When I was a kid, my dad collected mementos from defunct airlines. His home office was decorated with framed stock certificates from PanAm, Eastern Airlines, TWA, and other fossils of the aviation industry. His barware included a mishmash of double old fashioned glasses from those and other deceased carriers. The kitsch factor was part of the appeal, but he was also fascinated by how even the most ubiquitous companies can come and go, and I seem to have inherited that fascination. The first time I went to the Kennedy Center for the Performing Arts in Washington D.C., I couldn’t stop staring upward at the engravings that list the original corporate donors who facilitated the building’s construction. Names like Kodak, Standard Oil, Woolworth’s and other bygone giants turn the grand entryway into a corporate mausoleum (in a good way).
As long as you’re observing from a safe distance, business failures can be incredibly interesting. Many of the business books I’ve found the most enjoyable and instructive have been about failures: When Genius Failed (Long Term Capital Management), Conspiracy of Fools (Enron), and How Markets Fail (numerous financial institutions) are a few of my favorites that break down catastrophic failures in compelling detail. And despite the carnage wrought by some of these blowups, I find the narratives comforting in a way. After all, if your idea, product, or business fails, at least you’re in good company.
This week I came across a doozy in the story of the demise of Target Canada, which may merit its own book someday. I vaguely remember when this story came out last year, but it was just a blip on the radar to me. I probably read something like this Fortune magazine story that offered a few cursory explanations of why Target pulled out of Canada and assumed it just didn’t work out or that they couldn’t compete. Aside from perhaps those who are more plugged into the retail industry, I think that’s what most people probably assumed.
Wrong! It’s actually one of the most interesting stories you’ll find…about boring software not working properly.
The link to the article in Canadian Business not only goes into the details of Target Canada’s painful collapse, it’s a great window into the group psychology you see in slow-moving business disasters. The chain reaction of decisions that doomed Target Canada followed patterns you come across in project failures large and small. It’s worth your time to read - and that goes double for anyone involved in developing, selling, buying, or implementing enterprise software.
When You Get That Sinking Feeling about a Project...
Massive projects like the Target Canada launch can have an organic quality to them when they fail. Bad decisions at critical junctures infect other departments, gradually degrading their operations until they finally grind to a halt. The reasons differ, but the outcomes are too often the same. At Target Canada, a huge upfront cash commitment to buy real estate led to an impossible launch timeframe which led to a rush to implement the software that ended up mortally wounding the business. While most people haven’t experienced a failure of that size, many if not most know what it’s like to be on a project where the deck feels stacked against them from day one. Usually that feeling comes from overly aggressive timelines, lots of moving parts, too many unknowns, and perhaps the most overlooked ingredient: unflagging optimism from leadership.
Confidence and optimism from leadership are usually welcome, but if management’s tone strays too far from reality on the ground it can have a way of discouraging dissenting voices. Why? Relentless optimism without any acknowledgement mounting problems sends an unintended message when it comes from the people in charge. People assume management must be aware of the problems, so the subtext that people hear is, “The company line is that everything is fine – get with the program.” It’s one of the reasons why it is so hard to find the big, scary problems at a company when you first start working there. It’s also why it takes some courage to be the person who turns off the music and says that the party’s over. No one wants to be that person. At a big company, and especially if you’re not senior, it’s safer to go along with the script, even when you believe the situation is be hopeless. This quote from the article summed up that experience pretty well:
“Everyone knew the launch was a disaster and the company had to stop opening stores so it could fix its operational problems, but no one actually said so. ‘Nobody wanted to be the one person who stopped the Canadian venture,’ says a former employee. ‘It wound up just being a constant elephant in the room.’”
