Pet projects – creative outliers or strategic stumbling blocks?

Strategic Management of favourite projects

What are Pet Projects?

“Pet projects are projects or initiatives started by individuals or small teams within an organisation out of passion, personal interest, or a spontaneous idea. At the same time, these projects are often characterised by a certain independence from the company’s usual processes and priorities. Some characteristics that apply to many pet projects are therefore:

• Personal motivation: The driving forces behind pet projects are often the personal interests, passions, or convictions of those involved. The initiators have a special fondness for the project and are committed to it, even if the project is not officially backed. Such projects are therefore usually initiated by managers or employees who strongly believe in the success of their idea.
• Lack of formal approval: Pet projects are often started without formal approval or official support within the organization. They therefore usually exist outside the regular project portfolio and have no clear link to the strategic goals of the organization. It can also happen that they are in contrast to the company’s objectives and thus boycott them.
• Resource commitment: These projects can tie up significant resources in terms of time, budget, or personnel that are earmarked for officially approved projects. This can lead to inefficient use of available resources.
• Lack of transparency: As pet projects are often carried out informally and without official structures, they often lack transparency. This can lead to important information not being shared and collaboration within the team or organization suffering.
• Major risk: Pet projects often do not adhere to basic project management guidelines. As a result, important basics such as market analyses, cost-benefit analyses or a risk assessment are usually missing. This significantly increases the risk of the project failing or turning out to be a flop.

The main problems of Pet Projects

Pet projects can generate innovative ideas and approaches that might not otherwise be pursued. In addition, employees who work on their pet projects are often highly motivated and committed, which can lead to greater job satisfaction. At the same time, such projects can serve as prototypes or experiments that can later be integrated into official projects.
However, pet projects can also have a negative impact. They often require considerable amounts of money and time. If the projects fail, for example, or do not fit in with the corporate strategy, they can waste valuable resources or lead to resource conflicts. They distract employees from important, strategic projects and can lead to conflicts within the team, especially if individual projects are prioritized or perceived as more important than official projects. This can lead to dissatisfaction within the team and thus impair collaboration. As pet projects often exist outside the official project management structures, they lack appropriate monitoring, control, and documentation.

Famous Pet Projects

There are numerous well-known examples of pet projects. Some of them have led to problems, while others have proven to be a success and have been positive for the company.

1. Google Glass:

Google Glass was an ambitious project from Google X, Google’s experimental research lab. The data glasses were intended to revolutionize the way people interact with technology. Despite initial enthusiasm from a small, enthusiastic team, the project had several problems, including privacy concerns, an unreasonably high price, and a lack of clear use cases. For example, there was a lack of market analysis before the project began, which meant that the product ultimately failed commercially and was withdrawn.

2. Microsoft’s Zune:

The Zune was Microsoft’s attempt to compete with Apple’s iPod. It was a portable media player that was launched in 2006. However, the product was never able to keep up with the competition, partly because the market launch was late, the marketing strategy was inadequate, and the product was less innovative than the competition. While the Zune was not necessarily a typical pet project, it was strongly supported by a small, enthusiastic group within Microsoft. The project received resources and attention that might have been better invested in other, more strategic initiatives.

3. Amazon’s Fire Phone:

In 2014, Amazon launched the Fire Phone, a smartphone with unique features such as a 3D user interface and integrated Amazon software. It was an ambitious project that was strongly supported by Jeff Bezos. However, it was developed without sufficient market analysis and user feedback, so it turned out to be a flop. The Fire Phone was criticized for its high price, lack of integration with Google services, and poor user experience. Amazon ultimately had to write off large losses.

4. Sony PlayStation:

The PlayStation began as a side project by Ken Kutaragi, an engineer at Sony who originally developed a sound chip for the Super Nintendo Entertainment System (SNES). He convinced Sony to invest in the development of its console, and the success of the first PlayStation, released in 1994, proved him right. The product revolutionized the video game industry and established Sony as one of the leading console manufacturers worldwide.

5. Google’s Gmail :

At Google, employees are allowed to use 20 percent of their working time for their projects that are not necessarily related to their official duties. Gmail began as a 20% project by a Google engineer. After its launch in 2004, Gmail revolutionized email usage with large storage space and innovative features such as conversation threads. It quickly became one of the most widely used email services in the world and is now a central part of Google’s offering.

6. Post-it Notes from 3M:

The invention of Post-it Notes began as a side project by Dr. Spencer Silver, a 3M scientist who developed a weak adhesive that initially had no obvious use. A colleague of his, Art Fry, recognized the potential and developed the sticky notes. Post-it notes were launched commercially in 1980 and have been a huge success ever since. They are still an everyday office product today and have brought 3M considerable sales and market presence.

7. Facebook’s Like Button:

Facebook’s Like button was also originally a pet project within the company. A small team worked on developing this simple but effective feature. It was introduced in 2009 and quickly changed the way users reacted to content on Facebook. It became a central element of the social network and has contributed significantly to user engagement and interaction rates.

The right way to manage pet projects

It can happen that during the implementation of a project you suddenly realize that you have ended up with a pet project. For example, if a manager has a particular interest in a project, they may gradually expand its scope, transforming a small project into a much larger one. This can happen even if it contradicts the corporate strategy or exceeds the available resources. If you are already in the middle of such a project, it can be difficult to get out of the situation cleanly. It is therefore important to take a structured approach to recognizing such projects before they begin.

1. Clear project management guidelines

Initiators of pet projects often circumvent established guidelines, such as a formal approval process. To avoid projects that subsequently turn out to be a flop, it is therefore important to establish an approval process with clear criteria and to insist on compliance. For example, the strategic relevance, resource requirements, and potential benefits can be clarified in a business case, a charter, or a cost-benefit analysis before the project begins. An early risk assessment and a market analysis can also help to reject projects that do not make strategic sense.

2. Project documentation and resource management

The example of Google shows that it can be useful to implement even obvious pet projects to motivate employees. In such cases, however, it is important to ensure that all projects are properly documented to guarantee transparency and traceability. At the same time, there should be clear prioritization processes to ensure that the necessary resources are always available for strategically important projects. Effective project portfolio management can ensure that pet projects are evaluated and correctly prioritized in the context of the overall project portfolio.

3. Regular review

Especially if you are already stuck in a manager’s pet project, you need to handle the delicate situation well. It is not always possible to open the door and confront the manager. However, regular status reports presented to a group of stakeholders can allow a project manager to suggest changes to the project or even its closure. By involving key stakeholders at an early stage, project managers can secure their support to keep the project in line with the company’s objectives. Regular feedback loops and retrospectives also help to ensure the strategic relevance of the project.

Conclusion

Pet projects can lead to great success and be a valuable source of innovation and employee engagement. However, without strategic management and clear guidelines, they can also present significant challenges and resource conflicts. Through targeted evaluation, transparent communication, and regular reviews, companies can harness the potential of these projects and ensure that they contribute to the achievement of corporate goals.

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