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 nonmeasurable 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 nonmeasurable 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:

Own Your Space

Since we spend so much of our waking lives in our offices, it's surprising how few of us take control of our immediate surroundings. If you do — if you make your space uniquely yours — you'll feel better about the time you spend at work.

How We Avoid Making Decisions

When an important item remains on our To-Do list for a long time, it's possible that we've found ways to avoid facing it. Some of the ways we do this are so clever that we may be unaware of them. Here's a collection of techniques we use to avoid engaging difficult problems.

Making Meaning

When we see or hear the goings-on around us, we interpret them to make meaning and significance. Some interpretations are thoughtful, but most are almost instantaneous. Since the instantaneous ones are sometimes goofy or dangerous, here's a look at how we make interpretations.

Finding Work in Tough Times: Marketing

We aren't accustomed to thinking of finding work in tough times as a marketing problem, but it helps. Here are some suggestions for applying marketing principles to finding work in tough times.

Getting Value from Involuntary Seminars

Whatever your organizational role, from time to time you might find yourself attending seminars or presentations involuntarily. The value you derive from these "opportunities" depends as much on you as on the presenter.

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

Forthcoming issues of Point Lookout

Coming October 27: Five Guidelines for Choices

Each day we make dozens or hundreds of choices — maybe more. We make many of those choices outside our awareness. But we can make better choices if we can recognize choice patterns that often lead to trouble. Here are five guidelines for making choices. Available here and by RSS on October 27.

And on November 3: Way Over Their Heads

For organizations in crisis, some but not all their people understand the situation. Toxic conflict can erupt between those who grasp the problem's severity and those who don't. Trying to resolve the conflict by educating one's opponents rarely works. There are alternatives. Available here and by RSS on November 3.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenEQuetChPjwYBDxmgner@ChacxXTxBssoFmfDfMugoCanyon.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, )
• Get 2003-4 in Why Dogs Wag (PDF, )
• Get 2005-6 in Loopy Things We Do (PDF, )
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
• Get 2009-10 in The Questions Not Asked (PDF, )
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )

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 500-1000 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 June 29, 2017, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
   
• A recording of a program presented June 29, 2017, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
   

Bullet Points: Mastery or Madness?

Decision makers in modern organizations commonly demand briefings in the form of bullet points or a series of series of bullet points. But this form of presentation has limited value for complex decisions. We need something more. We actually need to think. Briefers who combine the bullet-point format with a variety of persuasion techniques can mislead decision makers, guiding them into making poor decisions. Read more about this program.

• A recording of a program presented June 24, 2020, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
   
• A recording of a program presented June 24, 2020, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.