A survey at a corporate training program was conducted to try and determine what project managers believe to be the fundamental consequences of poor project management. The findings were clear. Delays, incompetent resources, and project cost overruns were the most common problems that project managers faced in project delivery. The consequences of stakeholder mismanagement can also be quite hard to deal with.
Over half of the issues that any organization faces are related to project schedule delays and project cost overruns. The project management office and project managers specifically are tasked to anticipate these issues in order to avoid short and long-term consequences that may affect the organization as a whole.
By examining the 5 fundamental principles of poor project management, you can review what areas may be lacking and keep your current projects on the right track.
5 Poor Project Management Practices You Need To Avoid
The key to effective Project Management is the employment of PM’s best practices. Applying these practices ensures delivery of the scope with quality, on schedule, and within budget. On the other side of the coin, poor project management has high consequences. Failure to apply these principles can have lasting negative effects on efficiency, customer satisfaction, organizational reputation, and deteriorating morale.
To ensure effective service and economy of action, cost overruns and delays in the schedule must be mitigated. When there is a lack of motivation within the team, if the project or organization is suffering from a bad reputation, or if there is a sustainability risk for the organization, it can lead to negative consequences, and all of these items stem from poor project management.
Poor Project Management Consequence #1 – Project Schedule Delays
Project schedule delays are often unavoidable even when you have followed all of the best business practices. Following poor project management practices will make you walk right into Murphy’s Law: “If anything can go wrong, it will go wrong.” Schedule delays can be caused by poorly defined objectives, scope creep, and conflicts, either with personnel or vendors. Accurate analysis of project activities and thorough and consistent assessment throughout the scope of work reduces another part of Murphy’s Law: “Everything takes longer than you expect.” An oversight in one area, no matter how small, may devastate the entire project.
One of a project manager’s responsibilities is to create a realistic schedule based on the verifiable data collected and calculations based on the current resource costs. Poor project managers working with unrealistic schedules create delays by either over or under-scheduling tasks for the various teams. Schedule delays then flow from one task to the next. Often poor managers will expand the project parameters, adding additional features or functionality to the project disregarding the parallel adjustments required in time, budget, and resources. While all projects will encounter change, scope creep is never desirable.
Gold Plating is also a problem with poor project management that can lead to scheduling delays. Inexperienced team members may try to please the customer by adding additional functions or products without prior authorization from the project management team or the stakeholders. A poor project manager is unaware of when this occurs until too late. By not controlling the flow of the project they often lose control of the team, costing more time, and more money.
Preventing Project Schedule Delays
Strict deadlines are a part of all projects. The consequences of missing deadlines can lead to fines, loss or delay of governmental approvals and monetary fines. Even a single day delay can be catastrophic. Schedule delays can also lead to a loss of the organization’s reputation. Your customers, stakeholders, and future customers may all lose faith in the organization’s ability to follow through if you are assigned any future projects.
The 2020 Levelset National Construction Payment Report gathered survey results from contractors and suppliers and found that 70% think job site coordination is the main reason projects run over budget or past deadlines. Effective coordination depends on timely and accurate delivery of products. By ensuring that the proper information is exchanged, there will be fewer misconceptions and fewer mistakes. Realistic estimations during the planning process can keep those delays from sending your project off the rails.
The fact is, roofers shouldn’t be on a roof when there’s a thunderstorm, and the weather is just one of the many unforeseen and uncontrollable things that can cause a delay. Even the client, usually with good intentions, can create interruptions to cause a delay. A good project manager knows the start of Murphy’s Law: “Nothing is as easy as it looks.” It’s what you do after as a Professional Project Manager that matters.
Poor Project Management Consequence 2 – Project Cost Overruns
The second consequence to avoid is project cost overruns. Poor project management often leads to inaccurate estimates and poor budget management. The bigger your overrun turns out to be, the less net profit the organization makes on the project.
By applying proper project management techniques, a project manager can accurately estimate the costs. Using a systematic approach and thorough planning, a project manager should always be looking for ways to save as much money as possible while staying within or under budget. Utilizing existing resources, finances, personnel, materials, and time, a good project manager can find the most economical solution. They only seek out additional resources when absolutely necessary.
