In June of 1998, the executive committee of Quantum Telecom reluctantly
approved two R&D projects that required technical breakthroughs. To make
matters worse, the two products had to be developed by the summer of 1999
and introduced into the marketplace quickly. The life expectancy of both
products was estimated to be less than one year because of the rate of change
in technology. Yet, despite these risks, the two projects were fully funded.
Two senior executives were assigned as the project sponsors, one for each
Quantum Telecom had a world-class project management methodology
with five life cycle phases and five gate review meetings. The gate review
meetings were golno-go decision points based upon present performance and
future risks. Each sponsor was authorized and empowered to make any and
all decisions relative to projects, including termination.
Company politics always played an active role in decisions to terminate
a project. Termination of a project often impacted the executive sponsor's
advancement opportunities because the projects were promoted by the
sponsors and funded through the sponsor's organization.
During the first two gate review meetings, virtually everyone
recommended the termination of both projects. Technical breakthroughs
seemed unlikely, and the schedule appeared unduely optimistic. But
terminating the projects this early would certainly not reflect favorably upon
the sponsors. Reluctantly, both sponsors agreed to continue the projects to the
third gate in hopes of a "miracle."
During the third gate review, the projects were still in peril. Although
the technical breakthrough opportunity now seemed plausible, the launch
date would have to be slipped, thus giving Quantum Telecom a wind ow of
only six months to sell the products before obsolescence would occur.
By the fourth gate review, the technical breakthrough had not yet
occurred but did still seem plausible. Both project managers were still
advocating the cancellation of the projects, and the situation was getting
worse. Yet, in order to "save face" within the corporation, both sponsors
allowed the projects to continue to completion. They asserted that, "If the
new products could not be sold in sufficient quantity to recover the R&D
costs, then the fault lies with marketing and sales, not with us." The sponsors
were now off the hook, so to speak.
Both projects were completed six months late. The salesforce could not
sell as much as one unit, and obsolescence occurred qui ckly. Marketing and
sales were blamed for the failures, not the project sponsors.
1. How can we delevop a methodology where termination of a project is not viewed as a failure?
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