There is a need today for organizations to pursue new ideas fast. Whether they are developing new products, processes, or overhauling the old ways of doing business, this has to completed quickly. Companies need to develop new capabilities to adapt to sudden changes. One of the most common failings of companies is to stop doing things that are a complete waste of time and effort.
The cost of this effort can be huge for organizations, it keeps accumulating and healthy projects grow weaker as they have to keep supporting these projects that are going nowhere. Admitting failure and moving on is very rare as the power in organizations is determined by the resources you control rather than the success ratio.
Since stopping an ongoing project is so hard, executives make stating them even harder by asking for detailed analysis, scrutiny, raise investment hurdles, and hence discourage innovation. They reduce the speed to market and competitive positioning.
This can be done in a better way. Organizations can improve their agility and make stopping faster.
Making decisions reversible
The top management should allow making decisions reversible so that the company doesn't have to live with the consequences of a bad decision. It covers fears of failures and accelerates experimentation. When you tell people to innovate/ experiment without worrying about quickly reversible mistakes, they feel free to test more and learn in agile ways.
However, very few companies plan this way. many investments are planned for scaling, upfront investments, delayed profits. When revenues and profits are not forthcoming, it seems too late to stop. They continue to spend money and it keeps dragging on.
Instead, recognize that business plans are experiments.
- Break large investments into smaller, smarter tests.
- Clarify the hypotheses and the best way to test them.
- Metrics to determine success or failure, pivot, or pause.
Avoid scaling, hiring too many people, capacity, or marketing before concept validation. Confine experiments to affordable, adaptable, limiting territories, segments. Review new projects quarterly, utilize fast feedback loops, create prototypes, and test key hypotheses. This allows us to dynamically adjust plans and allocate resources.
Make work more visible
It is hard to improve work if it is not visible. For tangible projects, inspect physical facilities, and take a call whether to continue or stop. But the intangible work of marketing, technology is not so visible to top management.
Increasing visibility benefits everyone. It helps uncover valuable initiatives, recognize the people doing the work, and accelerate progress. It helps employees see their projects, learn from them, identify where their inputs could help solve problems, save money. It makes it easier to identify duplicate work and helps teams coordinate and minimize delays.
Such types of systems are available in project management software, objective, key results tracker, and should be used extensively to increase visibility.
Overpower fear
It's a natural tendency not to let go of what you have until you get something better. One way to reduce this is is to reduce the cost of stopping projects.
Another way is to reward people who learn valuable lessons by taking prudent risks, even if immediate results are not good. this may mean keeping the objective, but adapt the approach as conditions change.
Give people more opportunities even if the current ones fail. This reduces the possibility that they will stick to the project longer than they should. make it clear unless the current project is closed, new initiatives won't be launched. the fear of missing out on a better opportunity makes people take a hard look at what they are working on and overpower the fear of loss.
In a world that is changing by the minute, where opportunities are constantly passing by, running fast is not enough. organizations must evolve to match opportunities with faster stopping and turning skills. If they can accomplish this, then growth will be more fruitful, and their competitive strength will increase and they will be better placed.
Further reading
The discipline of business experimentation
Summary of the article
by Darrell K. Rigby, Sarah Elk, and Steve Berez
HBR 2020/09
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