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As an IT project manager, you know the challenges of bringing a project to fruition. From budget constraints to unforeseen setbacks, it can be a constant battle to keep a project on track. But what happens when a project has exceeded its budget, fallen behind schedule, and seems to be causing more harm than good? Is it time to kill your project?
Many clients may hesitate to pull the plug on a project, despite its noticeable shortcomings. The thought of letting go of an investment, whether it be time, money, or resources, can be daunting. But, just like in a bad relationship, holding on at any cost can cause tremendous pain and ultimately lead to failure.
Sunk Cost Fallacy
It’s a common trap to fall into – continuing to invest in a failing project because of the time and resources that have already been invested. This phenomenon is known as the Sunk-cost Fallacy. It’s when we justify increased investment in a decision, despite new evidence suggesting that the future cost of continuing the behavior outweighs the expected benefit.
But letting go is not easy. Pride can be a powerful motivator that keeps us hanging on. The thought of being perceived as a “quitter” can prevent project sponsors from making the tough decision to kill a project. This is especially true for those who are high in the organizational echelon. They may be heavily biased towards success and may choose to continue and stay the course, hoping that extra effort will yield better outcomes. But this mindset can blur the line between perseverance and insanity.
As the project manager, it’s vital to be aware of this trap, disclose it to your stakeholders, and make informed decisions based on the state of the project. If the cost of proceeding can no longer justify the expected benefits, then the only reasonable action is to kill your project.
Kill Your Project
Deciding to kill a project is not a light decision. It requires a thorough evaluation of the project’s current state and a clear understanding of the costs and benefits of continuing or ending the project. Unfortunately, the absence of clear kill criteria can make this decision even more difficult.
It’s essential to remember that the project phase can heavily influence the decision to stop or forge ahead. For example, if your project is in the early stages, it may be easier to cut your losses and move on. On the other hand, if you’re a service provider and your company’s reputation is on the line, not letting go can be an emphatic basis for continuing the project, regardless of the cost.
Another critical factor is the impact on the project proponents. Admitting the mistake of using a flawed strategy can be difficult, mainly if the project proponents have invested a significant amount of time and effort into the project. But it’s essential to remember that the project manager’s role is to manage and close the project, not to keep it going at all costs.
How to Manage Failing Projects
Managing a failing project can be a brutally difficult and stressful task. But managing it and delivering it to the finish line remains your responsibility. So, how do you successfully manage a failing project?
First, stop looking in the rearview mirror. It’s easy to get stuck in a rut and dwell on past mistakes, but allowing memories of bad experiences to linger will only drain your energy and that of your team. To lead your team out of misery, you need a clear mindset and an attitude of an outsider.
Next, determine what is truly important and prioritize. Eliminate any ambitious objectives and focus on realistic and achievable goals. Break down large tasks into smaller pieces and time-box everything to ensure accurate estimations.
Encourage sleep. Making a mad dash toward the finish line can be dangerous. Remember that this project is taking a toll on people. Retaining an atmosphere of urgency with little benefit to show will drain the last ounce of strength and morale of your team. Instead, ensure everyone never goes beyond eight hours of work and encourage people to get sufficient sleep.
Finally, your team will not look for someone to manage the situation; they will need someone to guide them through it. You must take ownership and make a connection. Don’t manage. Lead!
In conclusion, recognizing a sunk-cost fallacy can be difficult. You may already be in it and not even realize it. It’s also important to understand that killing a project is not a failure. It’s a crucial step in ensuring the success of future projects. By recognizing when a project is no longer viable and cutting your losses, you can redirect those resources to more promising endeavors. It’s not easy, but it’s necessary.
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