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Astute submarine programme and NIMROD maritime air reconnaissance project both ran into serious
difficulties. More recently Airbus’s troubled A380 programme has attracted much negative publicity
for being both late and over budget.1 Over a four-year period A380’s woes may cost the parent
company (EADS) around US$6bn. US projects like the Lockheed/Boeing F22 have also failed to
deliver on-time, on-cost performance. In this case the aircraft is 10 years late and 123% over-budget.2
It should be noted, of course, that these problems are not just typical of aerospace and defence. For
example, UK government IT projects are notorious for being late and hugely over budget.
Construction projects, like Wembley Stadium, are also often behind schedule and over cost. However,
this paper focuses particularly on aerospace and defence, as the authors have spent the last 10 years
analysing defence and aerospace programmes and have developed a project management approach
aimed specifically at large projects in these industries. However, many of the observations and
arguments made below will apply generically to other sectors.
1 For an analysis of the woes of A380 see Chicago Tribune, (December 17, 2006)
2 See, Firstdefence.org/typhoon.doc
Why Projects Fail
4
Consequences of Failure
The negative publicity generated by programme failures is bad for the companies involved and also
for the wider reputation of engineering. Severe failures usually push share values down and can even
risk the viability of the company. Both BAE SYSTEMS and EADS (the Airbus parent) have had to
write down large losses in recent years because of project failure.3 As well as increased production
costs and lost sales these failures also incur penalties, when contracts are performance-related and
fixed-cost, which is also highly damaging commercially. But there are many other consequences.
Large engineering project failures waste public finances, they delay the provision of key services,
such failures risk jobs and key capital investment and they may even cause bankruptcy and
liquidations. The reputational issues may also affect graduate recruitment into these businesses,
threatening the long-term viability of the sector. In short these failures are disastrous. The overall
scale and effect of project failure is well expressed in an article in the Harvard Business Review:
Big projects fail at an astonishing rate. Whether major technology installations, postmerger integrations,
or new growth strategies, these efforts consume tremendous resources over months or even years. Yet
as study after study has shown, they frequently deliver disappointing returns—by some estimates, in
fact, well over half the time. And the toll they take is not just financial. These failures demoralize
employees who have labored diligently to complete their share of the work. One middle manager at a
top pharmaceutical company told us, “I’ve been on dozens of task teams in my career, and I’ve never
actually seen one that produced a result. 4
The Causes of Failure
Why do so many large engineering programmes go wrong? The conventional explanation highlights
issues of competence, management oversight, risk management and governance. As James Reason
has shown in his work on safety management it is a natural human reaction to seek to blame someone
when there is a major problem or failure in an organisation.5 Conventionally, the bigger the problem
the greater the blunder some individual is deemed to have made. Current thinking in the project
management community is highlighting governance issues and poor and inadequate risk
management.6 Certainly our research has shown that there are failures of competence by programme
managers and risk management varies in its sophistication and effectiveness. Failings typically
involve the 8 factors listed below:
Poor initial planning
Lack of clear objectives and deliverables.
Lack of understanding of dependencies
Inadequate resource allocation
Poor risk analysis
Poor change management
Lack of “buy-in” from stakeholders
Poor understanding of priorities
These 8 “deadly sins” of project management bedevil large engineering projects. Yet we believe they
are not sui-generis. The authors of this paper contend that the underlying causes of project failure are
deep seated, structural and endemic, leading to the particular weaknesses identified above. Through
interviewing project managers across the defence and aerospace industry and also via direct
3 EADS’s market value fell by 26% after serious delays where announced on the A380 programme in the
summer of 2006, Financial Times, (June 30 2006)
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