When to Shut Down that Product Development Project?

Yogi Berra once said, “The future ain’t what it used to be.”

This quote rings especially true in product development. Not every project lives up to its initial promise, and knowing when to shut it down can be the key to long-term success.

Most new product ideas start with excitement and high expectations. However, over time, some projects lose momentum. The worst-case scenario? You realize too late that you’ve wasted time, money, and resources on something that should have been shelved months ago.

A structured product development process—with clear evaluation points—can help prevent this problem. The classic approach includes these key steps:

• Requirements Document
• Conceptual Design
• Detail Design
• Design Verification Testing
• Pilot Production

Setting the Right Foundation with a Requirements Document

Every project should begin with a Requirements Document. This stage is crucial because it defines the product’s goals, technical feasibility, and budget constraints. Many projects actually end here—and that’s a good thing.

If meeting the required specifications isn’t feasible within budget, it’s better to recognize that early rather than push forward with wishful thinking.

Conceptual Design: Can This Product Succeed?

The Conceptual Design phase is often where uncertainty comes into play. Sometimes, it’s impossible to determine a product’s viability until deep into this phase. A key distinction to make is between technology development and product development. If the necessary technology isn’t fully developed yet, it’s wise to pause product development until a proven solution is in place.

Detail Design: Managing Costs and Complexity

During Detail Design, two major risk factors arise: unit cost and development cost. A useful strategy is to break this phase into two parts:

1. Create a Drawing Tree – This document outlines all components and subassemblies in the product. It helps validate manufacturing costs and engineering development expenses.
2. Use the Drawing Tree as a Project Plan – Once validated, the drawing tree defines the scope of each subassembly and its interfaces, ensuring a clear roadmap for the engineering and manufacturing teams.

This structured approach is particularly valuable in Electronic Engineering and Mechanical Engineering, where cost and design complexity can quickly escalate.

The Gating Process: A Framework for Decision-Making

To prevent poor investments, implement a formal gating process at each stage of product development. At every checkpoint, consider four options:

• Continue: If nothing has changed to impact the product vision, move forward.
• Pivot: If the current direction won’t yield a positive return, consider adjusting the product vision.
• Refine: If the project’s current design won’t be profitable, refine the requirements or design details before proceeding.
• Eliminate: If the product will not achieve a positive ROI, shut it down.

Having a structured review process helps avoid sunk-cost fallacy—where teams keep investing in failing projects simply because they’ve already put in time and effort.

Making Smart Product Development Decisions

Shutting down a project isn’t failure—it’s strategic. Redirecting resources to better opportunities can save your company from significant financial loss and wasted effort. Whether working on Electronic Engineering innovations or Mechanical Engineering designs, knowing when to pivot or stop is essential for long-term success.

For more insights on preventing product development failures, check out our white paper: Top 10 Reasons Why Product Development Projects Fail.