps you avoid this type of failure at an early stage.

Priorities can naturally change, resulting in some projects being halted if necessary. These should not be considered failures. however, and the same applies to projects that are intentionally halted because a strategy shift has led to a change in priorities.

The key is to properly communicate and justify these decisions. These two vital aspects should not be underestimated or overlooked. Doing so would give the impression that the project failed or was unintentionally terminated, and that could harm the reputations of those involved.

Our tip: As the PMO, you may be able to act by focusing on corporate strategy when prioritizing projects. Only launch projects that are important enough to be rescued from a difficult situation if necessary. Also, only initiate projects whose results are vitally needed, not the pet projects of a handful of people. This will save resources

2) Have a clearly defined project order

The PMO is generally responsible for developing the project management standards, and the project order is one of the most important of these.

In many cases, it simply does not exist. Other times, the project order does not contain the information needed by the project manager to successfully execute the project.

The project order should clearly define the project’s goals, which can be measurable objectives or soft issues.

Our tip: Ensure that the project sponsor provides the project manager with a clearly defined project order. Make sure you know who, internally, requested the project (project sponsor) and who is responsible for delivering the results (project manager). Define the goals as specifically as possible, ideally using measurable criteria. Be specific about anything that is not among the project’s goals.

Example: You hope that a project will earn you subsequent orders from the client, so you acquiesce when the client subsequently makes additional demands. The percentage of order volume or exact figures should be specified in this case. Otherwise, the project manager must ask each time such a request is made to find out just how much leeway is possible. Or find out later that their decision was wrong because:

  • They conceded too much, yet still did not gain any subsequent orders.
  • Or maybe there were subsequent orders, but they conceded too much to gain those orders.

In essence, the orders were gained, but at a loss, or maybe the project was terminated because too much was conceded too early.

With external orders, the internally-defined times and expenses do not necessarily have to match the values communicated externally. Depending on the situation, the internal values can be higher or lower than the external ones.

Our tip: The project order should also specify an internal budget for time and expenses, ideally including profit and benefit. The project manager must know which factors will be used to judge their performance. Ideally, all project orders should be checked for completeness, clarity and measurability by the PMO before signing.

3) Provide support when dealing with changes to a project

Every project is, at some point, subject to planned or unplanned changes. These can be requested by the client, due to external influences, or sometimes simply technical considerations.

These are not necessarily disruptions, as they can also be opportunities.

What is important is that you, as the PMO, train the project managers in dealing with these changes and provide support if necessary.

The epitome of a good project manager is one who can handle changes successfully.

Changes can result in great amendments that can turn a modest business project into a more profitable one. Some amendments are never requested because someone wants to be helpful or show strength. In the end, there is often no thanks – or even recognition – from the recipient.

Our tip: Incorrectly assessed or wrongly negotiated changes unfortunately often lead to project failure. The art of successful project management lies in turning changes into opportunities. To achieve this, project managers must deal correctly with any changes facing the project. This depends heavily on the project management training specific to that particular company – which tends to be the responsibility of the PMO.

4) Detect problems early

To prevent failure, you must continually monitor projects from a PMO perspective. This is the only way to ensure the project manager will take countermeasures and decision-makers will promote an important project in difficulty.

To accomplish this, create a system for reporting in project management that enables you to detect any problems in a timely manner.

Such a reporting system involves more than just a “code red” symbol that is displayed once the project is heading downhill to failure. Many parameters (together or individually) are needed to identify situations in which the project manager needs some assistance.

However, avoid giving the impression that the project managers are constantly being monitored.

It is better for the PMO to develop an atmosphere of trust. In its context, project managers must be supported and encouraged, when the project seems to be going off track – rather than blamed and shamed.

A traffic light symbol is generally used to indicate when time, costs and / or risks have exceeded a given threshold.

We also advise you to include a traffic light symbol that you can manually set to indicate the project’s overall status in the status report. Project managers are individuals and differ as to their experience in dealing with problems.

We also recommend having a “Needs Action” status that the project manager can set. This enables them to draw attention to their project before its status becomes a “code red”. This alerts the PMO that:

  • Decisions need to be made.
  • Resources needed later have not yet been allocated.
  • There are other issues that can, at this point, still be handled with simple organizational solutions.

