Consequences of Poor Project Management
Project Management is the art of delivering a scope at a certain level of quality with a defined
budget and during a determined schedule. Successful project delivery can be achieved only
with good project management practices. There are many consequences of poor project
management due to the bad implementation of project management practices.
There are five fundamental consequences of poor project management:
1. Project Cost Overruns
2. Schedule Delays
3. Demotivated Project Team
4. Bad Reputation
5. Sustainability Risk for the organization in long-term
Let’s go over these one by one now. You can read further on the signs of poor project
management.
• Prevent poor project management risk with the help of our corporate training program
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Consequences of Poor Project Management
When we surveyed our 425 participants who attended our corporate training programs, schedule
delays, incompetent resources, and project cost overruns are the most common issues in
project delivery organizations.
As you can see, project schedule delays and project cost overruns make up more than 50% of the
issues that organizations face. There are short-term and long-term consequences of poor
project management in an organization. Therefore, the project management officers or the
project management office of an organization must be very well aware of the consequences of
poor project management practices.
Consequences of Poor Project Management #1 – Project Cost Overruns
One of the most important consequences of poor project management practice is project cost
overruns. If appropriate project management skills cannot be applied, the estimations will not be
accurate, and in the end, activities will cost more than planned.
Estimating accurate cost requires a systematic approach and thorough planning. When project
managers are estimating activity costs, they have to look at all the ways to save maximum
money and stay under budget. For instance, they should look at buy vs make cost. They should
take estimates from multiple vendors and select the most economical one. Also, they should use
the existing resources as much as possible and bring in more resources only if it’s really
necessary.
In addition to these commonly used cost-saving strategies, project managers can also consider
hiring cheaper resources and avoiding waste or redundant activities to save money. These are
some of the things that a competent project manager must do in order to stay under budget and
save maximum money.
Often in projects, however, there is a lack of proper cost planning, and it is due to the lack of
technical skills of the project manager. As a result, the project cost exceeds the budget and the
organization has to face the consequences of poor project management. Often, in large
projects, if such a situation occurs, organizations have to get loans for their survival. And, they
may even have to lose their clients and damage their reputation.
Read more about good vs bad project managers.
How to prevent cost overruns?
Therefore, proper cost planning, monitoring, forecasting, and control must be an integral part of
required project management practices. A competent project manager should have the right
knowledge, information, and data to help them create a realistic cost baseline. Furthermore,
project managers should follow recommended project management processes to help them
effectively monitor the cost and report on any variance. A competent project management team
would consider all the ways to save money and never let money go wasted.
On the other hand, poor project management practices would result in cost overruns and
losing gobs of profitable money. Furthermore, no one would accept the excuse of poor project
management. Hence, organizations must put the effort into developing competent project
management to help them achieve the project targets and be successful in their goals.
By attending our award-winning courses, your employees will get practical guidelines on how to
prevent cost overruns and how to monitor the budget expenditure on the project. The participants
will gain confidence in planning and monitoring the project budget and will learn how to control
the budget using different analytical techniques to measure the health of the project. Based on the
analysis, the project managers can forecast the budget expenditures and determine if the project
would be completed within budget, with savings, or if there would be a cost overrun requiring
additional funding.
Consequences of Poor Project Management #2 – Project Schedule Delays
Another consequence of poor project management is project schedule delays. Unclear tasks,
conflicts, scope creeps, etc. will all cause project schedule delays. If you want to have a realistic
project schedule, you need to thoroughly estimate your project activities. And that estimation
must primarily be based on the scope of work, number of available resources, and productivity of
each resource. Just one activity with an incorrect estimate can result in project delays. Imagine, if
you estimate many activities incorrectly, how much delay these activities can cause to the
project?
The Project Manager has the responsibility to produce a realistic project schedule and also
verify their calculations to ensure correctness. Where poor management is in place, you will
end up with an unrealistic schedule for your projects. Not just this, but scope creep and gold
plating might also happen, causing project schedule delays. When you don’t define the scope
clearly or do not control it well, your team or the customer may easily find many opportunities
for scope creep and gold plating. The team may be doing it with good intentions, which are to
please the customer. However, this will impact your project schedule and will cost you more. If
the project management practices are efficient, you will find it very easy to control or even avoid
such things and fulfill the schedule targets.
How to prevent project schedule delays?
Often, projects have tight deadlines and penalties are fine even with a one-day delay in the
project. When a project delays, you lose your reputation with your client as well as with other
stakeholders. They will not trust you again for future projects and it may be difficult for you to
win more projects.
Hence, it is very important for project management to carefully estimate the project schedule.
Also, monitor and control it in order to complete the project on time. According to Levelset
report 2020, about 70 percent of contractors say delays are due to poor project coordination. It is
the Project Manager who is responsible for coordination and communication. Without proper
information exchange, there will be miscommunications or misunderstandings, which may
result in unrealistic project estimations as well as improper schedule monitoring.
It is true that some delays are justifiable, such as delays caused by bad weather or the client.
However, other delays that are in control of the Project Manager must be monitored and
properly managed. If these delays are not managed well, then this is a direct consequence of
poor project management practices.
By attending a PMP, CAPM or Core PM training course, the participants will receive an in-depth
understanding of how to plan, manage and control project schedules. Furthermore, participants
will be able to understand triggers that might cause schedule delays, will gain confidence in how
to manage and mitigate schedule-related issues, and apply successful tools to bring project
schedules back on track.
