Edinburgh Trams Project Failure
By Boniface Okanga and Jennifer Davis-Adesegha
London, United Kingdom, 24 June, 2024.
Project failures are some of the major risks that most of the contemporary organisations often strive to avoid. As the case of Edinburgh Trams Project Failure indicates, project failure causes the loss and wastage of enormous resources. Whereas for government entities, project failures can affect public confidence and trust, in the private sector, project failure can even if it is just an isolated case affect corporate brand image. It can damage the brand image and reputation of the business built over the years. Just like the Edinburgh Trams Project Failure that has affected the reputation of the Scottish government; that implies in the event of project failure, a well-crafted public relation management strategy must be introduced for managing and mitigating the damaging negative image that may be associated with the organisation going into the future. When Coca-Cola tried to introduce its New Coke to replace the Coke brand which the global consumers had known for decades, New Coke’s failure caused damaging reputation as the global consumers tried to find answers to the mysterious reasons why Coca-Cola was trying to replace a well performing drink brand that they had known and drunk for decades. The same also applies to public projects, for the reason that when a public project fails even those who had been instrumental for dramatizing how it would be a game-changer will attempt to disentangle themselves from having been in anyway whatsoever involved in the project’s implementation.
Such a situation is reflected in the conceptualisation and implementation of the United Kingdom’s National Health Service’s Information Technology System. During the planning and conceptualisation stage in 2002(Baumann, 2021), the UK’s National Health Service’s National Program for IT which is also known as NPfIT was projected to be the UK’s largest project ever that would transform and revolutionise the nature of healthcare management and operations. NPfIT was anticipated to improve the efficiency of UK’s public healthcare operations to a level never imagined before.
In effect, all the big players like Fujitsu, CSC and Accenture scrambled to be part of the project as Tony Blair, the UK prime minister at the time stood up with pride to announce the launch of the project in 2002. But as it turned out nine years later that NPfIT would fail due to the over-ambitiousness of the plan, poor stakeholder management and other implementation challenges, all those who had scrambled to be part of the project vanished into thin air. Managing the damaging reputation from the NPfIT’s failure that cost the British taxpayers over £10 billion had the later governments distancing themselves from the project and blaming the ambitiousness of the plan and poor conceptualisation of the project on Blair’s government. In that context, even if it is not a government project, any project can fail even if it has effective management in place. Any project can fail not just because somebody has messed up with the fundamental project management principles that we learnt from Business Schools, but also because of:
- Pre-Existing Market Assumptions
- Over-ambitiousness and Projects’ Politicization
- Poor Innovation
Each of these reasons for project failures is evaluated as follows.
Pre-Existing Market Assumptions
Even when the project has everything necessary for ensuring its success, it can still fail not because the project does not have the necessary resources, but because of pre-existing market assumptions that turn out to be misleading. For business related projects aiming at launching a new product into a new market or to extend a business’ operations in a new market, pre-existing market assumptions can often emerge as one of the major causes of the project’s failure. Pre-existing market assumption can obscure the capabilities of the business executives to evaluate and respond to all the details of the market dynamics. This affects the success of the new product’s market launch.
Sometimes, the business executives may blame the market researchers for producing misleading market information. However, the truth is often not the misleading market information, but the false assumption that some of the executives have about the market to prompt taking actions that should have not been undertaken. Even if market research and analysis are undertaken, pre-existing market assumptions will always affect the capabilities of the business executives to take note and respond to certain new facts that are emerging from market research and analysis.
Pre-existing assumptions connote the executives’ belief and understanding of how customers will behave in the event of the introduction of a particular product. It connotes the capabilities of the business executives to believe and trust their instincts and inner voices that when a particular product is introduced, the customers will either abandon the existing products for the new ones or that the customers will stick with the existing products to cause the failure of the new product’s market launch. Either way, pre-existing market assumption can affect the capabilities of the business executives to approach a particular market with open-mind that thoroughly evaluates and considers all the details that the market research and analysis are revealing.
In the event where the business executives have a strong pre-existing assumption about a particular market, even the outcomes of market analysis tend not to matter. Market research and analysis can reveal that the customers may not prefer the product, but the business may still continue with the product’s development and launch. The end result is often the introduction of the product that fails to attract the desired market performance. If the business executives do not have false assumptions about how customers will behave, they can easily have false assumptions about how the potential competitors may react to the new product’s market launch.
