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 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 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? rbrendPtoGuFOkTSMQOzxner@ChacEgGqaylUnkmwIkkwoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

This article in its entirety was written by a 
          human being. No machine intelligence was involved in any way.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.

This article in its entirety was written by a human being. No machine intelligence was involved in any way.

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 rocking chairPoverty of Choice by Choice
Sometimes our own desire not to have choices prevents us from finding creative solutions. Life can be simpler (if less rich) when we have no choices to make. Why do we accept the same tired solutions, and how can we tell when we're doing it?
A voteDecisions, Decisions: II
Most of us have participated in group decision making. The process can be frustrating and painful, but it can also be thrilling. What processes do groups use to make decisions?
A sleeping dogRecovering Time: I
Where do the days go? How can it be that we spend eight, ten, or twelve hours at work each day and get so little done? To recover time, limit the fragmentation of your day. Here are some tips for structuring your working day in larger chunks.
Three adult male chimpanzees during a grooming sessionFavors, Payback, and Thoughtlessness
Someone at work who isn't particularly a friend or foe has asked you for a favor. What happens if you say no? Do you grant the favor? How do you decide what to do?
The USS Indianapolis on July 10, 1945, off Mare IslandCoping with Layoff Survival
Your company has just done another round of layoffs, and you survived yet again. This time was the most difficult, because your best pal was laid off, and you're even more fearful for your own job security. How can you cope with survival?

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

Forthcoming issues of Point Lookout

A meeting that's probably a bit too largeComing March 20: Top Ten Ways to Make Meetings More Effective
Meetings are just about everybody's least favorite part of working in organizations. We can do much better if only we take a few simple steps to improve them. The big one: publish the agenda in advance. Here are nine other steps to improve meetings. Available here and by RSS on March 20.
An informal meeting in a loungeAnd on March 27: Allocating Action Items
From time to time in meetings we discover tasks that need doing. We call them "action items." And we use our list of open action items as a guide for tracking the work of the group. How we decide who gets what action item can sometimes affect our success. Available here and by RSS on March 27.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrendPtoGuFOkTSMQOzxner@ChacEgGqaylUnkmwIkkwoCanyon.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:

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 500-1000 words in your inbox in one hour. License any article from this Web site. More info

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at X, 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.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
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.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.