Initial evidence of project portfolio management maturation in organizations is the reduction in accepted projects that often follows the introduction of consistent work intake practices. Over time, active project prioritization approaches might also evolve from subjective to objective (or at least consistent) methods. Projects will also start to be completed in a more predictable fashion.
However, the one practice that should occur with some regularity at these organizations but rarely does is project termination. Put project leaders on the spot and they can probably count on one hand (or one finger) the last time they remember an active project being cancelled in mid-flight. This is not a surprise – the concept of writing off sunk costs is a well known accounting practice, but the (perceived) fallout from project termination tends to overwhelm rational decision making. Sometimes, there is the fear that the cancellation of the project translates into a failure on the part of the team or the sponsor.
For organizations that struggle with this, perhaps the best approach is to put projects on hold and re-deploy team members to other active projects or the highest priority project “on deck”, and to defined a fixed duration after which if the project is still not worthy of being resuscitated, it gets terminated.
This approach has some benefits:
- The optics of putting a project “on hold”, especially to enable redeployment of resources to a higher priority project, may be much better than the stigma of termination.
- The opportunity costs of continuing to invest in low value projects are avoided.
- The organization buys itself a cooling off period to ascertain that termination is the right decision, but leaves itself the ability to restart the project at a later date.
To utilize this tactic, a couple of prerequisites exist:
- Objective, consistent criteria need to be defined and practiced by governance committees for putting a project on ice.
- A “hibernation” process needs to be developed that will be executed by project leadership – similar to project closure, but with the added flexibility of enabling a potential future restart.
To avoid opportunity costs of your project funnel becoming a tunnel, consistent project termination is needed. Recognizing that this can often be one of the most difficult steps to achieving PPM maturity, placing projects on hold might help to ease this transition.