Focusing on PM tools is a symptom and not the cause of a failing company. When a company is focusing on things like PM tools, they are avoiding working on the project because they either a) do not know what to build or b) how to build it.
Agreed, many times over! I'll go further and saying that I've seen some times when a focus on purely processes & project management (not just the software) can really bog down a team. If you're so worried about finding the "perfect process", you'll never get anything done. Whether it's putting together code style guidelines or information flow processes, sometimes it's best just to move forward and use common sense. I understand that it can fall apart, especially in a larger company, but in a startup environment, I find it especially frustrating when a company has weeks worth of meetings to decide the best way for a specific process to go. Sometimes things just need to be done.
Absolutely, or there's a focus on process rather than real decision making. Either there's no clear leadership or people are passing the buck in lieu of making a call that might turn out to be wrong in the long run. When you're a small company that's suicide.
Alternately, it may be that they c) do not know how to evaluate team members.