Pulling the plug on a project – gently

Few organisations want to admit that a large project is failing. But some projects will never meet their deadlines or deliver the expected benefits.

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When the possibility of success is gone, and for the greater health of the corporation around them, such projects must be euthanised.

Killing a major project is a difficult decision requiring complex and objective analysis. It also requires a plan for dealing with potential ramifications. Before pulling the plug, be prepared to address the following issues:

Political fallout Most large projects have politically powerful advocates who become emotionally invested in the effort. When their favourite projects are killed, these advocates may point fingers or mount campaigns to identify and punish the guilty (or even the innocent, but usually IT). You'll need to design a response to creatively mute the critics without being overly defensive.

Associated expenses Cancelling a project can result in considerable expense. Severance packages are costly. Previously capitalised expenses must be written off against current earnings. The project may also have contractual obligations for hardware, software or services. Many contracts also contain early-termination penalties. So be prepared to discuss the financial repercussions with your CFO and CEO.

Unexpected behaviour Cancelling a project can lead to unanticipated (and sometimes undesirable) behaviour. One company wanted desperately to avoid taking a write-off in its current fiscal year. It reduced the size of the project team, making it impossible for the remaining members to complete the project. The company successfully postponed the write-off for 15 months, but the tactics it engaged in skirted the boundaries of ethical financial reporting.

Supplier relationships Project cancellations affect your suppliers, too, and will seriously damage your working relationships. Trying to wiggle out of your contractual agreements may result in litigation. Offended suppliers might refuse to work with your organisation again. In addition, they will tell everyone they know, resulting in potential damage to your corporate reputation.

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