Kill Criteria: the antidote to sunk cost fallacy
In my twenty years of coaching executives, athletes, & leaders, I've witnessed countless projects that should have been terminated months—sometimes years—before they finally were. The reason? Leaders who fell victim to the sunk cost fallacy, throwing good money after bad because they couldn't bear to "waste" their initial investment.
The most successful individuals that I’ve worked with have learned a counterintuitive truth: knowing when to kill a project is just as valuable as knowing when to launch one. This is where "kill criteria" become indispensable.
What Are Kill Criteria?
Kill criteria are predetermined, objective benchmarks that automatically trigger project termination. Think of them as circuit breakers for your strategic initiatives. Before you invest the first dollar or dedicate the first resource, you establish clear conditions under which you'll pull the plug—no emotions, no second-guessing, no committee meetings to debate sunk costs.
These criteria might include missing revenue targets by 30% after six months, failing to achieve user adoption milestones, or discovering that market conditions have fundamentally shifted. The key is setting them early, when your judgment isn't clouded by investment bias and sticking to them.
The Sunk Cost Trap
The sunk cost fallacy whispers seductively: "We've already invested so much; we can't stop now." But every additional dollar spent on a doomed project is a dollar not invested in your next breakthrough opportunity. I've seen waste months or years of time pouring themselves into failing initiatives simply because they couldn't psychologically write off their initial investment.
The most dangerous phrase in any discussion isn't "this won't work"—it's "we're too far in to quit now."
Building Effective Kill Criteria
Effective kill criteria share three characteristics: they're specific, measurable, and time-bound. Think of them as the Yang to KPIs Yin. Instead of vague statements like "if the project isn't working," you need concrete metrics: "If we haven't achieved 10,000 DAUs within four months" or "If development costs exceed budget by 25%."
Equally important is establishing review checkpoints. Monthly or quarterly assessments ensure you're actually monitoring these criteria rather than letting them gather dust in project documentation.
The Strategic Advantage
Organizations with robust kill criteria consistently outperform their peers because they reallocate resources faster. They fail cheaply and pivot quickly. Most importantly, they create a culture where it's safe to acknowledge when something isn't working—before it becomes a crisis.
Your next project roadmap (pre-mortem anyone?) should include two equally important elements: success metrics and kill criteria. One tells you where you're going; the other ensures you don't waste years wandering in the wrong direction.
The bravest decision you'll make as a leader isn't starting a project—it's knowing when to stop.