As the PMO, you are responsible for ensuring that the status reports are up to date, accurate and plausible.

You probably will not have the time to check each project every month, so it is important that you carefully choose which projects need extra scrutiny.

Our tip: If the difficulties are detected early enough, the PMO has a greater chance of fixing the problems and avoiding project failure. Make sure you have a reporting system allowing you to identify early when you need to step in as the PMO. We recommend that you focus not only on those projects labeled “code red” or “code yellow”, but also those that are “code green”. Doing so will help you detect projects that have unjustifiably been kept as “code green” for too long just to avoid drawing attention to their problems.

5) Create a corporate culture for dealing with terminated projects

Ideally, you have established criteria in the PMO to facilitate the decision for a project termination. In reality, however, the decision is easy for some types of projects and very difficult, if not impossible, for others.

If a project has great importance for the company, this might be one reason why it is not terminated despite fulfilling the criteria for doing so. There will always be exceptions.

The same rule of thumb applies to criteria for terminating a project as to the criteria for initiating a project – easy to define criteria should be set down.

Our tip: Do not waste time creating an exhaustive set of rules. Your time is better spent monitoring the projects and asking questions to learn more about specific problems. Through careful communication, the PMO can have a major influence in helping to establish a corporate culture in which projects that are justifiably terminated early enough are not viewed as a project manager’s failure. In fact, the conclusion of these projects may come to be seen as necessary and ultimately meaningful.

Conclusion – Why Projects Fail

You now know about the importance of correctly defining the word “failure” as it relates to projects. Define measurable criteria for this in the PMO.

You now also understand the primary internal and external causes of project failure. We have explained such things as the importance of project prioritization and how to effectively use a reliable system for detecting problems early.

You are also familiar with a PMO’s duties and responsibilities regarding a clearly defined project order, the correct way to deal with changes that occur during the project, and the importance of having a corporate culture for dealing with project failures.

Paying attention to the practical tips and success factors for projects outlined in this article should help you greatly minimize the risk of a project failing.

Our final tips:

Get to know the individually adaptable “PPM Paradise” – the optimal environment for your enterprise-wide project, program, portfolio and resource management (PPM). Download the free eBook “The PPM Paradise” now (just click, no form).

And sign up for our bi-weekly blog newsletter with information on more hands-on articles, eBooks, etc. to improve your project management maturity level.

What is your opinion on the reasons why projects fail? Let us know in the comment field shown below. We look forward to hearing from you.

Subscribe to TPG BlogInfo: Never miss new practice-oriented tips & tricks

Every other week: Receive practical tips in TPG blog posts written by recognized experts in project, portfolio, and resource management.
* Required Fields  |  Data Protection

This form is blocked by your cookie settings to our website. Please click here and select at least the marketing cookies. Then this form will be visible. Thanks a lot.

Johann Strasser
Managing Partner at TPG The Project Group

The certified engineer has been a managing partner at TPG The Project Group since 2001. After many years as a development engineer in the automotive and energy sectors, Johann Strasser spent a decade as an independent trainer and consultant in the field of project management. During his tenure, he also served as project manager for software projects in the construction industry and provided scheduling and cost management support for large-scale construction projects. At TPG, he applies his expertise in product development and consulting services for international clients. His special focus is on PMO, project portfolios, hybrid project management, and resource management. For many years now, he has shared his knowledge through presentations, seminars, articles, and webinars.

Read more about Johann Strasser on LinkedIn and XING.

Achim Schmidt-Sibeth
Senior Marketing Manager

After earning his engineering degree in environmental technology, he gained many years of experience in project management through his work at an engineering office, an equipment manufacturer, and a multimedia agency. Achim Schmidt-Sibeth and his team have been responsible for marketing and communication at TPG The Project Group for many years now.

Read more about Achim Schmidt-Sibeth on LinkedIn or XING

print this article



  1. Gerald Prieur on

    These are useful tips for our government environment that has multiple small projects but does not have an established PMO.

Leave A Reply