Shutting down a new project is no easy matter, whether you’re launching a new product or service or entering a new market. According to PwC Consulting, around 70% of all change projects fail. So the risks inherent in launching a fresh project are considerable and therefore certainly worth weighing up in advance. Do you and your team stand a good chance of pulling this off? Will the money spent be justified? Would the end result be in synch with your organisation and its culture? If you can’t answer these fundamental questions, stop the project immediately. New initiatives need enthusiastic advocates, among them an ‘exit champion’, someone who will constantly monitor whether the project makes sense for the business.
Why focus can be a bad thing
If your project is already underway, the incentive to shut it down shrinks dramatically. After all, you will have spent money, time and effort getting it off the ground. All too frequently, people keep on spending money, focusing intently on an unachievable goal. Success depends on looking at outcomes and inputs, particularly cash input. New projects tend to devour more and more cash as they continue to run. Imagine your cash spend as a car accelerating towards the edge of a cliff. Once you reach a certain point it’s going to be impossible to apply the brakes.
Financial and other impacts
Killing off a failing idea will undoubtedly benefit the financial health of your business. Losing £1 million is preferable to losing £2 million, or worse, spending so much that the entire business fails. While calling time on an initiative that has taken up time and money might seem drastic, you need to consider the business as a whole, and how an unproductive component will impact upon it. People are sometimes so bruised by working on a failing project that they become cynical, rarely able to commit to anything new. Such cynicism can be contagious. You may also want to consider whether your competitors will gain from the early closure of your project.
Time for leadership
By necessity entrepreneurs must act in a persuasive manner and be prepared to take appropriate action when required – even when this is to put a halt to an idea or initiative that has incurred costs. My advice is to stop the project when the flaws come to light and hold a post mortem to see what lessons can be learnt. Although staff who worked on the project might initially be deflated, you should highlight any positive outcomes and concentrate on moving forward as a business.
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