A brief paper written for my master's-level course in project management, exploring why projects fail. Uses Avon's "Promise Project" and JC Penney's pricing strategy as examples of spectacular project failures.

1. Running Head: WHY PROJECTS FAIL
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Why Projects Fail
Teresa J. Rothaar
Wilmington University

2. WHY PROJECTS FAIL
Why Projects Fail
Projects fail for numerous reasons. The Why Projects Fail website lists 101 common
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causes, while Bruce Harpham’s blog post on Better Projects argues that most project failures can
be traced to one or more of only three core reasons:
1. Poor estimates during the planning phase.
2. The scope changing mid-project.
3. Insufficient resources, monetary and otherwise (such as staff).
While, I agree with the Why Projects Fail site’s assertion that the majority of project
failures occur for a variety of highly complex reasons, I also agree with Harpham that the root
cause—the one that caused all of the other issues—is likely very simple. In my experience, both
in business and on a personal level, many if not most project failures can be attributed to a
simple lack of communication between all stakeholders from the beginning. This ends up
causing a host of other problems down the road, including Harpham’s three core problems, as
well as a fourth core problem: not everyone is fully on board with the project, because they do
not understand how the project will benefit them or—even worse—feel that the project will be
harmful to them. People in the former category may be unwilling to provide the necessary
support for the project, while people in the latter may attempt to sabotage it.
As I discussed in a message board post earlier this week, Avon endured one of the most
spectacular project failures in recent times with its “Promise Project.” Avon had fallen behind
the times when it came to ecommerce. The company’s door-to-door “Avon calling” model,
complete with customers filling out paper order forms, was no longer relevant to 21st century
consumers, and the company was having difficulty competing with cosmetic companies that had
long since switched to online sales. The Promise Project was a good idea in theory. It was

3. WHY PROJECTS FAIL
supposed to equip every field sales representative with an iPad, upon which customers could
place orders and enjoy features such as real-time inventory checking (Henschen, 2013a).
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Unfortunately, Avon made a crucial mistake: it never asked its sales representatives what
they wanted, and apparently never involved them in the project in any fashion. It simply told
them that a great new system was coming, then went ahead with designing and implementing an
order system that end users rejected, claiming it was buggy and too difficult to use. The
representatives hated the system so much that approximately 16,000 of them quit across Canada,
where the project was piloted (Henschen, 2013b). After Promise was terminated in December
2013, Avon disclosed in an SEC filing that they had lost $100 million to $125 million on the
failure (Why Projects Fail, 2014).
Avon’s representatives were clearly never on board with this project. They did not see
how it would benefit them, and in fact, they saw the new system as an impediment so severe that
they left the company over it. Communication between Avon and its representatives could have
prevented these issues. The company could have designed a system that everyone would have
embraced, if only they had involved the end users in the project process.
What Avon did was bad. What retailer J.C. Penney (JCP) did might have been worse;
their failed project to revamp their pricing strategy resulted in the ousting of CEO Ron Johnson
after only 17 months in the role. Avon failed to communicate with its sales representatives.
Johnson refused to communicate with JCP’s customers (or with JCP employees who begged him
to do so). Upon taking control of the company, Johnson decided that he would eliminate sales
and coupons, under the assumption that customers would prefer “everyday low prices.” Problem
was, Johnson had no statistics or research to back up his theory, and he steadfastly refused to
perform any market research to determine whether JCP’s customers would respond favorably to

4. WHY PROJECTS FAIL
the change. He also refused to pilot-test his pricing strategy, insisting that it be immediately
implemented in every store from coast to coast. Customers hated that their coupons and sales
were gone. The retailer’s sales continued to plummet, and, as Johnson insisted on staying the
course, claiming that things such the color of the price tags were the problem, employee morale
went down the toilet. After firing Johnson, JCP released an ad apologizing to its customers for
not listening to them, and told the press that the ex-CEO was “out of touch with the company’s
customers, its workforce and its culture” (Bhasin, 2013).
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5. WHY PROJECTS FAIL
References
Bhasin, K. (2013, May 2). J.C. Penney Pricing Disaster Destroyed Employee Morale. The
Huffington Post. Retrieved from http://www.huffingtonpost.com/2013/05/02/jcpenney-pricing-
disaster-morale_n_3196037.html
Harpham, B. (2014, September 17). How to Prevent Project Failure in 2014. Better Projects.
Retrieved from http://www.betterprojects.net/2014/09/how-to-prevent-project-failure-in-
2014.html
Henschen, D. (2013a, December 12). Avon Pulls Plug On $125 Million SAP Project.
InformationWeek. Retrieved from http://www.informationweek.com/software/enterprise-applications/
avon-pulls-plug-on-$125-million-sap-project/d/d-id/1113061
Henschen, D. (2013b, December 16). Inside Avon's Failed Order-Management Project.
InformationWeek. Retrieved from
http://www.informationweek.com/software/information-management/inside-avons-failed-
order-management-project/d/d-id/1113100
Why Projects Fail. (n.d.). 101 Common Causes. Retrieved from http://calleam.com/WTPF/?
page_id=2338
Why Projects Fail. (2014, January 21). Avon Products. Retrieved from
http://calleam.com/WTPF/?p=6248
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6. WHY PROJECTS FAIL
References
Bhasin, K. (2013, May 2). J.C. Penney Pricing Disaster Destroyed Employee Morale. The
Huffington Post. Retrieved from http://www.huffingtonpost.com/2013/05/02/jcpenney-pricing-
disaster-morale_n_3196037.html
Harpham, B. (2014, September 17). How to Prevent Project Failure in 2014. Better Projects.
Retrieved from http://www.betterprojects.net/2014/09/how-to-prevent-project-failure-in-
2014.html
Henschen, D. (2013a, December 12). Avon Pulls Plug On $125 Million SAP Project.
InformationWeek. Retrieved from http://www.informationweek.com/software/enterprise-applications/
avon-pulls-plug-on-$125-million-sap-project/d/d-id/1113061
Henschen, D. (2013b, December 16). Inside Avon's Failed Order-Management Project.
InformationWeek. Retrieved from
http://www.informationweek.com/software/information-management/inside-avons-failed-
order-management-project/d/d-id/1113100
Why Projects Fail. (n.d.). 101 Common Causes. Retrieved from http://calleam.com/WTPF/?
page_id=2338
Why Projects Fail. (2014, January 21). Avon Products. Retrieved from
http://calleam.com/WTPF/?p=6248
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