Killing a Project: Who Decides?

Starting a project is easier than killing one and while no one likes to see a project die, there are some realities around the potential for success that means we have to ask the hard questions about viability and priorities.

A stitch in time saves nine. It’s an age-old saying that has long lost its maritime origins, however in today’s project landscape, it has never been more relevant.

If French sailors in the 1700s understood that the last stitch made the difference between getting something right from the start than having to fix a bad situation that’s out of control, then we think today’s project managers can apply the same logic before a project starts to underperform or fail.

We have a saying at Quay that “it’s much easier to start a project than to kill one” and we see this so often that our Assurance team designed a start-up review process to allow for early intervention and remediation before too much emotion and dollars get invested into a project sailing in the wrong direction.

Too many projects are allowed to progress without recognising the warning signs or root causes of potential failure, such as not returning the planned benefits or the impending delivery for a negative ROI.

So why are we so reluctant to kill projects and what questions should we be asking to make a determination?

Back to Basics: Why Are we Doing this Project Again?

The ever-changing pace and long-term nature of projects in business these days means that the context they were formed in may well be changed by the time a project is on its way to or nearing delivery.

Business drivers, business outcomes, and the value the project intends to deliver may no longer be as valuable to the organisation as it was initially planned. Despite this, the project may still be tracking as ‘green’ i.e. meeting its time, cost and quality indicators.

But there are times when applying a benefits lens over the project unmasks its reality: It might be time to stop the project and invest the remaining funds elsewhere on higher returning projects.

It’s not something we see very often: Few organisations do ongoing assessments of the likelihood to realise the benefits as part of regular project reporting. Putting this input into an investment portfolio view of organisational spend would allow a light to be shone on under-performing projects, giving the organisation the opportunity to pause, stop, or continue based on the context of the current business environment.

When organisations place a benefits lens over the project the reality might be that the organisation is better off to stop the project and invest the funds elsewhere.

Emotional Investment and ‘Whatever it Takes’ are not Good Reasons to Continue

Large and long-term projects take resilience and the longer a project runs, the more time and emotion is invested in its outcomes.

It’s not uncommon for senior executives who are heavily invested in an outcome of a project to state that the project has gone too far to turn back now, even if it is unlikely to deliver what it is supposed to.

Here’s the reality: Good project teams know they need to invest emotional energy to get good results. But the emotional investment from a team focused on delivery can come at a cost if the landscape has changed to such an extent that the end no longer justifies the means.

Anecdotal evidence from our Assurance team has shown us that the further down the road a project review is conducted, especially with problematic and challenging projects, the more emotional heat there is in the room and a white line fever can take hold.

The ‘whatever it takes’ mentality can seriously cloud judgement and good performance about whether the project remains a good proposition for the organisation, not to mention introducing unacceptable risk.

It’s a sideways example, but Cricket Australia is a good illustration of what happens when ‘whatever it takes’ became the standard for what it takes to win. The game suffered, the players took risky and often unsportsmanlike approaches to delivering outcomes, and in the end, to restore its reputation, a clear out of the management team was the only way to right the ship.

Political Capital – There is Often Less Fallout from a Low Returning Project than a Write Off

More often than not, projects are funded by capital expenditure rather than operational expenditure. When an organisation stops a project that can lead to a write-off, it has a direct impact to the bottom line, making a very visible and unattractive value proposition when bonuses and incentives are directly linked to profits.

Conversely, the benefits of a project can often be difficult to directly link to (other than hard savings, like headcount) and normally benefits accrue over time, not immediately on completion. If a project is going to complete yet under perform on its benefits, in many instances the project owner is long gone before the benefits are realised (or not).

When faced with a decision to stop the project mid-flight or continue to completion, sponsors will often continue with delivery as the realisation of the benefits can be nebulous and often not tracked post-delivery, whilst the visibility and political fallout of writing off the capex can be significant.

Shifting the Deck Chairs – Using Projects to Fund Opex Resources

It’s not an uncommon thing for creative managers to use projects to fund BAU resources under the guise of project resources when operating budgets dry up and work still needs to be done. We have seen it done: Project capex is used to fund BAU resources for a completely different business unit or function.

Stopping a project mid-flight could mean losing the funding for the BAU team which in turn means they will struggle to deliver what is required of them. As long as the resources are billed to a capex funded project then no one seems to mind, which in turn adds pressure to continue with projects even if their business case may be seriously eroding.

Who is the Referee?

With these sorts of forces in play, how do organisations then determine who runs or stops projects?

The rise of the EPMO as a custodian of enterprise investment decisions has seen a growing use of portfolio management reporting and analysis to triage and manage benefits criteria to actively assess the ongoing viability of projects. This information and perspective can support an organisation to know when to start, stop, or pause a project.

The use of agile practices is also helping organisations to reduce the time between benefits realisation and project start, which allows project spend to be chunked down, write-offs to be minimised, and enhances the organisation’s ability to pivot quickly around changing circumstances.

It Takes Maturity to Know When – and What – to Kill Off

Projects will never be perfect, and they will always be challenging to deliver. We want to see committed executives and teams driving outcomes so we are not advocating a wholesale discontinuation of multiple projects.

But some projects do need to be killed off and it takes a mature organisation to be able to do this clear analysis and make the tough call. Most organisations still have a way to go to really ensure the right projects are stopped at the right time.

With a focus on active portfolio management, reduced project delivery timeframes via the use of agile delivery techniques, for example (maximum 6 months to benefits realisation), and regular – and ongoing – benefits assessment from project inception through to delivery, killing a project for the right reasons can become the norm not the exception.

As project specialists, we develop fit-for-purpose strategy and project delivery.  Contact us here to find out more about how we work with your teams or call 02 9098 6300.

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2018-11-28T19:52:31+00:00By |Assurance|