How to Pull the Plug on a Bad Project (Before It's Too Late)


Insights for ProfessionalsThe latest thought leadership for Management pros

Tuesday, July 20, 2021

It's crucial to look out for the common signs of project failure if you want to protect your business from risk and quickly move on to your next initiative.

Article 4 Minutes
How to Pull the Plug on a Bad Project (Before It's Too Late)

One of the secrets to success in project management is knowing when it's time to cut your losses and admit the initiative you're leading isn't going to work out.

It's crucial that this process is supervised and executed efficiently, to reduce the potential financial impact on the business, as well as the stress and disruption your workforce might have to go through.

A key responsibility of the manager is to look out for signs that a project is failing and to decide on the right time to abandon it.

Study demand

Large and complex business projects can take a long time to progress from inception to launch, and it's quite possible that, during this time, there will be significant changes in market trends, conditions and customer demand.

It's essential to keep a close eye on what's happening in your sector and to stay connected with customer needs, even when you're immersed in a project.

If it becomes clear that demand and expectations are changing, the focus and priorities of your project will need to change as well. The best course of action could be to abandon the project altogether, which is a decision that should be made with speed and confidence.

Create 'stop' criteria

Before embarking on a project, it's a good idea to establish criteria that will help you decide what action you should take at key points in the process, specifically whether you should stop or continue.

'Stop' criteria might include:

  • It’s become clear the project's objectives can't be achieved
  • There are signs that the final product will quickly become obsolete or the company won't be able to provide customer support for it
  • You've encountered technical difficulties that don't have a quick or affordable solution
  • You've lost key resources or skills that were essential to the completion of the project
  • The project is no longer relevant to organizational goals

Establishing these criteria and gaining company-wide agreement on the most important indicators of success or failure is a crucial early step in project management.

As soon as you identify one or more of your stop criteria, it's time to think seriously about whether you should continue or if the time has come to pull the plug.

Don't be afraid of late-stage decisions

Once you've made a lot of progress with a project and you're nearing the point of launch or completion, it can be easy to fall into the mindset of: "We've come this far, we have to see it through to the end."

But this can be a dangerous way to think. Writing in Harvard Business Review, Ronald Klingebiel, a Professor of Strategy at the Frankfurt School of Finance and Management, pointed out that attention often shifts to delivery as projects move into their latter stages. Stakeholders could be reluctant to ask questions and disrupt progress, even if there are clear signs that you're not going to get the results you're hoping for.

He stressed it's extremely important to know when the time has come to discontinue a project, "even if it's late in the game".

"A single late-stage project can prevent dozens of alternative early-stage ideas from being funded. Failing to update business cases near launch, and thus missing signals of failure, ends up disproportionately expensive." - Professor Klingebiel


Beware of 'decision paralysis'

Another piece of advice from the Frankfurt School of Finance and Management professor was to avoid falling into the 'decision paralysis' trap. When you're deeply involved in a project, it's easy to become so immersed in the daily minutiae of running it that you lose sight of the bigger picture and fail to make the most important decisions.

He highlighted the example of Sony Ericsson, having been involved in a decade-long review of the former smartphone handset maker and its challenges in this fiercely competitive sector. This study of the company's project management and decision making showed that it often spent a "disproportionate amount of time" discussing initiatives that showed a "clearly deteriorating" business case.

Sony Ericsson frequently postponed or revisited vital decisions, and instead of discontinuing projects and products that showed poor results, lowered expectations to make it easier for targets to be met.

Learning from these lessons and avoiding the same mistakes will help your business to avoid sinking unsustainable amounts of time and money into investments that won't generate returns.

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