diff --git a/controllers/ocimachine_controller.go b/controllers/ocimachine_controller.go
index 1f8c8678..2c0596f2 100644
--- a/controllers/ocimachine_controller.go
+++ b/controllers/ocimachine_controller.go
@@ -391,6 +391,7 @@ func (r *OCIMachineReconciler) reconcileNormal(ctx context.Context, logger logr.
 		}
 		fallthrough
 	default:
+		machineScope.SetNotReady()
 		conditions.MarkFalse(machineScope.OCIMachine, infrastructurev1beta2.InstanceReadyCondition, infrastructurev1beta2.InstanceProvisionFailedReason, clusterv1.ConditionSeverityError, "")
 		machineScope.SetFailureReason(capierrors.CreateMachineError)
 		machineScope.SetFailureMessage(errors.Errorf("Instance status %q is unexpected", instance.LifecycleState))