Purposeful Project Abandonment: A Key Tactic in a Down Economy
"A critical question for leaders is, "When do you stop pouring resources into things that have achieved their purpose?" The most dangerous traps for a leader are those near-successes where everybody says that if you just give it another big push it will go over the top." –Peter Drucker
Drucker lived what he taught. He once said that after he wrote a book, he never read it again. He abandoned it. When he had a new idea, he wrote a new book. The same was true in the choices he made throughout his life. Drucker’s career was about abandoning the past in favor of the future. He turned down prestigious chair positions at both Harvard and Stanford and never looked back.
Drucker never reveled in past glory. There was no evidence of his past achievements on walls or the halls of his home, at least not where visitors could see it. It was all about tackling new challenges.
The only thing Drucker said he lamented was a book he didn’t write. "The best book I have not written was called Managing Ignorance. It would have been a wonderful book but a very difficult book," he said. This book would have been a departure for Drucker since it would have highlighted all the missteps that managers make, forcing him to focus on weaknesses rather than strengths. Perhaps that’s the reason he never finished it.
Purposeful Project Abandonment Defined
One of Drucker’s signature concepts was called purposeful abandonment. The key to purposeful abandonment is to figure out what to stop doing or what to stop making. Purposeful abandonment is the cessation of something that you or your company have been doing for months or years but no longer gaining the results or traction you originally hoped for. It could be anything, from stopping to offer a particular product or service that is no longer the cash cow it once was, to a policy, process, or procedure that no longer makes sense to continue. As Drucker once told his friend Rick Warren, author of The Purpose-Driven Life, "Don’t tell me what you are doing, tell me what you have stopped doing."
Ask most Drucker fans to list Drucker’s three most important ideas and they are unlikely to mention his concept of "purposeful abandonment." Abandonment is not as catchy as Drucker’s Law ("there is only one valid definition of business purpose: To create a customer") or "Management by Objectives," the Drucker concept that gained great popularity in the decades following World War II.
Nor is project abandonment the sort of concept that sounds impressive in a senior manager’s presentation. Few managers brag about a product or idea that they abandoned, even though many project abandonment decisions have cleared the way for some of the most successful products in history.
Because of what Drucker calls "investment in managerial ego," managers resist project abandonment. That’s because project abandonment runs counter to what managers have been taught all of their careers—to grow revenues at all cost. Growth, both top line and bottom-line, is the lifeblood of a company. Any line of product abandonment appears to shrink sales and profits. However, that is an incorrect perception, particularly in the long run.
Drucker created counterintuitive ideas like purposeful project abandonment and showing precisely how it applied to a key aspect of a manager’s job. For example, he told managers: "The first step in a growth policy is not to decide where and how to grow. It is to decide what to abandon. In order to grow, a business must have a systematic policy to get rid of the outgrown, the obsolete, the unproductive."
Drucker trained managers to challenge assumptions and ask the right questions. He said that asking the right question was often more important than getting the right answer. There were no other management theorists that brought that cognitive quality to the practice of management.
Let’s take the subject of project abandonment to another level. If you work in an organization of any size, chances are that that there are things you need to stop doing, even in a healthy economy. It’s easy to fall into a trap of continuing to do something long after it has served its purpose. Call it inertia, call it laziness—the reason doesn’t matter. But I have never heard of a perfect corporation that only do the minimum to keep the organization functional. In a hobbled economy, the role of project abandonment becomes that much more important.
Making Project Abandonment Work for Your Organization
Please take a few minutes and answer the following questions. If you identify some money-saving, abandonment tactics that will work in your place of business, be sure to jot them down and put them into action as soon as possible:
- What documents or reports require signatures/approvals no longer require that level of approval?
- What reports or documents do you print out that can simply be viewed online—helping your organization move toward a paperless office?
- What products/product lines no longer provide the organization with the same level of profitability, meaning that they are likely the cash cows of yesterday as opposed to tomorrow?
- What products or services might your company experiment with today that might turn out to be the cash cows of tomorrow?
- While I always feel that cutting people should be a last resort, have you considered cutting "the bottom 10 percent" of your workforce each year as a regular exercise (as Jack Welch, former CEO of GE urged managers to do)?
- What ideas do your employees have that will save the company money? If you haven’t asked them you have overlooked one of the best sources of potential money-saving tactics.
Remember why you are looking into these potential steps. You want to make a few meaningful changes so that the entire enterprise is never put at risk, even if the economy continues its downward spiral.