Most likely. Most likely. Most likely. Most likely.
Strategic initiatives proliferate, bewitching executives and burying the front line.
Remember when Harry Potter, Ron Weasley, and Hermione Grainger visit the Lestrange Vault to retrieve a Horcurx? Every object quickly starts multiplying, producing replicas. It happens so rapidly that Harry, Hermione, and Ron drown in the avalanche of multiplying objects, nearly crushed by them.
The Gemino Curse, created by two reclusive witches Helixa and Syna Hyslop, duplicates objects repeatedly, creating an avalanche of replicas that can quickly fill all available space. According to legend, the replicated objects are inert and do not have the potency of the original object, but visually they are indistinguishable from the original.
In many companies—strategic initiatives—are afflicted with the Gemino curse. They multiply, proliferate, and weaken. They drown out front-line employees, middle managers, customers, senior executives, and even the CEO. No one can demonstrate any tangible value they produce. Yet, many in senior management insist they be retained and expanded.
Initiative Proliferation: A Case Study
A company’s project management division supervised more than 200 projects worth $800 million. It had 80 people including 10 senior executives, 26 project directors, and 44 front-line employees. While the project directors and front-line employees executed the projects, the senior leaders spent their remaining time advancing strategic initiatives related to project management. The division deployed 97 strategic initiatives, costing $31 million in just one financial year. All had to be completed by project directors and front-line employees. One project manager stated: “we are all drowning… overwhelmed. Senior leaderships’ initiatives take up all the time. I really don’t have time for my regular day job in between filling out form after form in our company initiative management system.”
The senior executives decided to confront the problem head on. In an internal assessment all 80 division employees rated the initiatives on a 10-point scale. Here are the effectiveness scores effectiveness of the 97 initiatives:
- 20 initiatives were rated 1-2 (completely ineffective, haven’t heard of it)
- 56 initiatives scored 3-5 (very ineffective, time sink)
- 12 scored 6-7 (unsure, possibly effective)
- 9 initiatives scored 8-10 (effective, definitely effective)
STOP: Before you read any further, what would you guess senior leadership should do? If you were a senior leader in this division, what would you do?
The Psychology of Staying Put
Our forthcoming book FOCUS discusses many reasons why executives stay put and proliferate initiatives. It’s the all-too-familiar-by-now sunk cost fallacy or escalation-of-commitment bias. In the widely documented sunk-cost fallacy—executives keep investing in a course of action regardless of its likelihood of success or failure. A study of 209 full-time senior managers asked them to evaluate a new product launch. Based on the initial description, 90% of the managers recommended a “Go” decision, none of them recommended “Stop” even after obtaining information about the product’s moderate performance two years after launch! There are many reasons for people to stay put, as explained in FOCUS.
- There is the comfort of familiarity, and so executives stay put in an existing initiative or a way of doing things because you feel comfortable doing it. After all, you’ve been doing it for so long.
- Executives are loss averse, which means they take more risks to avoid further losses. An unsuccessful initiative puts executives in a loss domain due to which he or she is more motivated to take risk, invest more with the hope of turning it around.
- Each initiative comes with a set of resources that the executive controls. Resource dependence is the idea that it’s hard to let go of an initiative because it may mean giving up resources—people, budget, relationships, and potentially power!
READ ON: They decided to add two initiatives to increase the effectiveness of their current portfolio of initiatives, and added $9 million to the budget.
Now What?
Look around in your company, especially if you are a senior executive. Are there initiatives that someone is pushing without being able to concretely link to an outcome such as increased customer value? Are they supporting the initiative based on a demonstrated link between initiative-related KPIs and value? Or do they simply believe such a link exists? If it is the latter, they must be using mythical numbers, relying on leaps of faith.
Moreover, it not enough to just know that your company is staying put with a large number of initiatives whose efficacy is unknown or known to be dismal. For senior executives, especially CEOs, it is more important to have a structured system to evaluate the efficacy of different initiatives, rank order them, and THEN make the difficult choices. Our book FOCUS provides a step-by-step approach showing how companies can to do precisely that.