Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 11, Issue 1;   January 5, 2011: Some Hidden Costs of Business Fads

Some Hidden Costs of Business Fads

by

Adopting business fads is an expensive organizational pattern, with costs that extend beyond what can be measured by the chart of accounts most organizations use. Here are some examples of the hidden costs of business fads.
Two barnacles affixed to the shell of a green mussel

Two barnacles affixed to the shell of a green mussel. Barnacles adhere permanently to substrates by means of a cement they secrete. In some substrates, such as stainless steel, they etch the surface before cementing themselves to it. Fads might do something similar. If adopting organizations must alter themselves as part of the adoption process, the fad gains permanence, because the cost of replacing the fad with something new now includes re-alteration of the organization. Photo by Buck Albert courtesy U.S. Geological Survey.

Most business fads do have at least some inherent value — that's why so many organizations adopt them. But as we saw last time, their inherent value can degrade as the fad itself gathers adopters. In this part of our exploration, we turn our attention to the hidden costs associated with adopting ideas or methods that have acquired — or that eventually do acquire — fad status.

Costs can be internal
When estimating the costs of adopting an idea or method, we tend to focus on cash outlays, but many costs of adoption can be internal. Costs can appear as lost production, lost sales, compromised quality, confusion, political strife, degraded morale, employee cynicism, and much more, most of it difficult to measure. Examples of the sources of these losses include time spent training and learning, employees recognizing the fad potential of the new method, and disruption of interpersonal relationships.
Since adopting a new idea or method can be expensive in both measurable and non-measurable costs, be very certain that it isn't a fad. Fads usually just aren't worth adopting.
Costs can lag adoption
Many of the costs of adopting fads, espSome fads are stickyecially the non-measurable costs, appear not in advance of or during the adoption effort, but much later. For instance, companies that downsized aggressively in the 1990s lost access to many of their experienced employees and much of their organizational memory, from both the downsizing and the voluntary turnover it inevitably stimulates.
Adopting a fad can leave a lasting legacy of recurring cost that can hobble the organization for years.
Investments in fads can be volatile
The investments we make when adopting fads are different in character from investments we make when buying equipment, or creating new products, or outfitting new space. Some investments in fads are volatile because we have little ability to protect them.
Fads that involve personal training are more likely than most to carry with them volatile costs. For instance, when we purchase a computer, we have the ability to keep it in our possession. But when we train an employee to use the Myers-Briggs model, and spend real money to determine that employee's Myers-Briggs type, that investment evaporates when the employee leaves the company.
Some fads are sticky
One of the defining features of fads is that they eventually pass on. After adopting a fad, we adopt something else, undoing the work we did when we adopted it. But some fads, once adopted, are very difficult to leave behind. They stick.
Methods and ideas that require changes to policies and procedures are often stickiest, because changing policies and procedures is difficult by design. Especially sticky are fads involving human resources procedures. When adopting them we rarely consider the costs of letting go.

Next time we'll explore why business fads form. Next in this series First in this series  Go to top Top  Next issue: Why Do Business Fads Form?  Next Issue

101 Tips for Managing ChangeIs your organization embroiled in Change? Are you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt? Read 101 Tips for Managing Change to learn how to survive, how to plan and how to execute change efforts to inspire real, passionate support. Order Now!

Your comments are welcome

Would you like to see your comments posted here? rbrentLhQNJoLLymAVzBiner@ChacvGEkhbsvCQJUwSJtoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Personal, Team, and Organizational Effectiveness:

A forest glenGames for Meetings: Part I
We spend a lot of time and emotional energy in meetings, much of it engaged in any of dozens of ritualized games. Here's Part I of a little catalog of some of our favorites, and what we can do about them.
Agreeing to a dealObstacles to Compromise
Compromise is the art of devising an approach acceptable to all parties. A talent for compromise is rare. What makes finding compromises so difficult?
A broadcast-only sporting event during a pandemicSocial Distancing for Pandemic Flu
It's time we all began to take seriously the warning about a possible influenza pandemic. Whether or not your organization has a plan, you can do much to reduce your own chances of infection, and the chances of mass infection, by adopting a set of practices known as social distancing.
The Boy Who Cried Wolf, illustrated by Milo Winter in a 1919 Aesop anthologyWhy Don't They Believe Me?
When we want people to believe us, and they don't, it just might be a result of our own actions or demeanor. How does this happen?
Heiltskuk Icefield, British ColumbiaFinding the Third Way
When a team is divided, and agreement seems out of reach, attempts to resolve the conflict usually focus on the differences between the contrasting positions. Focusing instead on their similarities can be a productive technique for reaching agreement.

See also Personal, Team, and Organizational Effectiveness for more related articles.

Forthcoming issues of Point Lookout

A vizsla in a pose called the play bowComing April 26: Why Dogs Make the Best Teammates
Dogs make great teammates. It's in their constitutions. We can learn a lot from dogs about being good teammates. Available here and by RSS on April 26.
A business meetingAnd on May 3: Start the Meeting with a Check-In
Check-ins give meeting attendees a chance to express satisfaction or surface concerns about how things are going. They're a valuable aid to groups that want to stay on course, or get back on course when needed. Available here and by RSS on May 3.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenrKZKLMxHOnkacyNmner@ChacHpSeDbmljEUWaflfoCanyon.com or (617) 491-6289, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

Changing How We Change: The Essence of Agility
MasteChanging How We Change: The Essence of Agilityry of the ability to adapt to unpredictable and changing circumstances is one way of understanding the success of Agile methodologies for product development. Applying the principles of Change Mastery, we can provide the analogous benefits in a larger arena. By exploring strategies and tactics for enhancing both the resilience and adaptability of projects and portfolios, we show why agile methodologies are so powerful, and how to extend them beyond product development to efforts of all kinds. Read more about this program. Here's an upcoming date for this program:

Creating High Performance Virtual Teams
Many Creating High Performance Virtual Teamspeople experience virtual teams as awkward, slow, and sometimes frustrating. Even when most team members hail from the same nation or culture, and even when they all speak the same language, geographic dispersion or the presence of employees from multiple enterprises is often enough to exclude all possibility of high performance. The problem is that we lead, manage, and support virtual teams in ways that are too much like the way we lead, manage, and support co-located teams. In this program, Rick Brenner shows you how to change your approach to leading, managing, and supporting virtual teams to achieve high performance using Simons' Four Spans model of high performance. Read more about this program. Here's an upcoming date for this program:

The Race to the South Pole: Ten Lessons for Project Managers
On 14The Race to the Pole: Ten Lessons for Project Managers December 1911, four men led by Roald Amundsen reached the South Pole. Thirty-five days later, Robert F. Scott and four others followed. Amundsen had won the race to the pole. Amundsen's party returned to base on 26 January 1912. Scott's party perished. As historical drama, why this happened is interesting enough, but to organizational leaders, business analysts, project sponsors, and project managers, the story is fascinating. Lessons abound. Read more about this program. Here's an upcoming date for this program:

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Follow me at Google+ or share a post Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
21st Century Business TravelAre your business trips long chains of stressful misadventures? Have you ever wondered if there's a better way to get from here to there relaxed and refreshed? First class travel is one alternative, but you can do almost as well (without the high costs) if you know the tricks of the masters of 21st-century e-enabled business travel…
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.