Every Project Manager with a few years of experience under his or her belt can likely recall at least one example of a major project that lived on long after the plug should have been pulled and the project canceled.  The best (or worst) examples are the ego-driven initiatives of top executives that can’t let go for fear of losing face by admitting defeat. 

More than a few organizations have been taken to or pushed over the edge by these self-anointed visionaries bent on changing their corporate world with some grand project.  Once invested, they cannot let go, and if left unchecked, the results can be nothing short of disastrous for the organization.   

Understand the Lessons of The Dollar Bill Game:

I participated a few years ago in an exercise at an executive leadership program where this was illustrated through something called The Dollar Bill Game.  The game is actually a live auction for $20 where all of the executives are participants and the money is real.  The rules indicate that the winning (high) bid gets the $20 and the last bidder prior to the winner must pay the value of their bid.  In our class, the frenzied bidding went to $140, with the losing bidder paying $139 for their failed attempt at $20.  The instructor indicated that in other programs, this same exercise resulted in bidding wars that reached several hundred dollars.   (Note: the $139 in my class was donated to a local charity.)

While some may argue with the comparison of The Dollar Bill Game to the propensity of some executives to hold on to projects long after they no longer make sense, the parallels are powerful.  A fierce competitive streak, the desire and drive to be proven right and the fear of being visible as wrong, the discomfort in backing down, the belief that the solution is just a little further away, the misguided perception that investing more will fix the problem are all issues that go into an executive’s irrational continuation of bad projects.

The Project Manager must recognize these human issues and minimize their impact through thorough up-front project planning and on-going risk management and control.

What’s a Project Manager to Do?

This is a complex and politically turbo-charged issue that can find the unwitting Project Manager wishing for a new career or at least a different project.  I am pretty convinced that there is no magic answer here for anyone involved, but here are my suggestions for organizations and Project Managers to minimize the chances of this type of project developing and surviving if one does:

-The best cure is prevention.  The development and institutionalization of rigorous project screening processes is critical to filtering out many/most of the bad projects.  The Project Managers should work hand in hand with a firm’s top leaders to develop the mechanisms that ask tough questions, scrutinize rationale and assumptions and clearly identify risks and potential impacts. 

-A dose of cynicism is healthy.  Don’t construct project teams with just blind followers, or stated more positively, include a healthy mix of supporters and doubters on every project team.

–Insist on a Charter for every project and ensure that the role and teeth of the sponsor and project manager are clearly defined as well as the responsibilities of the project participants.  I like to highlight the obligation of everyone to identify and bring forth risks and problems as a key responsibility and a core value that must be respected.

-Plan to recognize and act on failure.  This is a bit like short-selling stocks…it is counter-intuitive to focus on something failing, but in my experience, the best project teams and project managers define what failure looks like on a project scale and how they will recognize and deal with it should the worst occur.  Back to the stock metaphor, the best investors establish stop loss or similar orders to cut losses at an acceptable level, regardless of how high the hopes were for the underlying investment.  This failure recognition plan should be written into the charter and risk plan documents.

-Did I mention active risk planning, management and control?  This is no place to short-change the project or the organization, yet in my experience, it can be the one area of an otherwise well-run project that is minimized.  Remember, project management is all about managing risk.

-Cultivate a healthy communications environment.  OK, I admit that this one is easy to say and hard to do, but it is absolutely essential.  A healthy communications environment is one where dissenting viewpoints, tough issues and generally robust dialogue takes place as a normal course of business and without fear of retribution.

I work hard to ensure that my teams understand the ground rules for communicating and that the only unacceptable behaviors involve not communicating or making the communications personal versus project focused.  For some organizations, creating a healthy communications environment is a tough task due to cultural issues, for others it is easy.  However, it is essential for all. 

The bottom-line: build in controls to stop bidding on the $20

If the project is beginning to resemble an out-of-control bidding auction for $20 as in the game above, it is critical for the Project Manager to avoid sugar coating the reality.  However, at the same time, a dose of diplomacy will go a long way to help all parties involved. This one takes raw courage and significant finesse on the part of the Project Manager.  Developing a style for communicating bad news while not pointing fingers is a prerequisite for success and something taught only by experience. 

While this suggestion may be controversial, I don’t mind developing my messaging to communicate the point of failure but still allow the involved parties (including the erstwhile executive) to save face.  If the practices above and the many others not discussed here are put into play, project failure is a technical issue more than anyone’s fault.  If a failure-alert is triggered and the project is proven to not be capable of living up to it’s objectives and charter, then the process worked and the team is to be congratulated, not executed. Even the most ambitious of executives will recognize the up-front beauty of a solid failure plan as part of saving their corporate skins.  It’s the Project Manager’s responsibility to design this into the project plan or the company might just pay too much for $20 of executive ego gratification. 

Author’s Question: What are your approaches for preventing and dealing with runaway projects?