Cutting Your Loses: Extricating Your Organization When a Big Project Goes Awry

This is an MIT Sloan Management Review article. Project failure in the information technology area is a costly problem, and troubled projects are not uncommon. Executives become so strongly wedded to a particular project, technology, or process that they persist in committing their companies, continuing to pour in more resources. Escalation of commitment to a failing course of action is particularly common in technologically sophisticated projects with a strong IT component. There is little research on de-escalation, or the process of breaking the cycle of escalating commitment to a failing course of action. Through de-escalation, managers may successfully turn around or sensibly abandon troubled projects. During the past eight years, the authors examined more than 40 cases of IT project escalation. The authors present a process framework for de-escalation. The framework reveals that de-escalation is a four-stage process: problem recognition, re-examination of the prior course of action, the search for an alternative course of action, and implementation of an exit strategy. To show its general applicability, the authors apply the framework to a well-documented case study of de-escalation: the London Stock Exchange's Taurus system. The authors offer a set of recommendations for disengaging from a failing course of action.

• Project management
• Decision making
• Leadership
• Innovation
• IT management