When things reach this point, conversations that would take place out in the open in a healthy organization now only happen behind closed doors. People spend inordinate amounts of time talking about how problems aren’t being talked and don’t have the wherewithal to fix them. Often wrongly, line managers and staff just assume that management understands the full scope of the problems, and so they soldier on in the belief that things will somehow get fixed. Either that, or they just figure that leadership doesn’t care. Later, after the project has either launched and failed or had its timelines extended (the only two possible outcomes), senior managers are often dumbfounded by how basic information didn’t make its way up to them. Such was the case at Target Canada.
Five Red Flags to Raise If Timelines Aren’t Your Call
The further along a wounded project goes before the situation is remedied, the higher the risk of major failure. The only real remedy is to convince the people in charge that certain problems need to be addressed as early in the process as possible, but this raises a dilemma. In theory, everyone should raise potential red flags the moment they spot them, but in practice people often don’t want to be seen as naysayers who lack a “can-do” attitude. It can seem like the safe career move is to drink the kool-aid in public rather than contradict your boss and get in an argument about assumptions or timelines – especially when the decisions have already been made. And most managers won’t tell you this, walking into your boss’s office with every potential threat to a project the moment you spot it is not doing your job. You’re expected to know when to share problems versus solve them yourself.
Then again…there are problems and then there are problems. Here are some critical questions to ask yourself when a project starts to feel at risk that can help you either salvage it or sound the alarm. In my opinion, if you don’t like the answer to any one of these, it’s worth raising with your manager. And just as important, I find that framing the issues in these ways leads to productive conversations about the business and positions you as being a pragmatist rather than just a pessimist.
- Is it hard, or impossible? When optimism turns into blind optimism, you’ve got a problem. Attempting an audacious goal is great if the plan to accomplish them is plausible. But if the goal is audacious and the plan is soft, you’re just hoping the impossible will happen. If there’s no way the math all adds up, ask for clarification as to how exactly this is all supposed to work. You don’t even have to raise the issue – let them point it out for you.
- Is the tail wagging the dog? At Target Canada, the entire launch morphed into an effort to earn a decent ROI on the real estate deal. As one employee said, “Once [Target] signed up to do 124…locations, it felt like there was a point where it’s like we have to assume sales will be good.” If it becomes clear that the assumptions underlying your project were imposed on you rather than made on their own merit, the project could be doomed from the start. Raise the issue.
- Is unsustainable effort the new business model? Making an intense push to get a big project over the finish line is part of the job. But if the only way something can succeed on an ongoing basis is with insane effort from individual contributors, you’ve got a big problem. What happens when those people burn out and leave? If you don’t have a plan to automate or streamline that work, there’s a stress point in your business model that will give way at some point.
- Is the 80/20 rule being applied incorrectly? This question needs to be asked in both directions. Target Canada was preparing to go live with an inventory management system that needed to work roughly 100% of the time and wasn’t even close to that level of performance. On the other hand, sometimes a timeline can be saved when you’re aiming for 100% and far less will suffice at the start. If the 80/20 rule is being misused, you either have a problem or an opportunity that merits raising.
- Will you really be done when you think you’ll be? Big projects often meet their deadlines by chopping off scope along the way. If that’s true in your case, what’s happening to all of that “phase two” stuff? Is it accounted for anywhere? Does it break other assumptions of the plan if you need to keep consultants on for longer? You’ll be surprised how often people fixate on the target date and forget entirely about what happens immediately after.
Learn, Learn, Learn
Early in my career I saw a client of mine have a project go sideways on them that was very similar to Target Canada’s. (They even used the same software mentioned in the article.) It was hard to watch and stressful for pretty much everyone who touched the project, but it taught me some important lessons about how big organizations get work done that I rely on daily. I’m sure plenty of people at Target Canada did everything I mentioned above and much more and still couldn’t prevent the ship from going down. Unfortunately, that can happen. So when your hands are taped to the steering wheel and you’ve done everything you can do to try and make something successful, the only thing left to do is learn as much as you can. If you’re in this situation now, keep your eyes open. If nothing else, you’ll learn things about how managers and employees react under different circumstances during crises that will help you for the rest of your career.