Nowadays, scholars and researchers emphasize the role of Knowledge Management and Intellectual capital in a modern society and their influence in an economy. Intellectual capital creates new ideas how to use the restricted resources in the best way to gain the competitive advantages and be profitable. Knowledge management helps to establish an environment of creation, development, transfer and share intellectual capital. At the same time, some companies and enterprises do not use the latest theoretical and practical achievements in the fields of knowledge management and intellectual capital. Purpose -To study the objective reasons of knowledge management failure in companies in general analyzing case studies of failure and present a framework in which the failure factors are linked to the different stages in the cycle of KM implementation (provided by P. Akhavan and A. Pezeshkan). Design/methodology/approach - Data for research was collected from authors own working experience in a real business. After a detailed study -Applying grounded theory method -The results categorized and analyzed in precise stages of implementing KM systems indicating the main failure factors. Findings -Through analysis of case studies, two main results were achieved. First, the main critical failure factors of KM projects were identified. Second, identified factors were traced along the KM implementation cycle showing how different failure factors may effect in each specific stage of the KM cycle. Research limitations/implications -The results of this research are based on cases from author's work experience meaning that for other cases the conditions and results may be different. Practical implications -The findings are combined into a framework of failure factors in KM projects. Based on it, practitioners may apply the strategy how to avoid factors or decrease the number that lead to the passing of KM systems in each stage of the KM project development cycle. Originality/value - Due to the fact the organizations do not publish proper reports of failure in their projects because of their policies, the image of their organization, and privacy, we provide and analyze the real examples of Knowledge Management Implementation.