Some Hidden Costs of Business Fads

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 seriesFirst in this series   Top    Next Issue

Is 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

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:

Recalcitrant Collaborators

Much of the work we do happens outside the context of a team. We collaborate with people in other departments, other divisions, and other companies. When these collaborators are reluctant, resistive, or recalcitrant, what can we do?

Problem-Solving Ambassadors

In dispersed teams, we often hold meetings to which we send delegations to work out issues of mutual interest. These working sessions are a mix of problem solving and negotiation. People who are masters of both are problem-solving ambassadors, and they're especially valuable to dispersed or global teams.

One Cost of Split Assignments

Sometimes management practices have unintended consequences. To reduce costs, we keep staff ranks thin, but that leads to split assignments for those with rare skills. Here's one way split assignments can lead to higher costs.

Contextual Causes of Conflict: II

Too often we assume that the causes of destructive conflict lie in the behavior or personalities of the people directly participating in the conflict. Here's Part II of an exploration of causes that lie elsewhere.

Nine Brainstorming Demotivators: II

Brainstorming sessions produce output of notoriously variable quality, but understanding what compromises quality can help elevate it. Here's Part II of a set of nine phenomena that can limit the quality of contributions to brainstorming sessions.

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

Forthcoming issues of Point Lookout

Coming February 20: Brainstorming and Speedstorming: I

Recent research suggests that brainstorming might not be as effective as we would like to believe it is. An alternative, speedstorming, might have some advantages for some teams solving some problems. Available here and by RSS on February 20.

And on February 27: Brainstorming and Speedstorming: II

Recent research into the effectiveness of brainstorming has raised some questions. Motivated to examine alternatives, I ran into speedstorming. Here's Part II of an exploration of the properties of speedstorming. Available here and by RSS on February 27.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenCQKKzKPRhOzrxYPEner@ChacVXThNNptuHQJQNcFoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

• Get 2001-2 in Geese Don't Land on Twigs (PDF, USD 11.95)
• Get 2003-4 in Why Dogs Wag (PDF, USD 11.95)
• Get 2005-6 in Loopy Things We Do (PDF, USD 11.95)
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, USD 11.95)
• Get 2009-10 in The Questions Not Asked (PDF, USD 11.95)
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, USD 28.99)

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

The Power Affect: How We Express Our Personal Power

Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.

• A recording of a program presented 6:00 PM June 29 (Eastern Time), Monthly Webinar, Technobility Webinar Series. You can earn 1.0 Category 'A' PDU by viewing this program. View this program now.