Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 3, Issue 2;   January 8, 2003: Toxic Projects

Toxic Projects

by

A toxic project is one that harms its organization, its people or its customers. We often think of toxic projects as projects that fail, but even a "successful" project can hurt people or damage the organization — sometimes irreparably.
Bottle of poison

Martin dejectedly handed the message to Jeri, who read it out loud: "You've been volunteered for Amethyst. You'll be working with Weldon and the architecture team." Amethyst was by now the tail wagging the organizational dog, and everyone understood that when it came to Amethyst, "volunteered" meant "indentured."

"Probably the best place to be, if you have to be on Amethyst," Jeri said, trying to console Martin.

"Yeah, right," said Martin, "like the southern Yukon in February."

Amethyst was a "Monster" project — one that gradually claims more and more organizational resources. Monster projects are one type of toxic project. Even when they're "on track," they harm the organization by consuming resources that are much better used elsewhere.

Here are some other kinds of toxic projects.

The Pet
The pet project is funded because its champion not only has the urge to play around with a favorite idea, but also the political clout to gather the resources for the needed toys. What's the cost of not using these resources productively?
The Turnover
Toxic projects
harm their organizations
even when — especially when —
they "succeed"
Some projects are so frustrating and deadly to the morale of the project team that they cause skilled and productive team members to leave the organization. What's the cost of turnover?
The Trap Door
This is a project that commits the organization to a path that severely limits its future strategic options. What's the cost of lost flexibility?
Seawater
People adrift at sea, dying of thirst and desperate, sometimes drink seawater. Organizations do something analogous — they fund projects that seem useful, but which actually threaten the organization. What's the cost of treatment once you realize you've been drinking seawater?

Why don't organizations just cancel toxic projects? Often people don't realize that the projects are toxic, because the accounting system masks their impact.

When we compute project costs, we sometimes understate certain organizational costs. For instance, a Turnover project creates organizational costs that aren't actually charged to the project, such as increased recruiting costs, delays in other projects, and depressed morale. If these costs are recognized at all, they appear as overhead, and they're distributed across all organizational activity using a "flat tax" system that allocates them to all projects in proportion to labor hours, management time, square feet or dollars spent.

But projects differ, and these costs vary by project. A toxic project creates more than its share of these costs, but the organization never realizes it.

What can we do? Decision makers can assess project toxicity by making a serious attempt to apportion organizational costs fairly. Computing these costs can be difficult, because it feels subjective, but almost any honest effort would be fairer than the flat tax system. Denying the reality of these costs doesn't eliminate them — they're real, they cannot be known exactly, and we must deal with them. Go to top Top  Next issue: Please Remove My Appendix  Next Issue

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