CHAPTER 18

Your Initiative Needs an “Exit Champion”

by Isabelle Royer

You can still find them on eBay, sleek and gleaming video disc players with LP-sized discs. The product: RCA’s SelectaVision—one of the biggest consumer electronics flops of all time.

But it isn’t simply the monumental failure in the marketplace that makes the SelectaVision story worth remembering. It’s that RCA insisted on plowing money into the product long after all signs pointed to near certain failure. When the company developed its first prototype in 1970, some experts already considered the phonograph-like technology obsolete. Seven years later, with the quality of VCRs improving and digital technology on the horizon, every one of RCA’s competitors had abandoned videodisc research. Even in the face of tepid consumer response to SelectaVision’s launch in 1981, RCA continued to develop new models and invest in production capacity. When the product was finally killed in 1984, it had cost the company an astounding $580 million and had tied up resources for 14 years.

Companies make similar mistakes—if on a somewhat more modest scale—all the time. ” Why can’t companies kill projects that are clearly doomed? Is it just poor management? Bureaucratic inertia? My research has uncovered something quite different. Hardly the product of managerial incompetence or entrenched bureaucracy, the failures I’ve examined resulted, ironically, from a fervent and widespread belief among managers in the inevitability of their projects’ ultimate success. This sentiment typically originates, naturally enough, with a project’s champion; it then spreads throughout the organization, often to the highest levels, reinforcing itself each step of the way. The result is what I call collective belief, and it can lead an otherwise rational organization into some very irrational behavior.

Of course, a strongly held conviction and the refusal to let inevitable setbacks undermine it are just what you need to get a project up and running. But there is a dark side: As the project moves forward, faith can blind you to increasingly negative feedback—from the lab, from vendors and partners, from customers.

My analysis revealed a number of practices that can help companies avoid this kind of disaster. For one, they can assemble project teams not entirely composed of people enthusiastically singing from the same hymnbook. They can put in place a well-defined review process—and then follow it. Perhaps most important, companies need to recognize the role of “exit champions”: managers with the temperament and credibility to question the prevailing belief, demand hard data on the viability of the project, and, if necessary, forcefully make the case that it should be killed. While the importance of project champions is well documented, the value of someone who is able to pull the plug on a project before it becomes a money sink hasn’t generally been appreciated.

Recognize the Role of the Exit Champion

Sometimes it takes an individual, rather than growing evidence, to shake the collective belief of a project team. If the problem with unbridled enthusiasm starts as an unintended consequence of the legitimate work of a project champion, then what may be needed is a countervailing force—an exit champion. These people are more than devil’s advocates. Instead of simply raising questions about a project, they seek objective evidence showing that problems in fact exist. This allows them to challenge—or, given the ambiguity of existing data, conceivably even to confirm—the viability of a project. They then take action based on the data. At Essilor and Lafarge, two companies I studied for this article, exit champions joined the projects as evidence of their unpromising futures was mounting. But supporters were still clinging to the shreds of positive evidence that occasionally emerged—or ignoring the evidence altogether. Had it not been for these exit champions, team members said later, the projects probably would have continued for months or even years.

To be effective, an exit champion needs to be directly involved in the project; a negative assessment from someone based elsewhere in the company is too easy to dismiss as ill-informed or motivated by organizational rivalry. The exit champion also needs a high degree of personal credibility. The exit champions at Essilor and Lafarge had been with their companies for a long time and were well regarded by top management. Both had a strong network of people at different levels of the company ready to provide support when they decided the project should be killed.

What kind of person would willingly assume such a role? Even if killing a project doesn’t put an exit champion out of a job, the role, unlike that of a traditional project champion, seems to offer little in the way of prestige or other personal rewards. (For a discussion of the differences between the two roles, see the sidebar “The Exit Champion and the Project Champion.”) In fact, the exit champion faces inevitable hostility from project supporters; those at Essilor and Lafarge were variously described as villains or dream breakers.

Consequently, exit champions need to be fearless, willing to put their reputations on the line and face the likelihood of exclusion from the camaraderie of the project team. They need to be determined: Both Essilor’s and Lafarge’s exit champions failed in their first attempts to stop their projects. Perhaps most important, exit champions need to have some incentive for putting themselves out to halt a bad project. For many, this will simply be an acute distaste for wasted effort. As one exit champion at another company I researched said, “When I work, I need to believe in what I do. I don’t want to waste time on something that is worthless.”

It is important to understand that an exit champion is not a henchman sent by top management to kill the project. The exit champions at Essilor and Lafarge certainly weren’t: They were assigned their positions only because their predecessors had left the company, and they simply took the initiative to determine if their projects were likely to be successful. Indeed, it wasn’t initially clear to either of them that their respective projects should be killed. Although signs that the projects wouldn’t succeed were accumulating, in neither case was the evidence conclusive because it wasn’t based on hard data.

Senior executives need to recognize the exit champion as a defined role that someone might play in the organization—otherwise, they may not know exit champions for who they are and give them the support they will need. And they can take steps to create an environment in which such a savior would be more likely to emerge. Just as companies celebrate and recount stories of the great successes of product champions, they could perhaps identify and spread tales of courageous exit champions in their midst (or at other companies) who saved their organizations millions of dollars. Top managers should at the least make it clear that challenges to a popular project would be welcome or even rewarded. At the same time, though, they need to demand from the exit champion strong evidence of the project’s weaknesses—just as they should have earlier demanded growing evidence of its viability.

Although they may not always be played out on such a grand scale as RCA’s SelectaVision, stories like these are all too familiar in business. That’s because belief is a powerful sentiment, and collective belief is even more powerful. Clearly, any project has to start with faith because there typically isn’t much objective evidence, if any, at the beginning to justify it. But, as a project unfolds and investments increase, this faith has to be increasingly tested against the data. Indeed, the challenge for managers in the “can-do” culture of business is to distinguish between belief as a key driver of success—and belief as something that can blind managers to a project’s ultimate failure.

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Isabelle Royer is a professor of strategy and management, specializing in decision making, at Université de Lyon Jean Moulin, iaelyon School of Management, Magellan.

Adapted from “Why Bad Projects Are So Hard to Kill,” Harvard Business Review, February 2013 (product #R0302C).