Why Good Project Management Is Not Enough: Liabilities of Incumbency and Newness

A common view is that good project management is necessary but not enough to ensure project success. This begs the question: Why not? This paper examines current factor-, process-, and capability-based explanations of project performance and finds gaps in their explanatory power. An alternative explanation is developed from organizational learning and capability theory that integrates drivers for project success and drivers for project failure in one model. Project performance is modeled as the contested outcome of the two opposing drivers, enabling unpredictable variations in project outcomes. A key contribution of the model is the inclusion of drivers of underperformance and failure. These comprise common learning barrier conditions that can reduce or negate the performance value of organizational capabilities applied to projects. Two types of conditions are described: liabilities of incumbency and liabilities of newness. Together, these negative drivers can offset or overwhelm the positive effects of organizational learning on capability accumulation, creating a net performance liability, leading to underperformance or failure— even in well-managed projects. The performance model is illustrated using a longitudinal case study. The model improves our understanding of project performance as well as our ability to explain industry data on project outcomes and anomalous inconsistencies in performance in successive projects. Implications of the model are discussed, including how it might be used in practice. The paper argues from an information systems project perspective, but the model also has relevance to other application domains.