Project Termination Guide for Successful Failure & Minimum Blowbacks

project-termination

 

Deciding that it is time to abort a project is neither easy nor pleasant. However, at times it is inevitable.

 

Aborting a project at the right time can make a world of difference, rather than carrying on a project that is failing till its bitter end.

 

That is why we have created this project abortion guide to help you understand how to abort a project. Not only that, but this post also highlights factors that could lead to project termination and those that may make this decision.

 

Being aware of this could help you save the project you and your team are working so hard at or provide you with the knowledge to decide the right time for project termination.

 

So without further ado, here is everything you need to know about aborting a project.

 

Types of Project Termination

 

types-of-project-termination

 

There are two main types of project termination. These types include “natural project termination” and “unnatural project termination”.

 

Natural termination of a project refers to those projects that reach the project close because the aims of the project have been completed. Natural termination is the successful completion of a project.

 

Unnatural termination on the other hand is quite the opposite. Unnatural termination refers to when an organization that has backed the project or where the project is commencing chooses that they are no longer willing to invest resources, time, and cost that is needed to complete the project.

 

For this article, we will be focusing on unnatural termination as we will be looking at why you should abort a project, and when doing so is in the best interest of all those involved.

 

Reasons Why Aborting Your Project May Become Necessary

 

Here are just some of the possible reasons why project termination may become necessary:

  • Technical reasons
  • The requirements of the project change fundamentally
  • The requirements of the project result are unclear or are unrealistic
  • A common reason for many project’s needing to be terminated is the lack of project planning
  • The intended outcome of the project is no longer needed so the project becomes obsolete
  • The project cost becomes too high or the projected revenue is too low
  • Requires material, tools, or human resources for the project are unavailable
  • External factors such as a natural disaster including earthquake or flooding etc.
  • Lack of management support
  • Lack of customer support

 

Varieties of Project Termination

 

varieties-of-project-termination

 

Now that you know possible reasons that you may need to abort your project, you need to understand that if your project is about to be terminated it can undergo four different fates.

 

Besides the types of project termination, these four fates are project termination by extinction, project termination by addition, project termination by integration, and project termination by starvation.

 

Let’s go over each type briefly so that you can differentiate the four and know what to expect in each case.

 

1. Project Termination by Extinction

 

Project termination by extinction is when a project is stopped due to either its successful or unsuccessful conclusion.

 

Project termination by extinction could happen in the following cases:

  • The project has met its scope and the client or end-user has accepted the project outcome
  • The project has been superseded by external developments like a market crisis, technological advancements, etc
  • The project has failed to achieve its goal

 

2. Project Termination by Addition

 

The majority of projects that are undertaken are done so ‘in-house’, which means that they are worked on by the project team for the project outcome to be used by the parent organization.

 

In project termination by addition, if a project is a success, the project may be terminated by institutionalizing it as a formal part of that parent organization.

 

3. Project Termination by Integration

 

In the case of project termination by integration, the project that is being aborted is either integrated into other larger projects that are underway or becomes part of the ongoing operation of the organization.

 

Project resources in this case are redistributed and the project as a whole loses both its purpose and identity as an individual project.

 

4. Project Termination by Starvation

 

Project termination by starvation can occur for several reasons. These reasons could include things such as politics, placated sponsors, or even just general budget cuts.

 

Many argue that project termination by starvation is not an act of termination at all. Many believe that termination by starvation is in reality a willful form of neglect.

 

Termination by starvation, therefore, is the act of depriving a project of necessary resources it needs to sustain its ongoing activities. This leads to the inevitable cease of function.

 

The Decision to Abort a Project

 

decision-to-abort-a-project

 

Project termination is not an event that just transpires, it a decision made by key stakeholders as a result of calculated decisions.

 

There are often warning signs before a project will be terminated as the stakeholders involved will attempt to forestall the termination.

 

No one involved in a project that has taken both time and effort wish to terminate it. it is human nature to try and salvage the project as best as possible.

