Do you throw good money after bad?

When I run strategy workshops I often open with a quote from Roger L. Martin:

“True strategy is about placing bets and making hard choices.”

Good strategy includes gambles because we cannot predict the future with absolute certainty. Sometimes we will get it wrong. We make the wrong decisions. 

Shopify’s CEO recently admitted their bet on sustained growth had been off. Twitter’s Jack Dorsey confessed he had not acted wisely when he built up Twitter. Facebook will be making the same admission about the metaverse any day now as they lay off thousands.

But how much damage was done before they declared defeat? Did they see the problem but hoped it would go away if they just persisted? Did they have to be threatened by the board in order to change course?

I see this all of the time. Leaders learn that their chosen technology will not support their vision without a huge increase in costs. They push on while budgets double and triple. Or they drop critical scope to stay within budget, delivering a solution that is dead on arrival. 

Investments are not just numbers. They carry emotional commitments. Failure is about lost face and cracked reputations as much as money lost. Leaders at every level ignore signs and cling to thin hopes as the building falls apart around them. 

Professional poker player Annie Duke recently released her new book, Quit: The Power of Knowing When to Walk Away. Her premise is that the biggest winners are those who know when to fold. They practice strategic quitting. 

I worked with WestJet on a project to build their own reservation system. While I worked on impact assessment, three Project Managers came and went, unable to make significant progress. Developers kept hitting major setbacks. Finally the company shut the whole thing down. It was a big writedown for the company, but it could have been so much worse. They called it right.

Are you investing more time, energy, or resources in a person or project that you know is never going to improve significantly? Will the change you’re supporting hurt more than it helps? Is there a better option? Is it time to admit defeat?

If it’s time to take one for the team, get it over with. It’s the first step to the next win. Be a strategic quitter.

Thoughtfully yours,
Jeff Skipper

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