17 June, 2011

Are you a business baby killer?

There’s a terrible, but powerful saying in business: “Kill your babies fast“. Usually applied to new product ideas, it’s also applicable to other areas of business innovation and expansion. As you develop those new ideas, they suck in resources - people, money and the most precious commodity of all, time. While strong determination , persistence and even sheer bloody-mindedness are important characteristics of successful innovators and entrepreneurs, the best also kill projects as soon as it’s clear that they are unlikely to succeed, both in absolute terms and by comparison to other projects in the portfolio. That means you can concentrate your resources where they’ll have most effect.  Classic strategic thinking.

Killing projects is hard. Once started, they seem to get a life independent of you. which gets stronger with every month and milestone passed. The later the stage of development, the harder it is to cancel them. “We’ve invested too much to stop now” and “It’s starting to show some promise” are phrases you’ll hear a lot, from the project team, the project sponsors, the CEO or the board. No-one wants to admit to what others will think of as failure, and so the project continues in the vain hope that it might still pay off, ignoring the benefits of switching resources to more promising opportunities. You end up with numerous projects on the go, all inadequately resourced, often getting in each other’s way, and probably too late for the market opportunities originally targeted. Or you’ll have made one big bet on Day One, which is even harder to kill.

Sometimes there’s an alternative to infanticide. At the risk of taking the analogy too far, you might consider adoption - selling the project to someone else with a better fit for what the project offers. It might be another business, or the project team itself. You might get paid handsomely for the effort to date; you might retain an investment in the new owner. Indeed, being a “baby factory” is a legitimate business model for some innovators. But be wary of investing too much time and resources on securing a new parent - that’s as bad as spending them on the project itself.

First posted April 20th, 2009

No comments: