Maximum Megahertz Project Olaf Gundersen, the CEO of Wireless Telecom Company, is in a quandary. Last year he accepted t

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Maximum Megahertz Project Olaf Gundersen, the CEO of Wireless
Telecom Company, is in a quandary. Last year he accepted the
Maximum Megahertz Project suggested by six up-andcoming young
R&D corporate stars. Although Olaf did not truly understand the
technical importance of the project, the creators of the project
needed only $600,000, so it seemed like a good risk. Now the group
is asking for $800,000 more and a six-month extension on a project
that is already four months behind. However, the team feels
confident they can turn things around. The project manager and
project team feel that if they hang in there a little longer they
will be able to overcome the roadblocks they are
encountering—especially those that reduce power, increase speed,
and use a new technology battery. Other managers familiar with the
project hint that the power pack problem might be solved, but “the
battery problem will never be solved.” Olaf believes he is locked
into this project; his gut feeling tells him the project will never
materialize, and he should get out. John, his human resource
manager, suggested bringing in a consultant to axe the project.
Olaf decided to call his friend Dawn O’Connor, the CEO of an
accounting software company. He asked her, “What do you do when
project costs and deadlines escalate drastically? How do you handle
doubtful projects?” Her response was, “Let another project manager
look at the project. Ask: ‘If you took over this project tomorrow,
could you achieve the required results, given the extended time and
additional money?’ If the answer is no, I call my top management
team together and have them review the doubtful project in relation
to other projects in our project portfolio.” Olaf feels this is
good advice. Unfortunately, the Maximum Megahertz Project is not an
isolated example. Over the last five years there have been three
projects that were never completed. “We just seemed to pour more
money into them, even though we had a pretty good idea the projects
were dying. The cost of those projects was high; those resources
could have been better used on other projects.” Olaf wonders, “Do
we ever learn from our mistakes? How can we develop a process that
catches errant projects early? More importantly, how do we ease a
project manager and team off an errant project without
embarrassment?” Olaf certainly does not want to lose the six bright
stars on the Maximum Megahertz Project. Olaf is contemplating how
his growing telecommunications company should deal with the problem
of identifying projects that should be terminated early, how to
allow good managers to make mistakes without public embarrassment,
and how they all can learn from their mistakes.
What are the problems you can identify in the company?
What are the symptoms of these problems?
WhatcanyousuggesttoOlafintheshort-runtoeliminatetheseproblemsfrom
the company?
What can you suggest to Olaf in the long-run (within 6-12
months) to eliminate
these problems from the company?