Every organization has at least one project that should have ended months ago. Recognizing when to pull the plug is one of the hardest skills in leadership.
Leaders who have been through difficult endings in their own lives often develop a clearer eye for this. When you’ve experienced firsthand that short-term pain can lead to long-term growth, you stop treating endings as failures. You start seeing them as part of how things get better.
The Sunk Cost Trap
We’ve all been there. A project that made sense when it started has been limping along for quarters. The team is demoralized. Resources are being pulled from higher-potential work. But nobody wants to be the one who calls it.
The usual justification: “We’ve invested so much already.” This is the sunk cost fallacy dressed up as responsibility. The time and money you’ve spent are gone regardless of what you do next. The only question that matters is whether continuing creates more value than stopping.
The Pruning Framework
Henry Cloud’s book Necessary Endings offers a useful mental model. Think of your organization like a tree. Healthy trees get pruned. Not because the branches are dead, but because removing some allows others to thrive.
Cloud identifies three types of branches:
- Dead branches: Projects that have clearly failed. These are easy to cut.
- Sick branches: Projects showing signs of decline but still functioning. Harder to cut because they’re “not that bad.”
- Healthy branches consuming too many resources: This is the hardest category. The project works, but it’s starving something more important.
Most organizations handle the first category reasonably well. The second and third are where projects go to slowly die while draining resources.
The Values Filter
When a project is in the gray zone, data alone won’t give you the answer. You need a different question: “Does this still align with our mission?”
This shifts the conversation from performance metrics to purpose. A project might be hitting its numbers but pulling the organization away from where it needs to go. Or it might be underperforming but still central to the mission.
The values filter also removes some of the emotional charge. You’re not saying the project was a mistake or that the people involved failed. You’re saying the organization has evolved and this no longer fits.
Hurt vs. Harm
Ending a project hurts. People put time and identity into their work. Acknowledging that something didn’t pan out is uncomfortable.
But there’s a difference between hurt and harm. Hurt is the short-term emotional cost of making a hard decision. Harm is the long-term damage of not making it.
When you delay a necessary ending, you harm morale across the organization. High performers see resources going to low-potential work. They see leadership unwilling to make hard calls. Eventually, they leave.
How to Do It
Once you’ve decided to end a project:
- Be direct about the reasoning. Don’t hide behind vague corporate language. Explain what changed and why this no longer fits.
- Acknowledge the work. The effort was real even if the outcome wasn’t what you hoped.
- Move quickly. Prolonged wind-downs are worse than clean endings.
- Redeploy the people. Your best people from the cancelled project should be the first ones staffed onto something new.
The goal isn’t to make ending projects feel good. It’s to make your organization capable of ending them when necessary, so resources flow to where they create the most value.