 

Numerous Project stakeholders vary in terms of interest, objectives, and agendas.

 

Below we will highlight certain classes or groups of stakeholders that have the means, motive, and opportunity to terminate a project.

 

These key stakeholders can directly or indirectly create conditions that would result in other stakeholders to decide to terminate the project.

 

Here are those key stakeholders that have the means, motive, and opportunity to terminate a project.

 

1. The Client

 

The client is one such stakeholder that has the power to abort a project. However, the client has a vested interest in obtaining the project deliverable, the client may be one of the stakeholders who would be the most anxious in terminating a project.

 

This interest has often been seen to lead a client to stick with a project that is doomed well after it should reasonably have been aborted.

 

2. The Senior Management

 

The senior management either initiate a project or accept a project through a contract with a client. This makes senior management an important part of the decision process of whether to terminate a project.

 

3. Investors

 

Investors may not be relevant in every project, but investors like venture capitalists have a considerable influence and often have a deciding vote in the decision of whether a project should be terminated.

 

Investors as stakeholders may make termination decisions more quickly and surprisingly, as fortunes and priorities change for the investor.

 

4. The Society

 

Projects can be viewed as social constructs, built and managed by people for people.

 

It is common for the project environment, which is driven by legal, political, regulatory, moral, and social considerations to impact the existence of a project.

 

Society’s representatives, if the need arises, act directly or bring sufficient pressure on other stakeholders to exercise their project termination authority.

 

Any and all stakeholders have some vested interest in the project that is being run. That is why if there is a reasonable plan to salvage a failing project or one destined for abortion, stakeholders will likely give the plan a chance to be implemented.

 

Stakeholders need to be aware of termination thresholds, effective communication between the stakeholders will help define the threshold and also indicate early signs that project termination may be approaching.

 

How to Abort a Project? The Right Way of Doing It!

 

Now that we have highlighted the most likely factors that may lead to project termination, the potential stakeholders that could bring about project termination, it is time to understand how to abort a project as a project manager while reducing your vulnerability

 

Project management is not an exact science, and therefore, there is no exact procedure or a set way to determine the termination variables and provide a set indication of the termination decision.

 

However, there is a basic process that you can adapt to the individual project that will allow you to focus on any factors that are most likely to cause a termination decision.

 

The process to follow is Risk Management. Identifying risks is identifying any uncertainty on your project and the negative impact it could have on your project.

 

When you are considering risk in light of a potential termination decision you need to ensure that you focus on the entire risk assessment and not on any particular identified risk in the project.

 

You need to consider the entire risk picture which includes the severity of the risks, and costs that will be incurred in the risk response to either offset or mitigate that risk.

 

To clarify this, consider the following formula you can apply:

 

Risk cost = impact in $$ x probability of occurrence + mitigation cost x (1- probability)

In this formula consider impact the equivalent in the monetary value of the consequence to the stakeholders should the risk happen. Probability is the likelihood of the risk occurring. Mitigation cost is the estimate of the cost that would be required to preclude or minimize the effect of the risk.

 

When terminating a project, you should follow these 8 steps:

  • Close any outstanding agreements with suppliers
  • Transfer any necessary responsibilities
  • Dismiss or re-assign the project team if possible
  • Release all remaining resources
  • Resolve all accounting and finance issues
  • Document lessons learned to be used as a reference for future projects

 

Related: 

The 19 Best Risk Management Software of 2021

 

Conclusion

 

Terminating a project is not easy, neither for the stakeholders making the decision nor for the project team involved.

 

While project termination may be inevitable, at times it is preventable.

 

That is why it is important for you as a project manager to recognize your vulnerability to a project termination, identify where a termination decision is likely to come from, and if possible, try to analyze any options available.

 

On the flip side if the termination is the best course of action, as a project manager you should recommend this rather than have this decision be a surprise and taken out of your hand.

 

That is why we created this project abortion guide to help you see the options and warning signs so you can make the best decision for your project, team, and yourself.