Hey HR: Don’t Throw Good Money After Bad
Posted on Wednesday, December 3, 2008 by Frank Roche
[Photo credit: Stephen Rees]
On my way to work at iFractal World Headquarters I walk past a construction project on 17th Street in Philadelphia that makes me shake my head. It’s been in the works for over a year now, and they’re finally above ground level. For six months, all they had was a giant pit that was dug 30 feet into the ground. Guess what they’re building? A luxury apartment building. And when I say “luxury” I mean apartments that *start* at $3 million. Every time I walk past there I want to scream: FILL IN THAT HOLE. STOP WHAT YOU’RE DOING. MOVE ON TO SOMETHING THAT WILL MAKE YOU MONEY.
We’ve all been victims of throwing good money after bad in our HR endeavors. When we have a good idea we want to see it through. Damn the torpedoes, full speed ahead. That’s a bad approach in the good times; it’s a disaster now.
If you’re building a building that has no chance of making money, knock it down. If you’re putting on training that lost its relevance, pitch it out. If your pay plans and performance management encouraged the kind of behavior that got us where we are, toss them aside. Don’t stick to what you know just because it’s on a project plan. And while you’re at it, deep six your project plans too. They’re half the reason that people get tunnel vision — they have to check off all the boxes on their plan. (I’m not saying “Don’t plan.” I’m saying, step back every once in a while and critically examine why you’re doing what you’re doing.)
Throwing good money after bad is what got us here. It sure isn’t what’s going to get us out. Spend every HR dollar like it’s your own and you won’t go wrong.
Ron Ulrici
Dec 3rd, 2008
I sure like the way you think, Frank. You've got me re-thinking some of my own projects!
Frank
Dec 3rd, 2008
Ron, we're birds of a feather. SNHR!
Jurgen Egges
Dec 4th, 2008
Though I like the thoughts, I am not sure if you want to toss out everything that will not make money. Okay, get rid of the building. But sometimes it's quite hard to see if something is going to make money. At least: the Google-guys did not think at first that they would make money!
And for being innovative and going where no man has gone before, the future and the output could be clouded. I agree that you don't have to go full speed. Just by experimenting with low cost -but probable- high impact projects you could get to good results, even if you are not sure if it brings in the money.
Frank
Dec 5th, 2008
Jurgen, good point about not tossing out everything. And innovation does matter…and sometimes that involves risk. It's so true that pilot testing works..and so does investment in projects that will pay off in the future. It's just with the economy like it is, it's time to step back and always think about the financial impact and the odds of success.