Pre-existing market assumption is often drawn from the business’ experience over the years. Such assumptions are often quite essential for motivating and energizing the business executives to think and take bold actions that change and transform the business’ overall effective market performance. It reflects the realities that business managers think would explain the prevailing market trends. It is often drawn from the business’ years of experience and understanding of the market.
Unfortunately, it is also such pre-existing deep experience and understanding of the market that has often been an hindrance to thorough market analysis. If the assumption is that the market is dynamic and constantly influenced by various changing forces, then such assumption will also influence the emergence of a business philosophy that emphasises in-depth market research, analysis and interpretation before any actions are undertaken.
But if the assumption is that like the market is static and the customers or competitors will also behave in particular way due to some of the factors that the executives misconceive to be static, then, such assumption will turn into a barrier to effective market analysis and interpretation that considers all the details. In a bid to edge out Coca-Cola from the global soft drink market, Pepsi introduced its Pepsi Crystal project that sought to create and deliver Pepsi Crystal which is as clear as water (Swierk, 2024).
The motive of the introduction of the water-like Pepsi Crystal was to position the product as healthy and caffeine-free to take advantage of the emerging concerns from the health conscious consumers who were increasingly questioning the health benefits of consuming Coca-Cola products (Hirsch, 2024). In effect, Pepsi Crystal was introduced in 1992 on the assumption that it would immediately catch the attention of such global consumers who would catalyse the situation to influence the attraction of other customer segments. Such assumption worked as Pepsi was able to initially gain about $470 million from just the sales of Pepsi Crystal.
Though Pepsi’s assumption about the expected consumer behaviour was right, it was not the same for the behaviours of the competitors. Upon realizing the initial success of Pepsi Crystal, new rivals emerged to copy the idea and introduce even better versions of the pure water look-a-like soft drinks such as Sprite and 7Up. Pepsi had assumed that having a colourless water-look-alike drink would attract health conscious consumers even if the drink did not actually offer any health benefits. But that turned out not to be the case since further customers’ interactions with the product found Pepsi Crystal to be bland and lack taste or flavour(Hirsch, 2024). As it was such weaknesses that its rivals like Sprite and 7Up used during market launch, Pepsi Crystal subsequently failed and vanished from the market. This not only explains how false market assumptions can cause market failures of certain business projects, but also how market research which is not accompanied with the recognition and analysis of all the details can lead to project failure
Why Crystal Pepsi Was A Total Flop
If Pepsi had followed up to assess how the customers were interacting and interpreting the tastes of its Pepsi Crystal, it would have taken actions to deal with the tastes and flavour issues that the customers were expressing dissatisfactions about. Cases of false market assumption leading to business project failure are not only depicted in Pepsi Crystal project, but also in the case of Ford Edsel. With deeper understanding and experience in the global car-making industry, Ford invested $250 million in the development of Ford Edsel in 1957, with the hope that it would catch the attention of the middle class. With this strong belief and assumption about the market, Ford even ignored the market research data that indicated that Ford Edsel would not perform well against its rivals.
When Ford Edsel was subsequently introduced in the market, it was not the executives’ assumptions about the market that were confirmed, but the market research data. Most of the middle class Americans whom Ford had hoped to sell the cars to, started avoiding Ford Edsel in favour of the alternatives. Reason being that the consumers found Ford Edsel to be unattractive as compared to substitute car models from rivals.
Ford Edsel was also further disadvantaged by the discoveries that found it to have oil leaks, trunks that could not open and stuck hoods. Combined with the other unattractive features, this affected the overall customer trust and confidence in Ford Edsel. Subsequently, Ford Edsel project failed to cause the loss of $350 million. Though Ford Edsel case may not represent an accurate illustration of how pre-existing market assumptions can cause project failure, the precise spectacular case of how pre-existing market assumptions can instigate a project failure is reflected in the Airbus A380 Case.
