Why projects fail? How contingency theory can provide new insights – A comparative analysis of NASA’s Mars Climate Orbiter loss

Abstract When important projects fail, the investigation is often focused on the engineering and technical reasons for the failure. That was the case in NASA’s Mars Climate Orbiter (MCO) that was lost in space after completing its nine-month journey to Mars. Yet, in many cases the root cause of the failure is not technical, but managerial. Often the problem is rooted in management’s failure to select the right approach to the specific project. The objective of this paper is to enrich our understanding of project failure due to managerial reasons by utilizing different contingency theory frameworks for a retrospective look at unsuccessful projects and perhaps more important, potential prevention of future failures. The evolving field of project management contingency theory provides an opportunity at this time to re-examine the concept of fit between project characteristics and project management, and offer deeper insights on why projects fail. After outlining several existing contingency studies, we use three distinct frameworks for analyzing the MCO project. These frameworks include Henderson and Clark’s categorization of change and innovation, Shenhar and Dvir’s NTCP diamond framework, and Pich, Loch, and De Meyer’s strategies for managing uncertainty. While each framework provides a different perspective, collectively, they demonstrate that in the MCO program, the choices made by managers, or more accurately, the constraints imposed on them under the policy of ‘better, faster, cheaper’, led the program to its inevitable failure. This paper shows that project management contingency theory can indeed provide new insights for a deeper understanding of project failure. Furthermore, it suggests implications for a richer upfront analysis of a project’s unique characteristics of uncertainty and risk, as well as additional directions of research. Such research may help establish new and different conceptions on project success and failure beyond the traditional success factors, and subsequently develop more refined contingency frameworks. The results of such research may enable future project managers to rely less on heuristics and possibly lead to a new application of “project management design.”