Killing Projects – All it takes is “Chutzpa” Part 1

Pity the cat: it only has 9 lives.  Some projects, however, have many more than that.  Chances are, you’re responsible for one or more of these; and a recent bit of research says that you should kill it. But do you have the “chutzpa?”  Don’t feel bad if you don’t, you’re in good company. 

 Consider this:  in 1970 RCA developed the first prototype of the SelectaVision videodisk player.  The result?  Many experts believed phonograph-like technology was obsolete and questioned why RCA based its new product on such a platform.  Seven years later, when all of RCA’s competitors had abandoned videodisk research given the improved quality and popularity of the VCR, RCA remained convinced that its SelectaVision product was going to be a hit.  They pressed on.  In 1981, and even when all the signs pointed to near certain failure, RCA introduced the product. The public was completely under whelmed.  Finally, in 1984, after investing $580 million dollars and 14 years of research effort, RCA realised that the product was going nowhere and terminated the project.   

 Why was RCA so seemingly oblivious to all the warning signs that they had a failure on their hands? And, why did RCA wait so long to kill this project?  

 In Why Bad Projects Are So Hard to Kill[1], Dauphine Royer, at the University of Paris, that there was a “collective belief” system operating at RCA that simply prohibited the people involved in the project to consider the idea the product was going to be a commercial flop. In other words, they fell in love with their project, with the technology, with the very idea that they could somehow persuade even their harshest critics that the SelectaVision was worthy of the recognition they felt it deserved.  Due to the strength of their own convictions, and evidently not wanting to be seen as failures, they ignored every warning sign they past for fourteen years.  But time and public disapproval of their product (based on lackluster sales) caught up with them, and they finally faced reality. 

 Are you passing—and ignoring—the same kinds of warning signs the engineers at RCA past by?  Do you even know what those warning signs are?

 We do projects for many reasons: increase revenue, avoid costs, increase efficiency, accelerate product development, increase customer satisfaction, and improve productivity, among other purposes.  Ostensibly, we develop a justification for a project based on a combination of intangible and quantitative factors, compare prospective projects to one another, select that project with the best return, assign a project manager (hopefully!), and begin work.  In many organisations that’s the last time we ever look in any detail at the business case to see if the project will, in fact, return to us what we thought it was going to.

 Thus, the business case represents a baseline in much the same way that we have technical, cost and other baselines against which to measure our progress.  The business baseline, or “value baseline” as I call it, is in fact, the most important benchmark to us as executives.  Why? Because if the project cannot return the business value justifying our investment in time and money, we simply shouldn’t be doing it.  At the very least, we should revise what we’re doing based on the changed circumstances.  Doesn’t it make eminent sense to continue to compare our progress on each project against its “value baseline?”  We’re not paid as executives to think up or even execute projects.  We’re paid to increase the business value of our enterprise whether it is in the profit or non-profit arena.

 In most organisations it’s tough to kill projects.  It was tough to kill Dracula too.  You needed a silver bullet or a wooden stake, and if you had both, all the better.  Killing projects means we’ve failed, and for the “just do it,” “can do,” “just get it done” culture of project management, failure, it seems, is not an option. 

 We need to turn this thinking on its head.  What if, for example, we actually rewarded people for killing projects?  What if, every time we held a review meeting the first item on the agenda is “Why shouldn’t we kill this project?”  Interestingly enough, some pharmaceutical companies with whom ESI works do just that.  When you’re spending an average of $800 million and consuming eleven years worth of company resources to launch a drug, it certainly pays to ask that question on a regular and continuing basis.[2]

 So, when should we “pull the plug” on a project?  When you are faced with at least one or more of the following three conditions.

 1. The business objectives can’t reasonably be met within time, cost, and resource constraints identified at the outset.

 2. Other alternatives have a better return on investment

 3. The business objectives (i.e., project objectives) have been OBE (overcome by events)

 In my next posting I will offer examples for each of the above.

[2] Based on research conducted by the Center for Drug Development at Tufts University.

Tags: Business Case, Customer Satisfaction, PMO, Product Development, Project Management, Project Management Office, Projects, Warning Signs