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MVP (Minimum Viable Product)

I recently took the official tour of the site of the 1976 Montreal Summer Olympics. If you have the chance, I recommend it. The self-deprecating tour guide described how the Montreal Olympic Committee started site development in 1973, but by 1975 had only scratched the surface.   Montreal was so far behind that the International Olympic Committee visited the site and threatened to send the 1976 Summer Olympics somewhere else. The Montreal Olympic Committee faced an existential crisis, they needed an MVP (a Minimum Viable Product). The Committee could have accepted failure and allowed the Summer Olympics to be held elsewhere. The project had been budgeted at $300 Million, but the delay and mismanagement, and the reactive need to use overtime and other expenses to run a construction site continuously (including heating a construction site during Montreal’s freezing winter), had exploded the budget to $1.1 Billion, and that was just to be short-term operational.

The Montreal Olympic Committee doubled down, ran the project 24 hours a day for 9 months, and had the site ready for the Games.   Hundreds of thousands of tourists visited Montreal for the Games, records were set, and the world saw Montreal as an international city.

Sunk Costs

The day after the Closing Ceremony, the Montreal Olympic Committee faced another decision. In its haste to have the stadium ready for the Games, the Committee had elected to defer construction of the 574 ft. inclined tower that would bear the weight of the stadium’s proposed roof. Montreal was the proud owner of an open-air stadium with seating for 76,000 in a climate that would render it unusable for 7-8 months out of the year. The budget to complete the tower and put a roof on the stadium was another $400 Million.

Once again, the Montreal Olympic Committee doubled down. They turned their focus to the horizon, envisioning a facility that would be a useful community amenity for the long term. They finished the tower (over a period of seven years) and put a roof on the stadium. Today, forty-three years after the Games, the stadium is in use 180 days out of the year for a variety of purposes.

This is all of us

Most of us are not making $1.5 Billion decisions, but we all face critical moments in our projects. “Go or No-Go”, “Fish or Cut Bait”, … these and other phrases come to mind. These are the moments when reality intrudes on fantasy and the project manager’s cognitive dissonance forces him or her to make a choice. Do they believe in the project, or not? What is the upside for success? What is the downside for failure? Is success even possible?  

In Montreal, the upside for success was material, but the downside of failure was immense. No other city had ever failed as an Olympic host. The City’s reputation was on the line.   Success meant being allowed to stay at the grown-up table on an international scale. Failure would have meant relegation to the kids-table.

After the Games, the decision was more about sunk costs. The City had invested over a Billion dollars and had devoted acres of land to a structure that had potential, but little value in its current state. Success meant that Montreal would have a venue that could host events for generations to come. Failure would have meant that the City would have lost money on a project that would cost more to tear down than it would cost to complete.

Lemonade from Lemons

Montreal’s near-term decisions were driven as much by downside consequences as the upside opportunities. Faced with the lemons of delay and mismanagement, the City shifted its focus to the longer term and today enjoys a site that not only includes a functional stadium that is used regularly, but also houses one of the country’s only Olympic swimming and diving training pools, a planetarium, a scientific bio-dome, an outdoor sports stadium that is home to the Montreal Impact MLS team, and office space for over 1,000 in the tower.

Whether your decision is to complete or abandon an MVP, or to reinvest or abandon sunk costs, consider the near term downside as well as the long term upside. When deciding whether to “Fish or Cut Bait”, project managers should also consider the ability to turn lemons into lemonade.