Why Do Strategic Projects Fail?

Abstract

There is no dearth of literature inquiring into the reasons for failure of strategic projects—major organization change efforts involving significant, irreversible commitment of resources. However, researchers have failed to go beyond blaming company managers, for example by observing that managers function in silos, protect own turf to the detriment of the project and escalate commitment to failing courses. Yet, in other situations, the same managers obtain excellent organizational outcomes. Thus, there is a need for inquiring into more distal causes of failure embedded in micro-level organizational arrangements. We study the failure of a strategic project by Burawoy’s extended case method. This approach applies reflexive science to ethnography to extract the general from the particular, facilitating a move from the micro to the macro level. We find that administrative tenets drawing from dominant management orthodoxies—setting direction and settling issues by fiat, rigorously metering accomplishment of organizational members to goals committed to ahead of time, and swift punishment upon deviation from commitments—give rise to dysfunctions that lead to failure of a strategic project. We offer practical advice to managers to help lower the risk of failure of a strategic project. We suggest that, in order to foster the level of coordination necessary in an organization-wide change project, it is necessary that internal and external stakeholders provide reassurance there shall be no sanctions when project goals morph over time as the organization progresses on the execution path through trial-and-error learning. Specifically, relaxation of near-term performance expectations is necessary.