Projects seldom, if ever, run according to plan. Project failures are a sad but true part of reality, but good news is that they are lessons that provide valuable experience and knowledge. It’s often said that each project is individual, so its risks are individual too. But taking a closer look at typical reasons of project failures helps recognize vulnerabilities at an early stage and prevent similar situations.
Here’s where the stories of big and ambitious project failures are of help. Being carefully studied and researched in detail, they have turned into valuable lessons for any project manager. Here’s a list of the most notorious project failures and lessons that we can learn from them.
1. Edsel by Ford
It started as an ambitious project: a brand new car, an enormous investment, and ads promising an irresistible product. Special production facilities were built, a teaser campaign was run one year before the launch, and the car was named after Henry Ford’s son. Dealerships were persuaded to preorder the cars before Edsel was ready. The executives seemed to never consider a failure to be an option.
And they ended up having an enormous number of unsold cars.
Ford started developing the vehicle based on an extensive market research: data polled from potential buyers were intended to help creators make the perfect car. However, the execs just pretended to be acting on the basis of what the polls said, in fact disregarding the most part of the collected information. What’s more, by the time the car was presented, the market already shifted to buying cheaper and more compact cars – and Edsel was expensive.
Henry Ford considered failures as opportunities to learn important lessons, and the result of the Edsel project showed how he put this principle into action: new compact car models were developed, and production facilities built for Edsel were used for manufacturing them.
Lessons learned: Always keep in mind that failures are possible, and have a plan for that case. And, if you have research data at hand, analyze and use it to avoid missing market opportunities.
2. DeLorean DMC-12
Introduced by John DeLorean, the famous auto executive who made iconic cars, this “Back to the Future” vehicle seemed to be doomed to success. Who would believe it would end up turning into one of the most memorable failures in the automotive industry?
DeLorean company and its only car project faced multiple problems already at the early stages. Chances of success were extremely low: 1 in 10, as the company’s consultants predicted. New production facilities, new and unqualified workforce, low engine performance and unrealistically high price tag due to poor planning. John DeLorean’s arrest on drug trafficking charges added to the company’s problems, and even though the jury acquitted him soon, it was too late.
Wrong timing was another aspect: the car came out during a recession. Not a good time to sell cars like this: with its two seats, it was not designed as a primary family car – more a luxury vehicle. So its purchase could be postponed – and many opted for that. So, eventually, the car couldn’t live to the hype it created.
Lessons learned: careful planning of all technical aspects, including workforce qualification, quality management process and product’s performance, is crucial for project’s success. Right timing is also something that can and needs to be planned.
3. Microsoft Zune
As digital media players became popular in early 2000s, Apple took over this market with its iPod. Microsoft, being not able to just accept the defeat, released their own portable player called Zune. And while the device itself wasn’t bad, too high price and Windows-only compatibility were not exactly what could attract potential shoppers.
What’s most important here, Microsoft Zune was a product made to chase the competitor, and it didn’t have strong competitive features. This resulted in flat sales and low demand. Not surprisingly, the product was discontinued several years after the release.
Lessons learned: chasing competitors is rarely a good strategy to win – so in most cases, it’s wiser to admit the defeat and focus on other market segments where you can win ground.
4. Virtual Case File
Modernizing outdated infrastructures is usually more complex than creating new ones from scratch, so modernization projects are one of the most challenging ones. For example, Virtual Case File (VCF) that intended to update the FBI’s obsolete IT infrastructure. Started in 2000, it consumed $170 million and was eventually abandoned in 2005. FBI made some progress in updating its IT infrastructure by purchasing more robust machines and deploying secure networks, but the initial goals were not achieved.
VCF is a classic example of a system failure in IT projects: it suffered from virtually all failures possible in software development: scope creep, specification changes, code bloat, micromanagement, and others. The scale of the resulting failure proves the importance of using project management methodologies and careful planning and monitoring of the project progress.
Lessons learned: the failure of this project shows how important it is to strictly follow specific methodology and thoroughly plan all project steps in advance.
5. Apple Lisa
An example how a product that featured a brand new and promising technology failed. Apple Lisa was the first desktop computer with a mouse that experts recognized as one of the most important developments in this market segment. This technology ended up taking over the market, but the Lisa itself failed. Why?
