¦ Create Rival Ratholes: Two mistakes can be better than one. Consider the experience of Ashton-Tate, the leading maker of database software at the end of the 1980s. It needed a new version of its flagship program, but its development team scrapped one design after another. By the time the CEO assigned a new team to the task, it was too late. Ashton-Tate was dying, and the board fired the chief. Had he had two teams from the start, he might not have had a new program, but he would have realized the severity of his situation much sooner-and possibly saved the company by heroic measures.
¦ Spread the Risk: Some of the costliest projects, from new airplane engines to memory chips, are supported by alliances, not single companies. This cuts down the rewards of success-but also the size of the rathole.
¦ Manage Expectations: Big projects draw lots of attention from employees, investors and the tech-mad public. It is tempting to fuel the frenzy with grand claims. These make news. But leaders manage expectations. Often the hardest part of halting a muddled project is the loss of face that accompanies the decision. This loss is reduced sharply by having talked intelligently about the pursuit of innovation in the first place.
Follow these five rules, and the chances diminish that a pet project will vanish down the rathole. Look at Boeing. The airline maker certainly wasn’t married to supersonic technology. It spread its risks, essentially getting a silent partner, the U.S. government, to pick up a big piece of the tab. It understood customer needs and considered the social and political requirements needed to succeed with a supersonic plane. Finally, Boeing’s top managers had a realistic picture of the technical hurdles it faced.
Yet even Boeing fell short in some areas. It failed to manage expectations well, making its decision seem more like a black eye than it should. And it leaves the impression that the next generation of flight technology is a mountain that no one can climb, undercutting the company’s competitive image and feeding a potential hysteria over stagnation in commercial aviation. Finally, Boeing picked a time of financial stress-of layoffs and cutbacks in new jet orders-to drop the project. So even though the company obeyed the Law of the Rathole, it gives cynics the room to sneer that it merely responded to a short-term crisis by tossing its future overboard. And that’s the wrong message.