Project managers that are observing best practices are also aware of outside, quality, economical, resources that they can utilize. They take into consideration all of the options, for example, in-house manufacturing vs. external purchase cost. The scope of work may require a certain product or service that can be sourced from within, or they may need to call on their pool of outside resources, vendors, personnel, or materials. By avoiding waste with proper planning, they are able to stay under budget and in many cases even save the organization money in the long run.
An incompetent project manager doesn’t apply the proper strategies. In the planning stage of the project, they will over or underestimate the costs. They will exceed the budget, and the organization has to pay the price. In the case of large projects, mismanagement can have profound consequences. While losing a client is never a good situation, the aftershocks can result in a loss of reputation and new client offerings. In severe cases, mismanaged project management can lead to getting the doors closed for good.
Preventing Cost Overruns
Effective project management depends on the correct cost planning, monitoring, and control. Accurate information and figures are critical to realistic cost estimation.
A competent project manager will have processes in place. They have a comprehensive understanding of all logistics, operations, personnel, materials, and costs. With proper cost planning, they are able to monitor and forecast the project. Historical information, analogous estimating, or expert judgment techniques have helped them create a cost performance baseline. The project management team is on board throughout the planning process to brainstorm and preemptively assess monetary risks that may occur.
Successful organizations will not accept poor project management practices. When a project management team doesn’t utilize appropriate estimating techniques, it leads to cost overruns and loss of profit. Cost overruns affect the entire scope of work within a project as well as the organization as a whole.
Poor Project Management Consequence 3 – Demotivated Project Team
Poorly managed projects that fail to meet their objectives will cause demotivation in team members. The dominoes will start to fall, beginning with a lack of focus and moving on to a loss in productivity, continuing until the scope of work is on the floor. That one stumble can cause the team to become despondent. They may feel they could lose incentives and bonuses, be laid off, lose promotions, be demoted, or even fired. They will stop giving the project their best effort and begin to do the minimum to keep them off of the chopping block.
When teams see positive movement in a project, even when their specific team hasn’t been called to action yet, it provides them with the desire to give 100% effort, time, and energy to the project. The project management team has to consistently evaluate the progress of the project to continue moving the project along and keep the team members motivated.
Some of the main factors that cause demotivation in a team are:
- The project goals or individual team goals aren’t spelled out
- Team members feel they are being pulled in different directions
- Non-constructive criticism and the scarcity of appreciation
- Contradictory work methods
- Breakdown in communication
- Misused or biased use of policy
These are some of the most noted factors that cause demotivation.
Motivating the Team
Effective project management depends on planning, monitoring, and control. Even if you have created a concise project roadmap, problems will arise. Remember Murphy?
Availability and assignment management are key to resource management. Whatever caused the demotivation, by anticipating issues in the planning stage you should be able to anticipate, address, and dismiss the problems as they arise. Clear communication with the team will ensure they are coordinated and driven. By remembering that the project manager is there not only to manage the team but also to serve the team and the project, you can lead your team back to achieving the objective, moving them forward without tipping over any more dominoes.
Lead by example. Let your team know that you aren’t just the lead, but a partner in the success of the project with them. Teams with no motivation can’t provide the project with the energy and dedication it needs. They will ultimately tip over until the whole line goes down.
Poor Project Management Consequence 4 – Bad Reputation
There are very few instances, outside of rock and roll, that a bad reputation is a good thing. Poor project management can blemish what was once a stellar example within an organization’s market. One failing project could be caused by unforeseen events and forgivable in the marketplace, but failing on several levels and through several projects boils down to poor project management, period. Eventually, the news will spread, and the customers will fall away, going over to competitors, even those that are new to the marketplace. The customers want quality service and timely deliverables and if the organization isn’t providing that due to poor project management, they will go elsewhere
Studies have shown that if a customer is satisfied with a product or service, they will tell an average of 3 people. Of those three people, one in three might take that recommendation and use the product or service. If a customer is dissatisfied, they will tell a minimum of 10 people, and like a bad rash, that bad reputation will spread around the industry. Not only can it cause issues with current and future projects, but a bad reputation can also cause a problem with resource management within the organization. Finding and keeping quality personnel is just another one of the many consequences of a bad reputation.
