This article is a follow-up to an article that I published last fall (Killing a Project) that discusses what to do when pulling the plug or canceling a project, regardless of its size. Now I am going to concentrate on how to pull the plug on major projects, which is a difficult decision requiring complicated and objective evaluations.
Few companies want to admit that a large project is failing. Sometimes major projects will never meet their goals or deliver the expected results. When the possibility of success is gone, these projects should be canceled for the health of the corporation. Let us look at some major U.S. projects that were canceled, some reasons behind why the project was killed, and what we can learn from them.
Time and Money
Sometimes project costs keep ballooning with no end in sight. This can happen when there is a lack of understanding of the project, whether with the project goals, scope, objectives, or the cost and timeline itself. For example, the scope keeps growing with little or no control which stretches the timelines and the credibility of the project. Also, not every organization has the necessary resources to complete a project on time to meet market needs.
In 2001, California decided to implement a Case Management System which was intended to automate trial court operations across the state and replace seventy legacy systems. This original project’s budget was expected to cost $260 million and after spending $500 million, it was decided by the court officials the new price tag would be $2 billion if the project runs to completion. Since the state was going through budget cuts and layoffs, the project was canceled in 2012. Although the project seemed promising, the initiative had been plagued by poor management and lousy planning. Hopefully, California can salvage and reuse some parts of this system and has learned some lessons from its’ court’s massive software project on handling future IT-related investment projects.
Sometimes so-called brilliant ideas have nothing to do with their overall business. As a leading name in toothpaste and dental hygiene, Colgate had the bright idea for product diversification in the 1980s, introducing a line of frozen dinners (Colgate beef lasagna, anyone?) to go alongside its existing range of products. They hoped to capture the growing market for ready-to-eat meals. Unfortunately, people could not get past the close association of the Colgate name with minty, refreshing toothpaste. The food line (or brand extension) really did not take off, and Colgate decided to stick to what it does best. As you can see, product diversification can be a risky bet and not an uncomplicated undertaking.
An organization might have a great idea that is part of their business strategy, but nobody is interested in the product. In 1957, the Ford Company introduced the Edsel to directly complete with GM’s Oldsmobile brand. It did not take long before Ford recognized it had made a costly mistake. Finally in 1959, Ford decided to pull the plug on its’ Edsel model which started out as a promising idea that had gone bad. It could have been because of awful styling, quality, sticker shock and/or lack of internal support. The same can be said for most projects that struggle – there is seldom a single reason a project fails. Scrapping a project is difficult for most project managers and the team’s morale can suffer from this.
There are dozens of project templates available for distinct categories of projects to consider, but I have never seen a project template for canceling a project. If you think about it, you need at least a plan in place to cancel a major project. The plan would cover many steps and activities like:
- Informing key stakeholders
- Consulting with legal and HR departments.
- Identifying the usable components of the project that could be salvaged.
- Collecting the lessons learned.
- Reassigning team members and resources.
- Planning for associated expenses like contractual obligations for hardware, software, and/or services.
- Addressing all questions and concerns of stakeholders in the cancellation announcement.
- Managing the impact of the cancellation on the organization.
As you can see, killing a major project is hard to do and occasionally it is much harder to kill a project than to launch a new one. On the plus side, the deconstruction process can be a great learning opportunity for any project manager that can be helpful on future projects.
Your thoughts in the comment section below are welcomed.
Webinar Replay: Lessons Learned – A Tool to Improve Future Projects
To say that killing a major project hurts morale is an understatement, it can have devastating effects for many years. To the extent that management is “scarred” and starts to question future projects in an unhealthy way.