To what extent do projects generally have an "Exit Strategy" and should this be a part of accepted project management philosophy? Saving Changes...
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Luis BrancoCEO| Business Insight, Consultores de Gestão, LdªCarcavelos, Lisboa, Portugal
Dear Shadav
Very interesting your question
Thanks for sharing
Is not starting a venture thinking of an "Exit Strategy" condemning that venture to failure?
Personally I prefer to think seriously about risk and risk response strategies Saving Changes...
Anton OosthuizenSenior Business Analyst / Project Manager| Self EmployedPretoria, Gauteng, South Africa
An exit strategy is a real and valid risk mitigation strategy when dealing with high volatility projects. Typically it would involve projects with an associated risk of very high impact value. To ignore it would be foolish and does in no way indicate your acceptance to fail. Positive thinking can only go so far.
So to answer the question more directly - a project does not generally have an exit strategy but it should be part of accepted project management philosophy. Saving Changes...
Projects that are expected to not meet their objectives anymore, should be terminated. It's rarely the case.
So YES, "Exit Strategy" should definitly be part of accepted project management philosophy but it requires a certain degree of organisation maturity. Saving Changes...
Wade HarshmanScrum Master| GDITIndianapolis, In, United States
I've never heard it called an "exit strategy," but projects should have stated objectives and some means of measuring progress towards those goals. A project manager should track this progress and estimate the probability that a project will succeed, if possible. When it becomes apparent that a project will not meet it's stated objectives- whether that's a financial goal, a technical accomplishment, customer satisfaction, etc.- then the project sponsor should consider termination. Keep in mind that projects in progress will probably have sunk costs that cannot be recovered and expenses related to termination, so these should be considered when making this recommendation. Saving Changes...
This is better addressed at the portfolio governance level. Companies with a higher level of PPM maturity would have well defined conditions for project termination or at least for having the conversation about continued investment in projects.
For example, with my current client, benefits erosion (when compared with the last approved benefits forecast) is a criterion for assessing project health and if benefits have eroded sufficiently, that would be grounds for axing a project.
As PMs, we should have a deep understanding of the expected business outcomes for our projects and whether the exit strategy is explicitly documented or not, we should be keeping an eye on expected benefits and if those appear to no longer be viable, we should be willing to recommend to our sponsor to execute that exit strategy to avoid throwing good money after bad.
Kiron Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
Think projects do not have 'generally' an exit strategy. There is a tendency to look forward positively.
As Anton and Luis said, such a strategy would be developed as a risk response (Plan B), if the risk of exiting is deemed significant.
As Kiron says, on portfolio level (or program level) there could be a regular monitoring of projects if they still align to their business case. If not, and a project gets into trouble (e.g. running out of money, time or client patience), often project audits may reveal a status perceived as 'real' and recommend to exit.
In my experience, an exit strategy might be ugly and a bit unethical. It may need legal guidance to avoid penalties in a contractual situation. Often the project manager changes, as it may be better not to have a too good/emotional relationship. Saving Changes...
This is the function of project gates. When a project duration is long enough, there is the risk that the overall value proposition will erode before it is completed. To avoid wasting more money once the business case no longer supports the investment, it is important to ensure the rationale to increase the investment is still valid.
When you consider the lifecycle of a project, there are inflection points where continuing will significantly increase the cost. This could be a color of money issue such as transitioning from PD to revenue generating. or designs on paper become a physical thing. At times like this, the cost curve can change dramatically. For this reason, projects often include gated reviews where you do not move forward unless you pass the criteria established for the gate.
I agree with Kiron that this is best handled at the portfolio level rather than the project level. As PMs, we are advocates for our projects. We want them to be successful which brings with it confirmation biases. Gated reviews include "non-advocates" who's role is to look at the project with an open mind and determine whether the project feasibility, maturity, and value proposition justifies continuing. Saving Changes...
Lonnie PacelliAuthor & President| ProjectManagementAdvisor.comBellevue, Wa, United States
Agree with Keith. Tollgates are logical point for offramps or "Go/No Go's". Frequency and structure of tollgates can vary from org to org, but should be deliberately called out at project onset. Saving Changes...
