Why Project Management Still Fails: Highlights from FMI’s 2025 Study
Key Takeaways
- Early involvement of project managers in estimating and planning significantly increases the likelihood of projects finishing on time and within budget.
- Structured, disciplined planning and mandatory field sign-off are key practices of high-performing firms that improve project success rates.
- Communication gaps between executives and project managers regarding financial forecasting highlight the need for clearer expectations and collaboration.
- The study advocates for proactive engagement, standardized processes, and clear ownership to close performance gaps in construction projects.
FMI Corporation, a leading provider of consulting and investment banking services to the built environment, today announced the release of part one of its 2025 Project Manager Study. The first installment, Why Project Management Still Fails, examines the root causes of underperformance and offers actionable insights for construction executives and project managers.
Only a small fraction of construction projects finish on time and on budget. FMI's new study reveals that early misalignment, inconsistent planning, and weak field buy-in remain widespread across the industry.
Based on responses from 243 executives and 84 project managers nationwide, FMI’s study examines why firms with sophisticated tools and processes continue to underperform. Just 2.5% of contractors report consistent on-time, on-budget completion. The findings highlight gaps between estimating, project management, and field execution — and offers practical steps to close them.
Early Involvement Pays Off
The study finds that early participation by project managers in estimating and planning significantly improves outcomes. Firms that involve project managers in estimating hit profit targets 78% of the time, compared with 55% when they do not. When field leaders co-own the plan before mobilization, 76% of projects finish on or ahead of schedule.
Yet two-thirds of executives report project manager involvement below 25% during estimating, leaving major assumptions untested. FMI recommends involving project managers early enough to validate productivity, procurement, and scheduling assumptions — but not so deeply that they lose focus on execution.
Planning and Field Alignment Define Success
Only 20% of executives describe their pre-execution planning as thorough, while 35% of project managers believe it is. This perception gap reflects the lack of a shared standard for what good planning looks like. FMI’s data show that firms with disciplined, structured planning processes meet or exceed profit targets 81% of the time.
Field alignment is equally critical. Companies that require field leader sign-off on plans before mobilization deliver on or ahead of schedule 76% of the time, compared with 58% for those that do not. FMI says best-in-class firms make this collaboration a mandatory step, ensuring every project starts with clear ownership and accountability.
Inconsistent Processes Still Erode Performance
Nearly 90% of contractors say they have a formal project management playbook but only 24% apply it consistently. The biggest gaps appear in change-order management, where firms with strong, consistent processes achieve 87% profit reliability versus 64% among less disciplined peers.
FMI also notes wide differences between how executives and project managers view financial management skills. Forty percent of executives cite major gaps in cost-to-complete forecasting, compared with only 8% of project managers — a disconnect that points to unclear expectations and communication breakdowns.
The Bottom Line
The study calls for early project manager involvement, structured pre-execution sprints, and field sign-off before mobilization.
The next installments in the series will explore what high performers do differently during execution (Part 2) and how the project manager role is evolving from task manager to business leader (Part 3).
Download part one of the report here.