In the previous week, we discussed how projects are evaluated. This week, we will touch on when some projects should be killed. Sometimes in a project,  the project schedule may fall behind greatly to the point that the cost of the project’s net present value (NVP) becomes negative. Other scenarios where the project may need to be killed include when several key team members have already left the project or company, an important vendor has just discontinued an essential component for which there is no replacement part available, or the introduction of a new product which makes the current product development project obsolete. 

In some cases, the project manager or the project team may feel that the project can be saved and that killing a project that has already begun is a waste of resources, time, and effort. In many cases, project managers may fall into one of these false beliefs, or fallacies.

• Sunk Cost Fallacy

Occurs when the project managers or stakeholders believe that, if more money is invested into a failed project, it will recover. However, this normally leads to financially catastrophic results as more money is spent to the point where there is a negative return on investment.

• Commitment Fallacy

Occurs when people such as the project manager are so committed to a project that they will not admit defeat, to the point of damaging their finances, reputation, and company. 

In certain cases, changes are the reasons why a project needs to be called off. The truth is that not every project will follow the laid-out plan. Certain situations and conditions may change. These changes will be felt in the project scope or the cost and time involved as well as may even influence the quality of the project. Here is a list of the forces which may alter the course of a project.

The Project No Longer Meets Its Needs 

In some cases, due to the pace at which the business world evolves, a project’s business plan and strategy may require changes. This is especially true in the case of new product introduction projects such as a launch of a new smartphone where technology development occurs at a very fast rate and technology today may no longer be cutting edge in a few months. Sometimes these changes may cause the original purpose of the project to change and in some cases could not be met by the project team. Spending time and valuable resources on such projects is a waste, especially when you can divert them to other projects and get the best results out of them. 

Project Costs Are Out Of Control

Sometimes, there are instances when the project costs may not have been estimated correctly, sudden increase in supplier prices, or the requirement of new expensive resources. No matter what the situation might be, these changes would cause the project to exceed its initial budget. Though some businesses can tolerate slight deviations in terms of the budget, if these changes cost a fortune, then it may be time for the team to consider abandoning it. Sticking with a project that has an uncontrolled cost will only prolong the overall financial damage and may even lead to negative returns on investment. 

Poor Planning & Monitoring

Similar to a project that exceeds their budget, a poorly planned and monitored project will come back to haunt the project team. There is no point in trying to continue the project any further when the goals were already not clear and key tasks were not defined clearly during the planning phase of the project. In most cases, a poorly planned and monitored project would create more mess in the project to the point where it may be better to just ditch the project and restart the project again with clearer goals and better management.

There Are Ethical And/Or Legal Issues

Almost every industry has some form of government guidelines and compliance which they have to comply with and sometimes these federal mandates may change halfway through the execution of a project. When a project faces problems where it is no longer able to comply with the newly established guidelines mandates or becomes unethical be it towards the environment or humans, there is a need for the project to be shut down. 

Of course, these aren’t the only reasons why projects fail. There can be conflicts within the team that can’t be resolved or disagreements on how to move forward that can hinder the project's progress. 

Admitting project failure is never easy, but sometimes the kill decision may turn out to be the better decision. Sometimes trying to save a doomed ship is pointless and the time and resources spent trying to save it may be better off being reallocated to more successful projects. Successful project managers know when to admit that a project is a financial loss, and learn from the failures and mistakes. Therefore, many project managers conduct a ‘lessons learned’ review at the end of every project no matter if the project is completed successfully or closed prematurely. This is because the knowledge and experience gained from all of these previous projects will prove highly valuable as references and would help guide the success of future projects to come.

Understand The Impact Toward The Organization

Sometimes, killing a project of a larger scale with a higher budget, complex scope, and many project stakeholders, is much more complex as compared to a small project with few stakeholders and scale. Therefore, before taking any steps towards ending the project, the project manager needs to consider the parties that will need to be involved in the decision, who should hear the news first, and what the contingency plans are is necessary

Make The Business Case

When informing the stakeholders of the decision to kill the project, you as the project manager would need to prepare a business case explaining to the stakeholders how much time and money will be wasted if the project continues. As a general rule, the larger the project, the more homework you will need to do before recommending that it be canceled. 

Don’t Play The Blame Game

Usually, when a project needs to be terminated, people always believe that it is because someone did something wrong. Sometimes, this may not be the case as certain external changes mentioned above can which are out of the control of the project team may also lead to the closure of the project. Therefore, the project report should give an accurate description of the reasons why the project needed to be killed, and how it can be avoided in the future.