Basing on a strong belief and not factual-based market research that airline operators and the airline industry would in general embrace bigger aircrafts, Boeing spent over $30 Billion on the development of Airbus A380. Airbus A380 is the world’s largest aircraft ever built by Boeing. Unlike Boeing 747 that carries just upto 150 passengers, Airbus A380 carries upto 853(Sohail, 2022). Of course from the assumptions based on some market research and forecasting, Boeing had concluded that as the world gets more integrated, mass travels of the population would increase across the globe. In the quests of the global population to travel for various tourism adventures, business operations and other governmental and non-governmental activities, Boeing predicted that the demand for larger aircrafts would surge.
As airline operators would demand larger aircrafts to minimise the costs of operating several smaller aircrafts and Boeing 747s, governments that run airports would also seek to encourage the use of bigger aircrafts to minimise air-traffic congestions arising from the use of numerous smaller aircrafts. Boeing also predicted the increasing usage of Hub-and-Spoke Model where smaller aircrafts would fly from remote less popular airports to major hub airports and then from the hub airports to other remote and less popular airports. According to Boeing, the prediction was that such a trend would create a lot of business for Airbus A380 in the major hub airports.
Unfortunately, such assumptions turned out to be false as Boeing’s introduction of its Airbus A380 having double decks meant that the airport management authorities or governments also had to increase the airport gates whilst also upgrading the runways and other facilities to manage bigger aircrafts. The costs of such upgrades were passed by various governments to the airline operators using larger aircrafts like Airbus A380. This increased the overall operational costs to discourage the airline operators’ appetite for using bigger aircrafts like Airbus A380. Initially, Airbus A380 sold about 1200 units and generated about 251 orders, of which Emirates Airlines took about 123 of the 251 orders (Sohail, 2022).
But from its usage by the likes of Asiana Airlines, British Airways, Emirates, China Southern Airlines, Lufthansa and Etihad Airways, it was discovered that Airbus A380 is too big to require a lot of time to get all the seats filled before takeoff. Given the fact that most of the air travellers place considerable importance to time, Airbus A380 was considered less preferable for delighting customers’ flight experience. Compounded by the fact that of all the airports around the world, Airbus A380 could only land at selected 140 airports that had upgraded their gates and other facilities to suit the handling of bigger aircrafts like Airbus A380, most of the airlines abandoned Airbus A380 in favour of either Boeing 747s or 737s or any other forms of rival smaller aircrafts like Concord, Bombardier.
Technically, Airbus A380 does not have any deficiencies. It offers the best smooth flight experience since it is often not much affected by turbulence and storms to cause bumpy rides like it is the case for smaller aircrafts. In effect, Airbus A380 was adopted by some airlines as a marketing strategy aimed at demonstrating their commitment to improve air travel experience. But its usage was still found to induce inefficiencies. Since Airbus A380 runs on four engines, it was found to use a total of 10800 litres of fuel per hour which is double the fuel used by Boeing 747 that uses 5400 litres per hour. This higher fuel consumption combined with the fuel scarcity arising from the Post-9/11 War in the Middle East meant that most of the airlines could not afford to profitably use Airbus A380.
Initially, these caused most of the airlines to avoid purchase and usage of Airbus 380, but the changes in trends that swept Airbus A380 to the scrap yard was the Covid-19 Lockdowns and travel bans that affected global air travels. Followed closely with the emergence of Russia-Ukraine War that caused fuel scarcity and subsequently increment of aviation fuel prices, it is only Emirates that retained Airbus A380 amongst its fleets. But of recent, Emirates has also discontinued half of its Airbus A380 usage to not only send Airbus A380 to the scrap yard, but also to so far render it one of the most spectacularly failed aviation projects in aviation history. As these illustrate how false market assumptions can affect successful project conceptualisation and implementation, the other instigators of failures can also arise from the project’s over-ambitiousness and politicization.
Over-ambitiousness and Projects’ Politicization
Over-ambitiousness and politicization of certain projects can affect the successful implementation of the project. This can lead to its failure. In some of the cases, some of the projects are introduced not because the market or even the business itself needs it, but because the project is aimed at intimidating rivals and competitors that the business is operating at another level. This often causes poor conceptualisation that pays little attention to all the details of the factors that must be factored as well as the risks that must be avoided. Yet as some of the essential key success factors are ignored, it often causes the failure of the project.