The reason is too low performance at a too high cost. People were interested in machines with a price tag lower than $9,995 that Apple offered, preferring the more affordable IBM PC. Apple generously invested in ads, but they failed to convince potential buyers. Instead, this created another problem: the ads promised much more than the product actually was, which didn’t help overcome people’s reluctance to purchase Apple Lisa.
Lessons learned: maintaining an attractive price-performance ratio of the product is vital. The same applies to transparency about the product’s features and capabilities – ads should never overpromise or create inflated expectations.
6. New Coke
When losing ground to a competitor, it’s tempting to adjust your product to the competitor’s. However, in reality, this doesn’t always work out. By 1985, Coca-Cola had been losing market share to other soft drinks and decided to adjust the formula to taste more like the rival Pepsi’s. The decision was based on blind taste tests.
The ads stated that “the best just got better”, but the buyers didn’t seem to appreciate the new Coca-Cola’s formula. People didn’t buy the new product as expected. Instead, the sales of the “Coca-Cola Classic”, as the old formula was rebranded, significantly grew, and Coca-Cola went back to the traditional formula.
Lessons learned: adjusting an overall successful product can only do more harm – so don’t forget about the old principle: if it works, don’t fix it.
7. Crystal Pepsi
Manufacturers of “unhealthy” food often yield to healthy food trends. So did PepsiCo in 1992, when they released the “clear” version of their famous beverage, Crystal Pepsi. Ads claimed that the new Pepsi was healthier than the traditional brown soda. It turned out soon that people weren’t interested in the “clear alternative” because they didn’t like its taste.
Bottlers warned the COO, David C. Novak, that the new product didn’t taste like Pepsi and therefore was not likely to be accepted by buyers. He never listened to them, only to find out that the issues they were bringing up were vital for the product.
Lessons learned: listen to people who are bringing up issues. David Novak admitted in 2007 that he had learned this lesson: as tempting as it is for a leader to fall into the “they don’t get it” trap, listening to people around you helps detect and prevent major issues.
8. Segway Personal Transporter
A combination of a brilliant idea and a new technology. Isn’t it a great market opportunity? The answer is, not necessarily. For example, Segway transporter turned into a flop: designed as the next generation transport, it faded away very soon after its introduction in 2001.
A piece of innovative technology protected by patents, an energy-saving device, and a lifestyle product: Segway’s features met trends and were sufficient for success. Why did it flop? Retrospectively, major flaws became visible.
First and the most important, the distribution. Sales via Amazon eliminated a reliable customer interaction point, so needed for a complex technology device. Then, the expectations. The product was overhyped: customers expected more features for that price. Another problem was the lack of feedback: the product was kept under wraps until the launch, so there were no feedback-based iterative improvements. And, finally, wrong target market: postal workers who needed both hands to be free, and security employees who preferred vehicles without range limitations.
Lessons learned: for many products, marketing is no less important than product features themselves. And, speaking of features, feedback and transparency help create right expectations and make the product viable.
9. Berlin Brandenburg Airport
The last but not the least project failure is the third Berlin’s airport project. A systematic project failure that involves scope creep, lack of qualified change management, colliding stakeholders’ interests, from poor to no communication at all turned the ambitious project into a classic failure example. And, surprising for everyone, this happened in Germany, known for its efficient planning.
However, Berlin Brandenburg Airport’s problems have not been limited to just poor planning and management. Political obstacles and bureaucracy, corruption allegations and several legal issues have added to the resulting mess. Today, after having consumed reportedly over $7 billion, the airport is still not opened – eight years after the initially planned date.
Lessons learned: when managing large and ambitious projects, thorough attention to every aspect is vital. Managing stakeholders’ interests, preventing scope creep and ensuring clear and active communication are of the most importance here.
Summary
“If a project works for the first time, it was in your nightly dreams”, – Cornelius Fitchner said. Running a project without any challenges is hardly possible, so being aware of potential bottlenecks, risks and vulnerabilities is vital for any manager. This helps to identify and prevent possible issues at the early steps.
Having the full picture at hand is also essential. Lessons of the most memorable project failures teach us to receive feedback, maintain active communication with employees and business partners, and collect important data on business processes.
Today, special tools are used to get the full and up-to-date picture of the project progress. The experience of many companies shows that it’s better to start using them starting from the earliest steps. They don’t necessarily need to be expensive: many small businesses and startups benefit from free project management software that helps them successfully manage projects with their risks and challenges.