Strategy is not enforced only by approving the right work; it is enforced by withdrawing resources from work that no longer deserves them.
Most organisations have a process for starting projects.
Fewer have an equally disciplined process for stopping them.
Approval is visible, constructive and politically attractive. Termination is harder. It can appear to admit that an earlier decision was wrong. Sponsors may have reputational capital attached to the initiative. Teams have invested effort. Suppliers may be engaged. Money has already been spent. Future benefits, however uncertain, remain emotionally easier to defend than the value of releasing resources for something else.
This is why project termination should be treated as a management capability rather than an exceptional act of failure.
Unger, Kock, Gemünden and Jonas examined this issue empirically in project portfolios. Their longitudinal study found a positive relationship between what they called project termination quality and portfolio strategic fit. It also found a more nuanced relationship with senior-management involvement: involvement supported termination quality up to a point, after which additional involvement was associated with worse termination quality.
The lesson is not that executives should withdraw from portfolio decisions.
It is that accountability and over-involvement are not the same thing.
The Strategic Context
A portfolio is continuously changing.
New evidence appears. Strategies move. Technology changes. Costs increase. Benefits weaken. Some initiatives become more attractive. Others become less relevant.
A portfolio that can add projects but cannot remove them will accumulate historic decisions faster than it can absorb new strategic priorities.
The result is predictable:
- scarce resources remain tied to low-value work;
- stronger initiatives wait;
- project counts remain high;
- strategic realignment becomes rhetorical rather than operational;
- sunk cost begins to influence future spending.
Termination is therefore one of the mechanisms through which a portfolio renews itself.
The decision is not simply whether an individual project is "bad".
The portfolio question is whether continued commitment remains justified relative to the alternatives.
Related article: Portfolio Prioritisation Is Not Ranking: Decide What to Accelerate, Defer and Stop
What Leaders Commonly Misread
The first mistake is treating termination as proof that the original decision was incompetent.
A rational investment can become unattractive when conditions change. A pilot may deliver enough learning to justify stopping. A technology path can be superseded. A market assumption can fail.
Termination can represent good adaptation.
The second mistake is waiting for failure to become undeniable.
By the time a project is visibly collapsing, much of the avoidable cost may already have been incurred.
The more strategically useful decision is often to stop work while it is still recoverable but no longer sufficiently justified.
The third mistake is focusing on whether the project can still be completed.
Almost any troubled project can be completed if enough time, money and political support are added.
The relevant question is whether completion remains the best use of enterprise resources.
The fourth mistake is allowing the project sponsor to become the sole judge of continuing justification.
Sponsors are valuable because they protect important initiatives. That same advocacy can become a source of escalation of commitment when objective conditions deteriorate.
The fifth mistake is assuming stronger executive involvement is always beneficial.
Unger et al.'s study suggests a more complex pattern. Senior management has an essential role in strategy, resource allocation and go/kill decisions, yet excessive intervention can degrade the quality of termination decisions.
Reframing the Issue
Termination should be reframed from:
failure management
to:
strategic resource renewal.
A high-quality termination does three things.
It detects that the initiative no longer deserves the same commitment.
It makes a clear and timely decision.
It releases resources in a way that allows the portfolio to redirect them.
This is why an unresolved "pause" can be more damaging than an explicit stop.
Projects can remain half-alive for months, consuming management attention, preserving supplier commitments and preventing staff from being reassigned with confidence.
A decision needs finality.
What the Research Adds: Termination Quality
The value of the Unger et al. paper is that it studies the quality of the process, not merely whether termination occurs.
Their concept centres on whether inappropriate projects are recognised and discontinued effectively.
The empirical work found termination quality positively associated with strategic fit. The study used a matched longitudinal sample of 54 firms with portfolios containing at least 20 concurrent projects.
That finding should be interpreted within the study's context rather than as a universal law. Even so, it supports an important executive proposition:
A portfolio's strategic alignment depends partly on how well leadership removes initiatives that no longer fit.
This extends the usual focus on project selection.
Strategic fit has an entry mechanism and an exit mechanism.
Related article: Strategy Changes. The Portfolio Must Change With It.
Why Executives Can Become Part of the Problem
Senior managers possess authority to stop projects, but authority can create distortion.