In some of the cases, the over-ambitiousness and politicization of the project can arise from the quests of the industry leaders to emerge and launch a particular product before the major industry players are able to do so. It could also arise from the quests of the industry leaders to strike fear and send a message to rival companies that any form of attack will be met with more devastatingly aggressive retaliations. Unfortunately, even if some of such projects often succeed, most of them also often fail. This is because of the haste and fastness of the speed at which they are conceptualised and implemented to attain some of the political deadlines. This affects the evaluation of all the details as well as usage of back and forth thinking and re-thinking which are often quite essential for enhancing the successful implementation of more complex projects. Such facts are echoed in Apple’s Apple Watch Development Project.
Apple Watch is a smartwatch that integrates and synchronizes with several wireless telecommunication technologies as well as health-oriented and fitness tracking capabilities for those who could be having some health challenges. Though initially, Apple Watch had been regarded as a failure for being based on the poor understanding of the values that the consumers in the global electronic segment desire, Apple has still made significant improvements to introduce the Second Generation Apple Watch. The Second Generation Apple Watch operates in sync with the consumer’s iPhones, Wi-Fi network, audio and video streaming. It is also used in sync with smartphones for making and receiving phone calls. Apple Watch is part of the signal innovation projects aimed at keeping competitors at bay, but it is widely regarded as the project that will fail if it has not yet failed anyway due to poor recognition of the fact that 99.9% of the global consumers no longer wear watches (Slate, 2014).
Ever since through component innovation, the innovators integrated watches and even clocks in cellphones and smartphones, most of the global consumers no longer seem interested in wearing watches. It bothers and even if it is for showing off due to its gold value, it can attract thieves to induce risks that affect one’s security, safety and wellbeing when in public places. Combined with the fact that though Apple Watch introduces a more sophisticated technology, it does not have any unique value that it offers. Attempts to make Apple Watch to offer unique values are reflected in the attempt to make it be used for tracking health status and sickness. Attempts are also made to enable the making and receiving of calls via Apple Watch. However, unless another invention is made to create more unique values, most of the consumers feel that such are not the unique values that can render Apple watch preferred and purchased by various consumers around the world. Apple Watch Series 9 and Ultra 2 models that measure blood oxygen reflected some of the unique features that Apple Watch was offering. However, with Mazimo, a US medical technology company successfully claiming patent rights’ violations in the US courts, the legal ban on Apple Watch Series 9 and Ultra 2 models that measure blood oxygen means that Apple Watch no longer has any unique values or features that it offers.
Why The New Apple Watches Are Banned
Besides its pricey costs of $350(Slate, 2014), Apple Watch also faces limitation arising from the requirement of having an iPhone for a consumer to use the Apple Watch. Since iPhone requirement leaves the usage of Apple Watch just constrained to Apple product users, one wonders why Apple Watch was developed in the first place. Such over-ambitiousness leading to project failures is not only evident in the private sector, but also in public projects like NPfIT. Just like any other public project, Baumann (2021) reveals that with NPfIT being the pioneer healthcare digitisation project in the UK(Baumann, 2021), its fundamental objectives were to integrate the advance usage of information technology as well as automated and digital systems in the operations of the UK National Healthcare Services (NHS). These would lead to the development of electronic patient records, computerized patients’ referral system, virtual choose and book system and computerized prescription system.
Through the successful implementation of NPfIT, the Labour Party aimed to hit two birds with one stone by offering the best healthcare services whilst also wooing voters. It is such highly rated political impact of the project that caused its politicization and subsequently failure. To score political points, the politicization of the project caused the haste approach to NPfIT’s implementation. For the reason that the politicians were more concerned about scoring the political objectives of the project, some of the critical analysis about the project’s feasibility was not conducted. Effective stakeholder analysis and management were ignored only to return to later haunt the project’s successful completion as criticisms emerged from all sections and stakeholders like the opposition Conservative party, civil society and the media.
Instead of doing preliminary analysis to discern the complexities that would arise from the project’s implementation, immediately after the announcement of the project, NPfIT implementers quickly moved in to introduce new policy changes as well as procurement strategies. This affected the creation of the foundation that would influence the successful NPfIT implementation. As some of the critics note that NPfIT was mainly implemented by politicians, some argue that as most of the critical steps for IT system development was not followed, users were also not involved with the effect that the system was not tested. It subsequently emerged later that NPfIT had enormous functionality issues that did not meet users’ needs and demands either from the medical personnel’s perspectives or from the general public and the patients’ perspectives.
