November ’21 — Understanding sunk cost
I’ve previously written about our Digital Transformation journey and the various techniques that worked well. Something I want to do more of is talk about some of the challenges we’re coming up against.
Sunk Cost Fallacy
[Noun. The phenomenon whereby a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial.]
I’ve been thinking about this a lot over the last few weeks and it came up as recently as yesterday. We were discussing a project that has been in progress for some time, and we tried to take a step back to understand what the overarching priorities are for that area as a whole — and if this particular project, is still helping us achieve or get closer to those goals.
At what point do we draw a line under a project or initiative? Have we achieved everything we set out to? Has our thinking or our priorities changed? Are we still meeting our users’ needs? Are we still delivering value? And depending on some of the answers, Have we come to a natural conclusion?
This sort of honest reflection is important, particularly if a project has drifted. We’ve all been involved in projects that have pushed on, even when the right thing to do would have been to stop. Maybe that’s human nature, to see things through to the end, particularly if you’ve invested a lot of time, money and effort towards it.
Introduce regular feedback loops, rather than waiting for ‘gates’ and create an environment of psychological safety where teams can speak openly with ideas or raise concerns without dreading stakeholders.
A final point about value. There is absolutely value in doing an experiment and then coming to a conclusion that this discovery or alpha or project x should stop based on research or feedback — In fact, you’ll be saving time and money.
We should normalise stopping.
Some tips I always go back to:
- Be clear on why you’re doing the work
- Understand what problems you’re trying to solve
- Start small and iterate
- Regular feedback loops
Main focus for me over the last month has been trying to mobilise the four technology programmes within our Transformation portfolio. These build on the great work done over the last 12 months building the foundational Cloud and Data platforms.
Since then the portfolio has grown to 4 programmes covering:
- Technology (Cloud, Legacy, Sharepoint, Apply for funding)
- Corporate (Foundational processes i.e. procurement, Document Mngt, Workforce planning and Risk Mngt)
- Data Transformation (BI, MI, Governance, Data Platform, Strategy)
- Rapid solutions (Low code. Operating within guardrails to deliver at pace)
We’re all familiar with the snails pace and red tape getting approvals for large programmes can be. Oh and a high number of Powerpoint presentations!.
Oh and I also took a week off. Which was great. ☀️