Project Termination

Published: 2009-11-04
Last updated: 2022-03-16

Project termination is one of the most serious decisions a project management team and its control board have to take. It causes frustration for those stakeholders who sincerely believed - and in most cases still believe – that the project could produce the results they expected, or still expect. The project manager and his or her team members, very important stakeholders of the project as well, will feel that they personally failed. They also will be scared of negative consequences for their careers; their motivation and consequently, productivity will decrease significantly.

In contrast to that, we are convinced that conscious project termination at the right time, based on clear and well-communicated criteria, profoundly discussed with the whole project management team, and finally mutually decided, is one of the boldest actions the involved or affected members of an organization can take.

What can we do to avoid those negative consequences? Here, we list what we hear in our training, consulting, and coaching sessions, together with our own experiences:

• A clearly communicated strategy of the organization
• Transparently communicated reasons why and how the project supports that strategy, and under what conditions it does not
• Well set and communicated project success criteria (in terms of scope, schedule, and budget), if possible clearly set and communicated termination criteria
• High-level management attention, even for smaller projects, and even then when everything still seems to be on track
• Periodical review meetings with the control board
• Open discussions with the control board about problems and possible solutions or alternatives, including termination
• In case the project has to be terminated, a clear commitment of the control board and high-level management towards the project management team to enable the team to follow the project closure procedures
• Upon successful termination, similar rewards and incentives for the project manager and his or her team as with regular project closure

Reasons why project termination becomes necessary

• Technical reasons
• Requirements or specifications of the project result are not clear or unrealistic
• Requirements or specifications change fundamentally so that the underlying contract cannot be changed accordingly
• Lack of project planning, especially risk management
• The intended result or product of the project becomes obsolete, is not any longer needed
• Adequate human resources, tools, or material are not available
• The project profit becomes significantly lower than expected, due to too high project cost or too low project revenue
  
• The parent organization does not longer exist
• The parent organization changes its strategy, and the project does not support the new strategy
• Force majeure (e.g. earthquake, flooding, etc.)
• Necessary conditions disappear
• Lack of management support
• Lack of customer support

When ever - along the life cycle of a project - it becomes clear that we have to terminate it, there will be achievements we need to document. The least achievement is new knowledge and experience about what does not work. We need to document this so that the organization does not run into a similar situation again. Therefore, we emphasize again that it is vital to run the regular project closure procedures for a project we have to terminate. As such, adequate project termination marks successful project management.

Please, refer also to sub-section Project Management Closeout for some special issues, as well as to section Free Downloads for a project closure checklist.