In an exclusive excerpt from “The First Mile: A Launch Manual for Getting Great Ideas into the Market,” Scott Anthony details the dangers of what he calls “zombie projects” — projects with limited prospects that ought to be killed, but often stumble along for years, sapping an organization’s resources.
Too often, he writes, “zombie projects multiply because no one wants the scarlet ‘F’ that comes from failure pinned to his or her résumé.” Anthony is a managing partner based in the Singapore office of Innosight. His previous books include “Seeing What’s Next” and “The Little Black Book of Innovation.”
From “The First Mile” by Scott Anthony
Companies that stop the plague of zombie projects suddenly find they have many more resources than they realized, and that the remaining projects suddenly accelerate.
Here’s one way to visualize the zombie project problem. In the 1990s, then Harvard Business School professors Steve Wheelwright and Kim Clark conducted research to look at the impact on productivity of splitting people across multiple projects. They asked engineers to estimate what percentage of their time was focused on value-added activities and what percentage was focused on non-value-added activities (planning meetings, preparing for planning meetings, preparing for meetings to prepare for planning meetings). In “Revolutionizing Product Development,” they found that the time spent on value-added activities peaked at 80 percent when people worked on two projects. The percentage plummeted as engineers added more projects to their portfolio. An engineer split across five projects would spend 70 percent of his or her time on nonproductive activities.
Think about how you staff your new growth initiatives. If your company is like many others, it will ask people to spend a fraction of their time on a specific project. The theory is that dividing the work will help people go faster and get better results; the reality is there are many more things that need to get done than people anyway, so you need to do this in order to make progress. But how many successful start-up companies had part-time leaders? As the old saying goes, “You can’t ask nine women to make a baby in a month.”
Don’t Bury Your Failures in an Ark
What’s behind all of this is an appallingly poor set of mechanisms to shut down projects. That’s true even for projects that in moments of honesty leaders would admit have little chance of moving the growth needle. Most companies treat the end of projects like the classic ending scene of the Raiders of the Lost Ark. Indiana Jones has been through hell and back to obtain the Ark of the Covenant, which allegedly contains the remains of the Ten Commandments. The Nazis’ faces have melted, and all is right with the world. He gives the Ark to the US government. Does the government seek to study it? No. The last scene shows the Ark going into a massive warehouse filled with thousands of boxes. Clearly, the Ark will be buried with all of the other boxes, never to be opened again.
As thought leader Rita Gunther McGrath notes, there are two good things that can result from any innovation project: a great new product or business, or significant learning that can be applied within the organization. The second result too frequently gets treated like the Ark — a project that doesn’t deliver against initial expectations quickly goes into a box, is put in the warehouse, and is never spoken of again. Managers race to move away from the “failure” as quickly as possible. This sets off all sorts of bad behaviors. High-potential managers begin to avoid working on seemingly risky projects because they believe they can embellish their resumes more effectively by working on sure things. The company starts prioritizing low-risk, low-return ideas that can’t create meaningful growth. Zombie projects multiply because no one wants the scarlet “F” that comes from failure pinned to his or her resume. Worse, innovation teams working on doomed ideas can escalate resource commitments in hopes that they can somehow find a path out of a deepening hole. No one remembers that when you are deep in a hole, it might be time to stop shoveling.
Remember the reality: every idea is partially right and partially wrong. Missteps and course corrections are a core part of the innovation process. A seminal study in the mid-1980s found that many major new product innovation successes relied on lessons learned from historical failures. In fact, the authors found that the majority of the new product “failures” they studied were critical milestones that often presaged future successes. Typically, valuable insights came in the form of direct feedback about the viability of technology, consumer acceptance of features and pricing, as well as how to target new consumer segments and geographic markets.
The best companies seek to understand why they didn’t deliver against their initial expectations. Perhaps there is an opportunity to change direction but still succeed. Or perhaps the initial expectations—which are often based on nothing more than educated guesses—were wrong, indicating a need to fine-tune the process by which initial expectations are calibrated. Maybe the company learned that the idea that looked so good on paper wasn’t so good in reality. As long as that learning came without massive investment, a decision to stop a project and redirect resources in more promising directions should be celebrated.
Leaders play a critical role in encouraging this behavior by how they manage disengagement from projects, how they treat managers who work on commercial flops, and how they humanize the topic by describing their own failures. For example, Procter & Gamble chairman and CEO A. G. Lafley talks openly about his failures. “You learn far more from your failures than you do from your successes,” he said at an innovation conference in 2008. “I can remember every time I struck out in high school baseball; I can remember every time I failed at P&G, and I failed a lot. Now, what we’re trying to do now is fail a lot faster, fail a lot cheaper, so we can fail more and get onto the next idea or the next innovation that may become a commercial success. But failure is incredibly important, and learning from failure is very important.” Another example of leader role modeling is noted entrepreneur Jeff Stibel, who created a “failure wall” in his company Dun & Bradstreet Credibility Corp. The wall combined memorable quotes about failure with personal examples describing individual failures and lessons learned. Stibel himself detailed three of his most memorable failures and signed his name to them. You don’t get clearer signals from leadership than that!
The Power of the Portfolio
Another key enabler is a portfolio mind-set. Remember, 75 percent of venture-backed companies fail to return capital to their investors. If a company’s future hinges on a single idea, failure certainly can’t be tolerated. A portfolio approach, on the other hand, recognizes the uncertainty in any given innovation effort. It means that a company should explore a handful of ideas for every success it seeks. A portfolio mind-set begins to remove the stigma that comes with failure, because not everything is expected to succeed. It also can lead to unanticipated outcomes as new opportunities to mash together different ideas emerge.
When you shut a project down, follow guidance laid out by McGrath for how to effectively disengage from projects: clearly spelling out the reasons for stopping the project; creating a plan to mitigate the impact on people who will be affected by the termination; and using a “symbolic event—a wake, a play, a memorial—to give people closure.” Remember, you’ve saved your company from the plague of the zombie project, so pop some champagne!
Many think innovation is a purely creative act, but sometimes you have to destroy in order to create. Shutting projects down, extracting lessons learned, and celebrating that learning can be a critical way to enable innovation.