Why successful projects can
lead to strategic failure, and how to prevent it.
Susan Tuttle, Senior PRINCE2 Product Architect, PeopleCert
I’d like to start with this uncomfortable statement: successful projects can lead to strategic failure.
It’s a hard truth, but I have seen it happen more times than I can count. I can reel off numerous instances where projects met the deliverables on time and within budget, governance reports were all green, yet strategy still failed.
When you analyze things further, the problem is not delivery. It’s the lack of connection between decisions across levels.
It’s a reality we need to face. The world is changing dramatically and is more unpredictable than ever in terms of micro- and macroeconomic conditions, political policy and supply chain pressures.
Now more than ever, it’s worth reflecting on the point that when projects and programmes have momentum, they can culminate in strategic downfall. I’ve seen how hard it is to stop even when there’s an acknowledgment at the leadership level that the conditions for success have changed, and the expected value is no longer viable. But stop, we must.
Knowing when to challenge, adapt, or stop
Asking the right questions, at the right time, at the right level is the key to overcoming the strategic risk. This is where I see a pivotal role for the PMO. It connects the different levels of the organization and, provided it has the authority, can bring risks to light sooner than planned, ask the questions that matter, and make a material difference to success or failure.
That’s not to say responsibility rests with the PMO alone. Far from it, but it is the glue that brings everyone together and keeps them facing the right direction. In short, the overall focus should be on alignment, coordination, escalation, visibility and stopping.
Waiting adds risk, so what should you be asking?
When organizations wait to ask questions, they curtail their opportunities to adjust or stop, ultimately undermining strategic delivery. This failure to check in is when the harm is done, because it’s hard to put the brakes on when you’re deep into execution.
For example, an organization may be expanding into a new international market, with multiple projects underway to establish operations, systems and partnerships in that region. At a project level, everything can appear to be progressing well, with teams delivering against plan and meeting their objectives.
However, if the external environment shifts, for example through regulatory changes, new trade restrictions, or a significant drop in demand, the original strategic rationale for the expansion may no longer hold. The context in which those projects were approved has fundamentally changed.
At that point, the projects may still be delivering successfully in isolation, but the organization is no longer doing the right thing overall.
Delivery metrics still matter. But the more important question is whether the work continues to justify the investment. And it needs to be asked more regularly, not just at stage gates, and always in the context of the strategy. This brings visibility and the option to review before long-lasting damage is done.
PRINCE2 Project Management can help
Often the uneasiness to stop is wrapped up in a cultural belief that stopping is failure. It’s a phenomenon that I’ve seen in every size of organization and every stage of growth.
This is where PRINCE2 Project Management is particularly valuable. Its focus on continued business justification reinforces the discipline of regularly reassessing whether the work still delivers the anticipated value.
At a programme level, this requires actively assessing whether changing conditions are affecting the value the programme was intended to deliver, and ensuring it remains aligned with current organizational priorities.
What can we learn from organizations that get this right?
There are five behaviours that successful organizations tend to have in common.
1. They separate progress from relevance. They ask two different questions at two different points in time: are we executing well, and should we still be doing this?
The first is for the project or programme board, and the second is for the portfolio. Both matter and neither replaces the other.
2. They make misalignment visible as soon as it’s identified. They do not rely on someone spotting it informally. They create one view of all change across the organization, ensuring clear links to strategy are maintained. There are also explicit conflict checks at the funding stage. This means any misalignment is caught early because it is visible.
3. They escalate patterns, not just problems. It’s possible for a risk to be local to a project and therefore that team’s responsibility to fix. However, if there’s a pattern of similar risk happening in multiple projects, there’s a strategic problem.
This is where the PMO's unique value comes to the fore. It can use this insight to move the understanding from local problem to systemic pattern, and ensure it’s resolved, protecting the strategic imperative.
4. They use the PMO as a connector, not just a reporter. Status reporting has its place. But the transformative version of PMO work lies in connecting decisions across levels. This includes surfacing conflicts before they become costly and escalating things before they become urgent.
The PMO is viewed as the nervous system of change, not the scorekeeper.
5. They make stopping normal, and don’t view it as failure. Successful organizations have a culture that is brave and not afraid to stop and reset if what they planned to do no longer creates sufficient value. Bad news can be good news in these companies.
Stopping and re-evaluating provide the means to redirect resources to something that does add value. The organizations that lead on this celebrate the stop as much as the delivery.
Overall, organizations fail when decisions across portfolio, programme, project and PMO are not connected. Reversing this trend will help organizations strategically succeed and weather changes to the commercial environment.