Why Projects Fail. Unlocking Value in the Project Economy

I recently listened to an HBR podcast titled “Why Project-Based Work Fails — and How to Get It Right,” which discussed the challenges and skills needed in today’s rapidly growing project economy. By 2027, project management roles will generate $20 trillion in economic activity and employ 88 million people, yet only 35% of projects succeed.

This statistic isn’t surprising. As businesses increasingly rely on project-based work to keep up with a fast-evolving world, a critical gap in execution skills, particularly at the leadership level, becomes evident. Without effective project execution, even the best strategies are worthless.

I was listening to an HBR podcast this week called ‘Why Project-Based Work Fails — and How to Get It Right’.

Some key points of interest for me were:

By 2027, the ‘project economy’ is set to generate $20 trillion in economic activity
It’ll employ 88 million people in project management roles
Yet, only 35% of projects actually succeed

It’s not really surprising. From startups to multinational corporations, across every industry you can think of, work is increasingly project-based. It’s a response to a world that’s evolving quickly and becoming more complex by the day. Companies just can’t afford to stay static for years on end anymore.

But, despite this projectisation boom, there is a notable lack of execution skills across organisations I’ve worked with, particularly at the leadership level.

If you’re a leader, and you can’t execute projects effectively, your strategy is worthless.

So, what skills do leaders need to cultivate to drive successful project outcomes?

Start with the problem, not the solution

I learned this one the hard way. Early in my career, I sat in a steering group where one leader kept asking, “What problem are we trying to solve here?” I didn’t get it. My sponsor didn’t get it. We were too busy crafting a beautiful solution to a problem that… well, wasn’t really a problem.

Fast forward 10 years and countless projects later, and I finally see the light. Here’s what I’ve learned:

Sponsors need to invest time in deeply understanding the problem.
If you can’t do that or if the problem is very complex, budget for a solid discovery phase.

Here are some challenges you might face:

Challenge: Your organisation is obsessed with ‘locked in’ annual plans.
Response: Push for outcomes-based tracking. Who cares if you’re on schedule if you’re building the wrong thing?

Challenge: You’re a consultant, and the client wants solutions and benefits up-front.
Response: Sell them on a fixed-fee discovery phase. Give them an indicative budget for follow-on work to close the deal.

Pro tip: There are lots of great tools and methodologies to help with understanding a problem.

Try Double Diamond, 5 Why’s, or a Customer Empathy Map. And if you’re delivering internal improvement, treat your internal stakeholders like customers!

Take sponsorship seriously

Nieto-Rodriguez nailed it in the podcast: there’s a massive leadership gap in project sponsorship. Too many leaders lack the skills or dedication to sponsor projects effectively.

Want to dramatically improve your project’s chances? Dedicate half a day a week to it. Sounds simple, right? But it’s amazing how many leaders can’t (or won’t) do this.

Here are some common challenges:

Challenge: You’re handed a project you don’t believe in.
Response: Speak up! Challenge it. A project without a committed sponsor is destined for failure, likely taking the team morale down with it.

Challenge: You don’t know what good sponsorship looks like.
Response: Invest in yourself. Focus on a few key skills like effective commissioning, championing, and risk management.

Challenge: Too many projects, not enough time.
Response: Learn to say ‘no’. Focus on a few key initiatives that align with your strategy. Advocate for this when business planning!

Need help focusing on what really matters? Check out the Hoshin Kanri or Balanced Scorecard.

Other tips

The other key points are:

Obsess over outcomes, not outputs. Who cares if you’re on time and budget if you’re not delivering real value?
Ditch the one-size-fits-all approach. Forcing every project into an Agile (or waterfall) is a recipe for disaster.
Build teams based on passion, not obligation. Enthusiasm beats reluctant participation every time.
Projects are everywhere – don’t reinvent the wheel. Learn from other projects, other disciplines, and other organisations.

The bottom line

In today’s project economy, project skills aren’t just for project managers. They’re essential for anyone looking to drive change and deliver value in their organisation.

So, whether you’re a C-suite exec or an ambitious newcomer, it’s time to up your project game. And if you need some tools to help you along the way, check out our toolkit.