Later quests of ensuring that NPfIT meet users’ requirements led to constant changes and modifications and re-modifications that affected the capabilities of the project to meet the designated completion timelines and schedules. The effect is that by the time alarm was raised about the likely failure of NPfIT project, it had already caused the wastage of resources and the British taxpayers’ funds to the tune of over £10 billion. Just like any other public projects where there is often heavy involvement of the politicians, NPfIT was found to have been conceptualised and implemented by the politicians. Since it was conceptualised and implemented from outside the National Health Services (NHS), it affected the initiatives of getting the NHS ready and prepared for ensuring the successful NPfIT’s implementation. Lack of readiness and preparedness can affect the successful project implementation. In effect, the poor engagement of NHS meant that NHS was not ready and prepared to offer the desired project leadership, direction, resources, budget, training and management to ensure NPfIT’s successful implementation.
37 Why do some projects fail despite having risk management processes?
These suggest over-ambitious and the project’s politicization can obscure the effective utilisation of the essential project management principles and competencies to undermine the successful project implementation. Yet, from theories, it is evident that effective project management enhances the successful project implementation. It influences effective evaluation, identification and mitigation of the risks that can affect the project’s successful implementation. Effective project management enables the accurate analysis of the nature of the project. This influences not only the discerning of the complexities of the project as well as the resources required for enhancing the project’s successful implementation, but also ensuring that the project is completed within the designated time-frames and budget.
For project consulting agencies, this delights clients to bolster the firm’s overall improved brand image. Such a view echoes the conventional definition that indicate project management to connote the strategic process of analysing, planning, organising, controlling and leading the process of a project’s implementation in the way that enhances the attainment of the desired strategic goals and objectives. Project management improves the effectiveness of project planning and scheduling of all the required activities that must be accomplished to influence the attainment of the desired deliverables.
As an over-ambitious project, Maughan (2010) notes that the major failure of NPfIT arose from its larger scale inducing technical and operational complexities, stronger usage of top-down approach at the expense of bottom-up, limited flexibility, technical limitations, delays causing cost overruns and unwarranted political interference. Besides that, the other challenge of project failure can also arise from poor innovation affecting the capabilities to conceptualise and deliver the best project.
Poor Innovation
Some say it is poor innovation that affects the successful project conceptualisation and implementation. It is through innovation that the project developers and implementers are able to conceive and figure the best design features, functions and processes that must be integrated in the project implementation processes. This enhances effective thinking and re-thinking for the required modifications to be undertaken to influence the effectiveness of project implementation. But such effective innovative capabilities can only be realised if the business or even the government entity has in place enough financial resources, technology, skills and competencies to engage in the usage of unique actions that also produce unique outcomes.
Unfortunately, there is often a challenge of seamlessly combining such strategic value creating resources to create and deliver unique values that aid the attainment of the desired unique outcomes. Possession of all the required resources and technological capabilities improves the ability of the product developers to create and deliver unique values to influence the success of project implementation. Adoption of a more innovative process of project implementation requires not only the top project engineers and leaders to be innovative, but also to encourage the entire project implementation team to be innovative. This is often a challenge for the reason that to create a barrier of respect between the top, middle and lower management, the project management system often explicitly or implicitly creates the barrier that suggest where the lower and middle management can stop.
Attempts to cross the created barriers are interpreted as acts of insubordination that can cause termination of employment. Creation of such a system limits the freedom of the employees to freely interact and engage with each other during the processes for the accomplishment of certain project activities that may require high levels of interface and engagement of the top management by the lower managers to influence the successful project implementation. Yet, as project employees are not free to freely interact and collaborate vertically and horizontally, it also undermines the successful project implementation.
If such organisational culture management issue is not the challenge, the challenge can arise from the pure lack of know-how to be creative and accomplish project activities in the way that creates unique values to displace rivals from the market. Technological deficiencies can affect the capabilities of the project engineers to conceptualise and emerge with novel project design, features and attributes that can render it a success. Values of technological know-how in enhancing the success of project implementation are reflected in the BlackBerry Storm-iPhone case (Maiorca, 2023).
