Not every move a company makes is successful, be that project or personnel. Yet business experts say oftentimes management will continue to back a failing effort for a litany of reasons.
One of the biggest? Ego.
"We don't want to be seen - or see ourselves - as failures," writes Adam Grant, Wharton professor and author. "If you just invest a bit more in that underperforming employee, you can save face and protect your ego, convincing your colleagues (and yourself) that you were right all along."
And it's not just people. Grant points to Polaroid, which was on the forefront of digital photography technology in the early '80s. Yet the former consumer powerhouse stuck so solidly to film sales, it was critically late advancing its digital line, losing its dominance and eventually winding up bankrupt.
Grant outlines three steps organizations can take to objectively assess an effort or employee to ensure they're not throwing good money after bad:
1. Find a neutral party. When determining the continuation of an effort, do not use the person (or people) who gave the project a green light. This removes the potential of ego bias.
"It's valuable to delegate the decision to someone who can take an unbiased look at the facts," Grant notes.
2. Require accountability for decisions, not just results. If an organization is only focused on results, that "allows employees to make faulty decisions along the way, convincing themselves that the ends will justify the means," Grant says.
Mandating accountability on the decision level will entice employees to more carefully consider the moves they make if they have to answer for them.
3. Put others ahead of you. If you back a project and it's failing, don't think about how it affects your ego or career. Instead, think about how it would impact others. Research shows those who act with others in mind are more likely to make a more impartial evaluation, Grant says.