Cut Your Losses

Sorry I’ve been a bit slow updating posts this week, but like many of you, I have freelance work that I take on. In addition to working on an ongoing contract, I’ve been putting together a proposal for a new contract. Add to that my bout of hay fever and things start falling through the cracks. Fortunately, I’ve got good control over things now and you should be seeing a steady flow of posts coming your way, continuing my series on niche marketing. But if I was really swamped, I might have to consider cutting my losses on any work that was just not cost-effective.

Don’t be afraid to cut your losses if a project just isn’t working out. Doing this should be a last resort, of course. I don’t recommend giving up on a project just because it’s more difficult or more tedious than you expected. Those are the breaks. Jobs that just aren’t fun happen to all of us. And you need to finish those up. But sometime in your solo career you’re going to run up against a project that just sucks and starts costing you money.

If you determine that a project truly is doomed to failure, or that the cost far outweighs the potential, let it go and move on. The opportunity cost–that is, the cost of giving up another project–is too high when you know you’ve got a loser.

A friend of mine once took a job as a director at one of the biggest software companies in the world. One of the projects he was assigned to manage was more than 2 years behind schedule. He set up interviews with each developer, alone in his office, and reviewed what they’d been working on for the last few months.

Turned out the project leader of 12 programmers had split off half of the team and had them writing a C++ compiler from scratch because the compiler group wouldn’t add new features he had requested.

Forget about free C++ compilers, even a commercial compiler would have cost him less than $500. Instead, six programmers worked for months on a compiler that would ultimately have cost the company hundreds of thousands of dollars, with no added functionality.

My friend shut down the project and fired the project leader. Earlier oversight would have caught this rogue operation sooner, but the project leader was a longtime employee and upper management trusted him to make the right decision.

Just like it did with that project leader, it will sometimes happen that you can’t always make the right decision, or even decide when to cut your losses. Get somebody else’s advice when you’re pondering the wisdom of continuing down a path that seems fraught with danger.

Making decisions is a skill, no doubt about it. You can learn how to make better decisions and improve your decision making speed. Try getting hold of a simple project management tool to learn more. One that I like, that is simple to use and has a free trial period during which you can probably complete at least one simple project plan, is Project KickStart for Windows users. Or, check out some web-based project management tools like the ones I describe here.