When iPhone launched the introduction of the first smartphone setting in the era of smartphone usage and the end of button-phone usage, BlackBerry responded by creating and introducing the BlackBerry Storm. The creation of the BlackBerry Storm was inspired by the undermining statement that Steve Jobs directed to the likes of BlackBerry during iPhone’s market launch in 2007, in which he stated that “phones like the BlackBerry or Palm Treo “all have these keyboards that are there whether you need them or not to be there, and they all have these control buttons that are fixed in plastic.
And as such, they’re unable to adapt to specific applications or user interfaces”. As this famous statement market the beginning of touchscreen only iPhones and later other types of smartphones, it also indicated the end of the hardware button phones. In effect, BlackBerry responded in 2008 to the challenge posed by iPhones by creating and introducing the BlackBerry Storm (Gartenberg, 2022). The BlackBerry Storm was the only smartphone that ever attempted to create the interface between touchscreen and pressable buttons. In the initial days of its launch, the BlackBerry Storm performed relatively well. BlackBerry introduced the BBM that revolutionised the instant messaging innovation landscapes and devices that assisted to speed up smartphones’ evolution to what is today known as the portable mini-computers.
The Downfall of BlackBerry : What Went Wrong?
But as more and more consumers adopted it and more newer and newer versions of smartphones and iPhones hit the market, the global consumers soon realised the BlackBerry Storm’s technical and operational deficiencies. In the first instance, BlackBerry Storm had difficult to use keyboards and more unresponsive touchscreens that took long and wasted time to respond. Compared to the emerging iPhone versions at the time, BlackBerry Storm had a technological disadvantage as compared to iPhones.
Though it was such technological disadvantages that started to explain BlackBerry Storm’s poor market performance, BlackBerry still stuck with its “BlackBerry Operating System”, which as compared to Apple and Android devices limited the number of apps that consumers could use. Combined with the tendencies of BlackBerry Storm to freeze and remain quite slow, BlackBerry attempted to increase the number of apps on its apps store, but it was too late to reverse the damage that had been done to send the BlackBerry Storm project to failure (Maiorca, 2023). BlackBerry Storm Project’s failure arose from poor innovation and technological deficiencies of BlackBerry to respond to the Apple’s innovation and technological superiority.
In a nutshell, all these depict some of the pitfalls that must be avoided if project engineers and managers are to engage in successful project conceptualisation and implementation.
References
Alexandra, A. (2015). BlackBerry Storm Called One of the Biggest Failures in Smartphone History. London: Softpedia.
Baumann, B. (2021). Lessons Learned from the NHS IT System Failure. Colorado: Panorama Consulting Group.
Gartenberg, C. (2022). The BlackBerry Storm showed why you should never turn a touchscreen into a button. New York: The Verge.
Hirsch, J.B. (2024). Snatching Defeat From The Jaws Of Victory: The Crystal Pepsi Story, New York: The Right Brain Studio.
Maiorca, D. (2023). The 3 Reasons BlackBerry Failed Spectacularly—and Why They Might Rise Again. https://www.makeuseof.com/the-reasons-blackberry-failed-spectacularlyand-why-they-might-rise-again/
Maughan, A. (2010). Six reasons why the NHS National Programme For IT failed. London: Morrison & Foerster (UK) LLP.
Slate, C. (2014). 5 reasons why the Apple Watch will fail. London: TechRadar.
Sohail, W. (2022). Why the Airbus A380 Was Not A Success. London: Travel-Radar.
Swierk, A. (2024). The Untold Truth Of Crystal Pepsi. London: Mash. https://www.mashed.com/837894/the-untold-truth-of-crystal-pepsi/
Authors:
Boniface Okanga is a Professor of Innovation and Entrepreneurship as well as a Research Associate at The Business School, Edinburgh Napier University-Scotland, United Kingdom. Okanga is also a former University of Johannesburg’s Associate Professor of Innovation & Strategy. E-mail: boni@cloudanalytika.co.uk
Jennifer Davis-Adesegha is an International Banker, Specializing in Bank Risk Analysis, Modeling and Crisis Management, working for an International Bank in Barbados, the Caribbean. Jennifer is also a Research Associate at Cloud Analytika-London-UK. E-mail: jdadesegha20@gmail.com