Consequences of Poor Project Management #3 – Demotivated Project Team
When the targets of the projects are not met, this will demotivate the team members. The
team may lose focus on the work and not remain productive as before. In a situation when the
project is going off track, the team tends to think that this situation may result in layoffs,
cancellation of incentives, delayed promotions, or even demotions. So, a project that is going to
fail will demotivate the team members and they may stop giving 100% to the tasks at hand.
On the other hand, when the team members see that the project is progressing well and there are
positive results, it is natural that they will be motivated.
Sometimes, there are other factors too that cause team demotivation. For example, project goals
are not clear. Without clearly defined project direction or goals, the employees will have
difficulty aligning their efforts. Hence everyone will have their own sense of project success.
Lack of praise and recognition is also a cause for a demotivated team. Organizations that do not
recognize the team’s efforts will fail to gain the team’s full support and commitment. Other than
these, lack of discipline in the team, non-dynamic work styles, lack of communication,
unfair use of policies, and lack of communication are also the reasons for the demotivated
team.
How to motivate your team?
Poor project management can result in project resources that are not motivated. Therefore, it is
critical that Project Managers understand not only the project objectives but also the needs
of the project team. They should provide the project team with proper plans, guidelines, and
processes to follow. Furthermore, a good Project Manager will lead their team towards clearly
identified project goals by guiding, mentoring, and helping them along the way. If these
project management characteristics are missing in your organization there will be challenges and
obstacles for your projects to succeed.
Knowing how to manage a team is an art. If you do not provide direction, clear project plans, or
do not manage your team well, this will cause your team to easily become demotivated and lose
interest in their work. The demotivated teams have no passion for work. If you have such a
team, there will surely be a hindrance in achieving the project objectives.
Every Project Manager needs to develop a set of soft skills to successfully manage their project
team and other stakeholders. We, at Master of Project Academy during our PMP, CAPM, and
Core PM training courses, discuss in depth how to motivate, develop, and properly manage the
project team. High-functioning and supported teams are paramount to a successful project.
Consequences of Poor Project Management #4 – Bad Reputation
One of the irreparable consequences of poor project management is a bad reputation within the
organization and in the marketplace. If a project manager is failing projects because of poor
project management execution, their reputation within the organization will suffer over time.
Similarly, an organization known for poorly executed projects will have a hard time
acquiring new clients or work. Customers will avoid organizations that deliver poor-quality
products or services.
The consequences of poor management that would result in a negative reputation for the
organization must be avoided at all costs. Imagine, your organization has several customers, and
many of them are impacted by the organization’s poor project management practices. What do
you think will happen? Your customers, who may be having issues with their services or
products that you sell to them, will be looking for alternative providers. The negative
reputation of the organization will also link to increased challenges in resource hiring and
retention. Once an organization has a bad reputation, people would be hesitant to work for that
organization.
How poor project management could cause the reputation of the organization to go from good to
bad?
Well, if the Project Manager fails to properly apply project management practices,
properly plan the project, direct, or control the project work, this would damage the
organization’s reputation as well as the project’s success. An unrealistic initial schedule will
lead to project delays. Similarly, incorrect cost estimates may result in cost overruns, resulting in
a weakened reputation. So, there could be so many things that could directly or indirectly link to
poor project management.
Once a project fails to meet its targets, the organization will lose its reputation to its customers,
sponsors, or even to the public. Therefore, you should make sure your organization’s
reputation is always positive as it is critical to business success. Once you have lost your
reputation, it will be very hard to regain the same reputation and trust.
Once managers or departments develop a bad reputation, it will become difficult for them to
manage their work or achieve work objectives. People in the organization would lose trust in
their management and would not consider them as relevant decision-makers. The project
manager is responsible for taking the projects from planning to closing. However, if their
reputation has been compromised, there will be challenges in managing the projects as well as
the resources.
During the training courses offered by Master of Project Academy, the Project Managers or other
participants will receive in-depth guidance on how to be reputable, trustworthy project managers
or decision makers. Our instructors, who have extensive practical project management
experience leading and managing project teams, will provide you with lessons on how to gain
and maintain your reputation in the organization and help improve your technical, leadership,
and business acumen skills.
5- Sustainability Risk for the Organization
An organization with several failing projects cannot survive in the long run. Therefore, the long-
term inevitable consequence of poor project management will be the closing of the
organization. Organizations initiate projects to create products, have advancement in the market,
and make a profit. Failing projects will cause a monetary loss for the organization and may
even cause bankruptcy in the long term.
It is true that not only one person contributes to the project failure. There are many people or
several factors that are the reason why organizations fail. However, organizations that
usually couldn’t survive are due to repeatedly failed project, and failed projects are a direct
consequence of poor project management.
How poor project management could be a risk to an organization’s sustainability?
Well, a project that exceeds its cost more than the set budget is a failed project. When an
organization overspends, its underlying financial stability becomes weakened, and it could be
challenging for the organization to survive in a competitive marketplace. Similarly, a project
which delivers products or services that are not acceptable may result in the client
requesting contract termination, which may lead to business or reputation loss.
There are many other reasons why a business could fail, such as project delays, competitive
market, high operations, and resource costs, etc. When there is a lack of planning or lack of
a clear business strategy, which includes understanding the competitive market or having a
solid project vision, then the impact on the organization may not only be a lack of growth but
could possibly cause the business to fail.
Similarly, if management is not aware of market trends, and the needs of the customers, or if
management are unaware of what competitors are doing, then the business will struggle to keep
up. Weak corporate leadership, lacking in good communication processes and clear directions
can also negatively impact the organization’s performance.