Reputation: From Good to Bad
Project management is all about the plan. When best practices aren’t followed and poor project management practices become the norm, the loss of control and direction is inevitable. Schedule delays, cost overruns, and demotivation of the team all lead to project failures. Those failures will be weighed, they will be measured, and the project will be found wanting. In the end, an organization’s reputation relies on the quality of personnel they employ. When a project manager disregards the reputation of the organization by failing to meet deadlines, failing to adhere to the budget, or failing to produce the product quality that the customer requires, they are poor project managers, and they will negate the successes that your organization has had by their lack of standards.
Poor project management affects everyone within the organization. Team members disregard instructions of poor project managers, outside resources often take advantage of a lack of commitment to the project, and the reputation of the individual will spread, creating challenges for upcoming projects as well as the possibility of demotion or dismissal.
Poor Project Management Consequence 5- Sustainability Risk for the Organization
As stated before, there are always problems when working on a project, and one failed project does not always ruin the organization as a whole. But one rotten apple can spoil the bushel. Continued failures can cause the end of an era, especially if those failures are caused by poor project management. If the organization can no longer produce, compete and profit, it will lose resources, reputation, and money. Bankruptcy and closure may be close at hand.
There is no I in Team, and there is no one person to blame for an organization’s failure. Repeated failures due to project management mean that there are other factors that are allowing those projects to fail. When resources, team leaders, vendors, and stakeholders are all complicit in the continuation of poor product management, there is a risk to the organization’s sustainability. The truth is, it’s not just one person who contributes to the failure of a project. When an organization fails, it is a shared responsibility, just as success is shared when an organization is thriving. Unfortunately, organizations that have too many failed projects are not able to survive. It is the failure of these small projects that leads up to the failure of the whole organization on a larger scale.
Mitigating the Risk To the Organization’s Sustainability
All of the consequences mentioned above can lead to the sustainability of an organization. If a project goes over schedule or budget, fails to produce a quality product, or loses its focus, poor project management may be the cause. Each negative aspect can bring discredit to an organization in the eyes of its customers, resources, and competitors. The only way to recover is to mitigate the risk.
Businesses fail daily due to poor project management. Delays in delivery, higher costs, and lack of planning can all contribute to failure. But there is always hope.
Proper project management starts with planning. By studying all of the data to produce a scope of work that recognizes setbacks and provides a plan for dealing with them, a good project manager can mitigate the risk to the organization’s sustainability.
Staying aware of current market trends, laws, and codes, not only for the project area you work directly in but also in the areas that affect your organization can help to mitigate the risk as well. Understanding what the customers want, what’s available, and what the competitors are offering is all part of procuring the project. That information needs to be consistently addressed throughout the project to keep it and the organization as a whole sustainable.
Upper management must not only be kept up to date with the projects within the organization, but they need to keep up to date with what is making others in their industry grow. Effective communication, proper training, and instruction will keep personnel resources at a level to encourage growth.
Again, the project manager is there to serve as well as manage. In order to lead, they must manage themselves. Good project managers are persistent, productive, and prudent. They are the heart of the organization and the key to sustainability.
Good project management leads to profits and growth. Remember, Murphy’s law also says, “Whoever makes the gold makes the rules.”
The five consequences of poor project management are schedule delays, cost overruns, demotivated teams, a bad reputation, and sustainability risk to the organization. Research has proven that the majority of businesses fail because of poor project management. Lack of planning shows in the failure of projects within an organization.
Mitigating the risk starts in the planning stage. First, the schedule has to be set up to avoid and anticipate schedule delays. This leads us to the budget which must accurately reflect the costs of the project in order to avoid costly change orders and cost overruns. Next, resource management is key to keeping your team motivated and engaged, and this will lead to keeping the organization’s reputation intact.
Good project management requires knowledge, creativity, and the ability to pick up the pieces and get back in the game. A setback means that there was movement forward and there will be forward movement as long as the project management team is capable and rational when creating the project plan.
Poor project management can lead to disastrous results. The consequences can be dire. But good project management pushes you, your team, the project, and the organization into the future.
Back to Murphy: “Anything you try to fix will take longer and cost more than you thought.” Murphy wasn’t an optimist. He was probably a poor project manager. The better lead to follow is Mark Twain: “Plan for the future, because that is where you are going to spend the rest of your life.”
Understanding the information in this article is an essential part of project management and a vital part of the PMP exam. Improve your project management skills or prepare for the PMP Certification exam by taking a quality online PMP exam prep course.