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Management Side
Week of 12 November 2018: Pulling the Plug

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As hard as it is to get innovation right, a subject to which we alluded last week, pulling the plug on a bad project is even harder. If you read the management books, they will often quote someone like Winston Churchill, Vince Lombardi or Teddy Roosevelt, with an admonishment to never, ever, give up.

Sometimes you need to give up. It is called throwing good money after bad. Back in the seventies I was involved in a project, funded and managed by a large prestigious company, that should never have been started, at least as it was conceived. By the time the project was killed, over $150 million dollars had been spent (back when that was real money), and tragically, close to a dozen customers had been killed. In hindsight, plenty of clues were available, but folks chose to ignore them. Once you have a certain threshold amount invested, no one wants to admit they made a mistake.

Many a board of directors would have acted more fiduciarily responsible if they had shut down newsprint mills sooner than they did. But here sits an asset with a large sunk cost, and no one wants to make the hard decision.

How can you tell if your project deserves a proper burial? You have to step back and look how it fits into the over all marketplace and economy. In third world countries, you must quit imagining you are in a first world country--after all, what is the exchange rate history and projection with your largest market? How stable is the government (clue--if the leader is waving around a pistol when routinely making speeches, time to get out).


Join us in Guatemala next summer for the 3rd Paperitalo Papermakers' Mission Trip [12.06.18]


But small projects can have these problems, too. In one case, I became fixated in solving a small problem which would yield incremental tons. The next manager saw a bigger picture, made a big move and blew the doors off profitability.

Engineers are particularly susceptible to what I call the "high school science fair" project mentality. What is this? They become so enthralled with what they see as the elegance of their solution they fail to stop and test it: "Does it spin the invoice printer sufficiently?"

Your best bet, whatever your peer level (junior engineer, manager, CEO) is to find your equivalent, perhaps not even in your industry (especially at the CEO level, you'll want to stay out of anti-trust problems) and ask them what they think of your idea. These people will approach it without prejudice and give you an opinion you seriously use as a test.

Sometimes, you can get right up to the end and discover a project needs to be stopped. Money, time and schedule has been invested, but it just does not make any sense, even though it is going to start up next week. Who can stop such projects? Likely only a new leader. Unfortunately, such timing is serendipitous and seldom happens.

New safety ideas involve testing, too. Don't fail to make sure a new safety protocol really improves safety. There have been several resulting in disaster.

Be safe and we will talk next week.


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