In Genève, is knowing when to stop a project a leadership skill?
When results disappoint, should a leader strengthen their commitment or reassess the project? For SHR — Swiss Human Resources and its « Leadership d'excellence » programme, the useful question concerns the criteria that distinguish justified persistence from escalating commitment.
What the literature establishes
Barry M. Staw (1976, Organizational Behavior and Human Performance) showed experimentally that personal responsibility for an initial decision could encourage further resource allocations following negative results. In this setting, continuing does not necessarily reflect a more favourable assessment of prospects. Commitment can also serve to justify the earlier choice.
The weight of sunk costs
Hal R. Arkes and Catherine Blumer (1985, Organizational Behavior and Human Decision Processes) describe the sunk cost effect: having already invested money, time or effort can increase the tendency to continue. A concern not to appear wasteful helps explain this phenomenon. For leaders, the challenge is to distinguish what has been spent and cannot be recovered from what continuing might still deliver.
The premature conclusion
One might conclude that a project should stop as soon as results turn unfavourable. Yet these studies provide no universal threshold for abandonment: credible prospects for learning or future returns may justify continuing. The relevant distinction separates future benefits and costs from past expenditure that can no longer be changed. (our executive and employee training programmes)
What the evidence cannot decide
These studies draw in part on experimental situations that do not reproduce the full complexity of business decisions. They establish neither the frequency of escalation in Geneva organisations nor the effectiveness of any particular local governance arrangement. In practice, stopping can entail future contractual, regulatory or human costs: these must be examined rather than confused with sunk costs.
A practical check in Genève
An exercise proposed within « Leadership d'excellence » could address a real project: a client relationship tool in private banking, a coordination system in an international organisation, collection development in luxury watchmaking or a risk platform in commodity trading. Before the next review, record an observable criterion for continuing, a condition for reassessment and their verification date, then have a manager who was not involved in the original decision review these criteria, subject to confidentiality rules. At the review, calculate the proportion of projects examined for which these criteria were written before the new results became available, retaining the dated documents. This measure checks decision-making discipline, not project profitability or the absence of bias. To go further: explore the Executive Leadership training in Geneva in the canton of Geneva, or browse our executive and employee training programmes in Switzerland.
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