When I was in grad school, in a well funded research center, I never thought about what could kill a project. Every project last for 2-3 years, or even more. I stayed in the same DOE project throughout my whole grad school career. However, when I came to an industrial/business job, I saw all kinds of project killers time and time again. Basically, each project has to go through a surviving mode before they can come to the commercial stage.
So who are these killers?
Killer 1: Cost, Cost and Cost!!!
I really miss the days in grad school. If we did something interesting, it goes to the journals. We only think about cost in the first paragraph of the paper. After that, nobody cares. But in a company, this is not the situation, especially for business development guys. What is the cost of raw materials? What is the cost of manufacturing? What is the cost and time of transportation? What are the price expectations of the customers?
We all try to make a better product, but the truth is that there are many REALLY NEW technologies or materials. So, it’s not easy to control the cost and price of a new product. We had a customer that told us they won’t purchase our product because the purchase would ruin a long-time stable relationship with their current supplier. Unless we have a really lower price, of course. In a fast growing and highly competitive market like China, this is often the case. Even in the US, with this economy, it is this competitive.
Killer 2: Misunderstanding of customer needs.
This is a real case that I heard. A group of R&D people thought it would be a great idea to create a home ice cream machine. So, they managed to convince upper management to go for this project and spent quite a lot of money and resources to get it done. However, when they brought the prototype to the marketing guys, they were told that the customer research data showed that most people don’t prefer home-made ice cream. And, as the cost wasn’t dramatically lower, customers wouldn’t want it.
Management decided to kill the project instantly. With a lot of money and effort wasted, you know the big bosses ain’t going to be happy. Imagine if this was your first big project in the company, that won’t do any good thing for your career. The better way to do this is to understand what the customer really wants first, and then find a solution targeting it. Usually this works well. Even if the project still gets killed, at least it is not your fault for misunderstanding.
Killer 3: Manufacturing limitations.
This is true for both big and small companies. For smaller companies, from time to time, we can see good new business opportunities that require manufacturing capabilities not available at the manufacturing plant. This is a little frustrating for business development people. Well, the good thing is that smaller companies will know this pretty early, so they won’t waste their resources on a no-hope project. However, for larger companies, who have more capabilities at the manufacturing plant, usually projects go through a stage-gate process. By then, R&D is already pretty much done, so the fate of the project totally depends on the manufacturing review and upper management. If there is a conflict between the resource demands of your project and other projects, or the cost of the manufacturing isn’t working out, more than likely the project will be killed.
These are the reasons that we see maybe only 1 out of 100 projects make it to the final commercialization stage. But, among the three, cost is always the biggest killer for projects. It can kill at any stage of the project, beginning, middle or end. It can even kill your ideas before they can become a project.
There is another factor that can end your project, but I never think it should be called a project killer. It is R&D technical difficulty. Not all the projects can be done. Some of them are just so hard that it could take 5 PhDs 5 years to get it done. If it can’t be done in the lab, that’s fine. This world is now technology driven. Failure in the lab is not going to be a problem. There are always more projects to do after this one. Just try not to let the other factors kill your project!