Is it Time to Pull the Plug on that Project?
Is it time to cut your losses? That's probably one of the hardest decisions senior executives have to make. Yet some corporate initiatives have an incredible power to suck up money, time, and even careers while seemingly producing nothing in return.
These black holes grow bit by bit through a process popularly known as "escalating commitment to a failing course of action"-a phrase most often associated with the Vietnam War. The challenge for managers lies in knowing when a big over-budget project deserves more resources and when it's time to pull the plug.
In a paper published in the California Management Review, Mark Keil, a professor at the J. Mack Robinson College of Business at Georgia State University, and Magnus Mähring, a professor at the Stockholm School of Economics,explain the signs that a project has crossed over from merely unwieldy to black hole territory. While the duo are specialists in information technology, Keil says, "I have no reservations saying these steps apply to other types of projects."
Over more than a decade, Keil and Mähring have conducted in depth surveys of 579 information technology auditors and published case studies of four large IT implementations. Drawing on that research, the current work describes the three tell-tale signs of "black hole" projects:
1. The Drifting Stage
Drifting occurs when a project begins without any real agreement about what it is supposed to accomplish. Keil and Mähring equate this to beginning a journey without a clear destination, or having a destination but no map. If you can answer yes to any of these questions, your project is either beginning to drift or in serious danger of doing so.
- The project has been going on for some time without consensus among key stakeholders regarding its objective(s).
- The project has been going on for some time without agreement on how to best achieve the project objective(s).
- Although considerable time and money has already been spent, there are few, if any, deliverables to date.
- Work continues in spite of a vague or ambiguous project charter.
- There are unresolved conflicts regarding the goals and direction of the project.
Here's where folks get in deep: Project managers essentially begin to treat symptoms without realizing that the problems may be interconnected and unresolvable. Treating these symptoms, of course, eats up time and money while doing little to move the project forward. Here's how to tell if you're treating symptoms:
- Project-related problems are being addressed in a superficial way.
- As soon as one problem is solved, another emerges.
- Each problem is described as isolated from others and is treated independently.
- Actions taken to solve problems constitute minor adjustments or "quick fixes."
- Problems are seen as fixable without a need to review or reconsider the project goals or direction.
At this point, the managers typically try to explain away past troubles, saying the problems have been solved and the path ahead is now clear. Given all the money that's already been spent, they argue, it would be folly to quit now. They also claim that every other course of action would be worse. Here are the signs that you're rationalizing continuation:
- Proponents of the project keep coming up with new reasons why it must be completed
- Experts have been enlisted to 'evaluate' the project, but they may be motivated to advocate for its completion
- A growing number of people outside the project are raising doubts about the wisdom of continuing it
- As projected costs rise, experts portray the alternatives, and project abandonment, as even more costly or problematic
- Despite growing recognition that the project is in a troubled state, the prevailing assumption is that pressing ahead will eventually bring the project out of the woods.