The Cost of Project Management Failure For New Busineses
A great idea is nothing without great execution, and to execute to the max effective project management is essential. Yet many new businesses don't acquire the necessary skills protect their cash, deadlines, product/service quality, and leadership time. Founders and owners who embrace project management have the best chance of success.
Most projects fail, and every new business is a project
In a report produced by CISQ in 2020, a figure of $260 billion is quoted as the cost of unsuccessful IT/software projects in the US alone. Additionally, the Standish Chaos Report (2020) states that 66% of technology projects end in either partial or total failure. What’s more, 90% of new startups fail. 75% of venture-backed startups fail and under 50% of businesses make it to their fifth year. As every startup is a ‘project’, this shows how important project management is when creating a successful new business.
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These figures make frightening reading for new businesses, as they indicate just how hard it is to create something new well, and cost-effectively. And, unlike large corporations with enough cash to absorb such mistakes, new businesses cannot afford to get things wrong – which is where expert project management comes into play.
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Our consulting project managers are experts in accelerating technology project outcomes, having done so for some of the world’s largest companies in the last 30 years. Now they are bringing their proven methods to the world of new businesses, seeking to help founders deliver quickly on their vision. Some of the principles they apply are:
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The race to MVP
Getting from idea to ‘go to market’ as quickly as possible is imperative for founders. And doing business at the speed of thought is a function of the people you have, and their level of achievement focus. Our experts create a culture where outcomes are everything, harnessing the creative powers of your people and ideas to produce market-ready products. We help you plan for market testing, not just software testing, so that you are ready to launch with a high-quality user experience alongside an ability to quickly scale thereafter.
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Plan ahead - think 1st, act 2nd
The failure rate on Agile software developments is just as high as on any other type of project. Why? Because humans are involved. Project methodologies don’t write scopes, they don’t create backlogs, they don’t organise sprints, and they don’t make important decisions. The quality of your human inputs into the UX development process (note: we never talk about ‘software development’ because it’s the customer that counts) and the project management culture of continually promoting “thinking before coding” combine to create a high-quality development environment where ideas flourish by planning head, and outcomes triumph.
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Project management tools are irrelevant to success
Every dollar of the wasted $260m we mention above goes through a project management tool of some variety –that money is still wasted, and the projects still fail. New businesses can learn from this by recognising that whilst there is a preponderance of project management tools out there – the tool itself is the thing that’s going to help your project be successful. Choose a tool that’s fit for purpose and start using it, but don’t expect it to magically make your project happen – that’s down to you and the quality of the people you have working on it. Some good tools include JIRA, ClickUp, Monday, Microsoft Project, and Trello - there are loads to select from.
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Time really is money
Every day you delay the outcomes of a project costs money. A month’s delay can burn through a substantial amount of the lifeblood that is your scarce investment cash, so it’s imperative that things get done on time. Whilst Agile methods are great in that they prioritise workload and (should) keep people communicating to delivery great products, the reality is that many Agile projects spiral out of control. Waterfall projects are no better. Strong project management will steer your teams towards valuing time, and therefore money, so they avoid making assumptions which prove to be incorrect (one of the key causes of project overruns), move pragmatically to take decisions, and escalate issues rapidly in the event of uncertainty.
A great idea without execution is worthless
As we’re talking about the costs of bad projects to new businesses, let’s step back to remind ourselves that even the best idea in the world will get nowhere without effective execution. If your project spirals out of control – as so many do – then you end up with no product, no UX, but having burnt a load of cash. That’s something investors aren’t terribly keen on – if you can’t deliver, they are reluctant to pour more money in unless something fundamental changes.
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The good news is that the common causes of project failure are all avoidable if you know what you’re doing. Best then, to start off with help from professional project managers who possess the mindset, approaches, and disciplines to drive successful outcomes. Our project management team provides a reliable framework for all new and growing businesses, one which preserves your resources (time, money, management focus) to allow you to evangelise and grow your business whilst minimising the risks of project failure which afflict so many.
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If you’d like to find out more about how effective project management can help your business, take one of our free consultations, sign up for our “Project management for new businesses” session, or click the button below and we’ll happily explain further.