I’ve been looking at projects that fail, and am in two minds about whether to include projects that get stopped. If it’s stopped, has it failed? Or was closing it down the right response, so the business has successfully avoided the cost of completing something that wasn’t worth it? Research commissioned by Microsoft shows that 15% of projects are shut down before completion. These projects didn’t meet their success criteria, so have they failed?
Making the decision to pull the plug on a project is tough but sometimes necessary. Projects are stopped for various reasons, for example:
- the organisational culture changes
- the rationale behind doing the project evolves, for example, if the need for the project disappears
- the business operation changes
- the business case becomes untenable
- the project sponsor leaves and the drive behind the project disappears
- the regulatory environment changes
- business priorities shift, for example, if a division is sold or another critical project takes away resources
- any other critical element within the project environment changes.
In these cases, stopping the project may well be the only sensible action to take. After all, there is no point continuing to deliver something that will no longer add value or solve a business problem. Continuing the project would be a waste of resources.
This type of project needs to be subjected to a controlled close-down; that is, managing the shut down of the project in a way that redeploys resources, salvages what can be reused or kept and handles the awkward questions through a planned communication campaign.
Directors believe that 19% of all projects should be closed down. Only 15% of projects are, so we can conclude that there are an additional 4% of projects which carry on and add no value at all to the companies which pursue them to the end. This costs the average large UK business £13.4 million every year.
I think we have to conclude that projects that are stopped before they are completed aren’t necessarily failures. Projects that carry on when they should be stopped and deliver nothing of value are always failures.