According to Project Management Institute’s 2017 “Pulse of the Profession” global survey, organizations are wasting $97 million for every $1 billion invested due to poor project performance. Yes, that’s a 20 percent decline from the previous year’s survey, but the truth is, projects still fail at a staggering rate.

What are the primary high-level reasons for project failures? Since 2006, the PMI has conducted an annual global survey of project management practitioners to chart current and future trends for project management. The survey highlights feedback and insights from project, program, and portfolio managers, along with an analysis of third-party data, and it sheds clear light on what it takes to succeed as a project manager today.

PMI defines two types of performers when it comes to success rates: champions and underperformers, which achieve the following percent averages:

Not surprisingly, champions generally achieve higher project success rates of 92 percent, when compared to the 33 percent of underperformers.

In the past, project-level factors received more focus when projects failed. Often ignoring or missing the fact that project success or failure rates were greatly driven by higher-level organization-wide factors. These high-level factors made it virtually impossible for project professionals to achieve project goals when both were either not in alignment or absent.

The following seven steps are key to ensuring on-time, on-budget and goal-based project delivery; company and project leadership should be in sync in all of these areas if they are intent on creating the sustainable results stakeholders desire.

1. Align company-wide strategic goals through an EPMO

Consider strategy the roadmap that should drive all company initiatives. Without this, teams across organizations risk flying blind, which in turn, risks long-term objectives. As a result, more companies are embracing the need for an enterprise-wide project management office (EPMO). The EPMO is a centralized strategic business-level function aimed at providing company-wide support on issues like governance, best practices, training, mentoring, identify and adopting techniques/ tools, and standardizing business processes.

PMI says, “Among organizations in our survey that have a PMO, half report having an enterprise-wide project management office (EPMO). And those that align their EPMO to strategy (i.e., have a strategic EPMO), report 38 percent more projects meet original goals and business intent and 33 percent fewer projects are deemed failures.”

2. Practice benefits realization management

Along the lines of company-wide strategy and the EPMO, comes the importance of identifying, executing and sustaining a benefits realization plan.

“Benefits realization management (BRM) is a powerful way to align projects, programs, and portfolios to an organization’s overarching strategy. But the discipline has intimidated many because there is no single, widely accepted BRM process to follow. Despite that, more organizations are taking steps to establish procedures for identifying benefits and monitoring progress toward achieving them throughout the project life cycle and beyond. In fact, 31 percent of organizations in our survey report high benefits realization maturity,” says the PMI survey.

Benefits Realization Management determines the “how” of connecting your project with strategy. As part of its leadership series, PMI has established a Benefits Realization Management Framework guide (pdf) to help:

• “Identify benefitsto determine whether projects, programs and portfolios can produce the intended business results.
• Execute benefitsmanagement to minimize risks to future benefits and maximize the opportunity to gain additional benefits.
• Sustain benefitsto ensure that whatever the project or program produces continues to create value.”

3. Bridge the gap between strategy formulation and execution

The next thing that needs to be tackled is how to execute company-wide strategy. PMI’s survey shows that over the past 12 months, only 60 percent of organizations know how to bridge the gap between identifying strategy and executing strategy. This can involve everything from identifying talent and resources, gaining buy-in from executive sponsors, teams and stakeholders to selecting the right tools or methodologies among other things. Determining how to execute strategy is an important step. This is a good stage to slow things down and ensure all of these factors, among others, have been taken into account and carefully planned out. The risks of missing this step can become costly in many ways down the road.

4. Gain (and maintain) executive sponsorship

The role of executive sponsorship is to support all company-wide projects and to establish the link between projects and company goals. Executive sponsors also champion projects, reinforce engagement, assist in conflict or issue resolution, provide guidance, and establish the budget and resources required for success. Corporate culture is also determined at these executive levels and determine team culture and collaboration levels.

Imagine the negative impact on projects without sufficient sponsorship. PMI’s report indicates that “actively engaged executive sponsors continue to be the top driver of whether projects meet their original goals and business intent. That fact was not lost on survey respondents, who revealed an increase in the percentage of their organizations’ projects with actively engaged sponsors compared to last year — an average of 62 percent compared to 59 percent, respectively.”    

5. Hire (and retain) the right talent

Projects are primarily successful because of people who execute them. Talent selection, training and development, mentoring and trust are essential to how individuals and teams interact and execute projects. Companies that are considered “Champions” are prioritizing the development of technical skills (76% versus 19% of underperformers), leadership skills (76% versus 16% of underperformers), and strategic and business management skills (65% versus 14% of underperformers) — all critical areas. When investment in people occurs, it increases the chances of buy-in. As a result, individuals believe their contributions are key to goal attainment and are more likely to apply their knowledge and skills fully.

6. Adopt agile

Identifying, selecting and correctly employing the best methodology for each project is important to achieving the desired results. Agile is one of the most widely adopted methodologies. In fact, PMI reports over the past 12 months 20 percent of projects were executed using agile, with “71 percent of organizations now reporting they use agile approaches to their projects sometimes or more frequently than in the past.” The survey also discusses how “Champions have a keen focus on using agile approaches to projects — 55 percent versus 24 percent of Underperformers.”

7. Tackle technology and business disruption

The connectivity revolution is increasingly being “fueled by handheld electronic devices such as smartphones and tablet computers, is penetrating even remote and poor countries, and is almost certainly contributing to the proliferation of distributed projects in many industries and nations,” according to the PMI report. As fast as that trend is occurring, companies continue to be put under pressure to adopt technologies that enable agility while meeting the growing demands from stakeholders. Resistance to change can force companies into a state of stagnation, making it difficult for project teams to be agile and effective. According to PMI, “organization leaders are adjusting their strategies in response to business disruptions. For many, it is ‘do or die.’ To stay relevant in the marketplace, executives recognize they need to lead the transformation, not just follow.”