Executives can become emotionally associated with projects they sponsored. They may have privileged access to informal information that makes their judgement valuable, but they may also overestimate their ability to rescue an initiative.
The literature reviewed by Unger et al. describes behaviours such as protecting "pet projects", using personal rather than transparent prioritisation criteria, and escalating commitment after substantial investment.
The study's inverted-U finding is therefore strategically useful.
Too little executive involvement can produce weak authority and slow decisions.
Too much involvement can reduce process quality.
The target is decisive governance with disciplined distance.
Build an Exit Architecture Before You Need It
Termination becomes easier when criteria are designed before a project is politically vulnerable.
Possible exit triggers include:
- strategic objective materially changed;
- critical assumption invalidated;
- benefit confidence fell below an agreed threshold;
- cost to complete increased beyond investment tolerance;
- mandatory dependency failed;
- a superior alternative emerged;
- capacity required is no longer justified;
- risk became unacceptable;
- evidence from a pilot answered the strategic question.
Not every trigger should cause automatic cancellation.
It should cause continuing-justification review.
The purpose is to create permission to challenge the commitment before sunk cost becomes the dominant argument.
Related article: Business Cases Are Investment Hypotheses, Not Permission Slips
Decision Framework
Use a Termination Quality Review across six tests.
1. Relevance
Does the project still materially support a current strategic objective?
2. Value
Do the expected benefits still justify remaining cost, risk and capacity?
3. Evidence
What has changed since the last approval, and how reliable is that information?
4. Alternative use
What could the organisation do with the people, capital and attention released?
5. Decision integrity
Are sponsors, executives and reviewers using explicit criteria rather than personal attachment?
6. Closure quality
If the project stops, can commitments, knowledge, contracts and resources be closed or transferred cleanly?
A stop decision that is correct in principle but badly executed can still destroy value.
The Difference Between Stop, Pause and Redesign
Portfolio governance should distinguish several outcomes.
Stop when the investment no longer deserves continuation.
Pause when a specific uncertainty must be resolved and there is a defined decision date.
Redesign when the objective remains valuable but the current delivery vehicle is weak.
Accelerate when evidence strengthens the case and delay has material opportunity cost.
Continue when the original logic remains sound.
This avoids treating termination as the only response to deteriorating conditions.
It also prevents "pause" becoming a euphemism for decisions leadership is unwilling to make.
From Strategy to Execution
Immediate action: review the oldest, most repeatedly deferred and most weakly justified initiatives. Do not start with the reddest project. Start with projects whose strategic case is least clear.
Medium-term capability building: define continuing-justification gates, independent challenge and clear resource-release processes. Separate sponsorship from final portfolio authority where possible.
Track what happens to resources after termination. If released capacity is immediately absorbed by equally weak work, the portfolio has not improved.
Long-term strategic positioning: build a culture in which stopping an initiative can be evidence of good judgement. Reward timely learning and honest challenge, not only successful completion.
Related article: From Framework Knowledge to Executive Judgement: Diagnose Before You Recommend
Signals to Monitor
Watch for projects described as "too far in to stop"; repeated extensions without a refreshed investment case; strategic changes that produce no terminations; paused initiatives with no next decision date; sponsors controlling both advocacy and final review; project teams unable to release staff after cancellation; and executive meetings dominated by rescue plans for historically important initiatives.
Another warning sign is when the organisation celebrates project starts and completions but has no language for a well-judged termination.
Questions for the Leadership Team
- Which current projects would we not approve if they were proposed today?
- What evidence would cause us to terminate our largest strategic initiatives?
- Which executives are sufficiently independent to challenge sponsor attachment?
- Are we using "pause" because uncertainty is real or because the decision is uncomfortable?
- What happens to people and capital after a project is stopped?
- Do our governance processes distinguish project failure from intelligent strategic exit?
- Where might greater executive involvement improve a decision, and where might it distort one?
Closing Perspective
A portfolio remains aligned through both commitment and withdrawal.
Leaders have to protect valuable projects from noise and short-term pressure. They also have to recognise when yesterday's conviction has become today's sunk-cost trap.
High-quality termination is not an admission that strategy failed.
It is evidence that the organisation is still capable of changing its commitments when the facts change.
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