Project Justification: When is it Time to Call it Quits?
At the end of the day, the main goal of a business is to bring in more money than it spends. Plain and simple. It takes due diligence to look at the economic justifications of a project followed by a solid plan to make it a reality. On the flip side, it takes strong will and discipline to know when to pull the plug and move on from a project. What happens when the economics just aren’t working out?
These are some items to review before making the final decision about a project. Using these may help to make the decision a bit more clear, although the final decision may not be easy.
Review the Feasibility Analysis
Major business decisions need to be made from an objective point of view. Data doesn’t lie and if the economics do not justify the project, that’s a major issue. Typical paybacks are around five years, although depending on company policy, it may be less. Each project stage gate needs to evaluate the numbers and factor that into the go/no-go decision.
Explore Multiple Ideas
Are different technologies available to achieve your goal? Sometime during a project, people are so focused on one thing that they do not see alternative ideas. Getting a diverse team of people together will bring multiple ideas to the project and may lead to some breakthroughs.
Talk to Others in the Field
The way to advance in a field is to have a product that differentiates itself from others. The more knowledge you can gain about the existing market and those that are successful, the better you’ll know how to position yours.
Find a Partner
It’s hard to go it alone. A strategic partnership allows you to lessen costs or capitalize on other ideas. They may have technology already in place that reduces your need for R&D or capital investments. This path can have potential to be very beneficial, but also can lead to complications. There needs to be agreements and understanding in roles, ownership and many other business aspects in order to avoid any issues later.
Final Decisions
So, is it time to move on from your project? Ultimately, only you and your team are able to make this decision. The best thing to do is gather as much information as possible in order to make the best decision for you and your company. In today’s world, ideas are plentiful. Knowing which ones to focus on and which ones to avoid separates progressive companies from those that continue to stand in one place. Albert Einstein famously said that the definition of insanity is “doing the same thing over and over again and expecting different results”. Knowing when to move on helps you move forward.
