Why Bad Projects

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You CAN STILL FIND THEM on eBay, sleek

and gleaming videodisc 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 prot type 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.

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Why Bad Projects Are So Hard to Kill

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. Of course, hindsight is 20/20; it's easy after the fact to criticize bold bets that didn't pay off. But too often managers charge ahead in the face of mounting evidence that success is pretty well unachievable. 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 1 call collective belief, and it can lead an...