In Lugano, is knowing when to stop a project a leadership skill?
Within SHR — Swiss Human Resources' « Leadership d'excellence » programme, one question deserves careful attention: how should leaders decide whether to continue a project when its results disappoint? For managers in banking, fashion, trading and Italian-speaking family SMEs in Lugano, the challenge is to distinguish a still-credible opportunity from the need to justify a past decision.
What the literature establishes
Barry M. Staw (1976, Organizational Behavior and Human Performance) demonstrated experimentally that responsibility for an initial decision could lead people to commit more resources after negative feedback. In his study, participants responsible for the initial choice escalated their commitment more strongly in the face of unfavourable results than those who had not made that choice. The next decision therefore depended not only on the available results, but also on personal involvement in the previous decision.
The weight of what has already been invested
Hal R. Arkes and Catherine Blumer (1985, Organizational Behavior and Human Decision Processes) documented the sunk cost effect: a past investment of money, effort or time can encourage people to continue a course of action. Their research highlights, among other factors, the desire not to appear wasteful. For a leader, acknowledging that a past expenditure cannot be recovered may therefore conflict with the desire to defend their management decisions.
The premature conclusion
One might conclude that a disappointing project should be stopped quickly. Yet this research provides no universal threshold for abandonment: continuing may still be justified by expected future benefits, exit costs or information yet to be obtained. The useful distinction is between a forward-looking justification and one based on what has already been spent. (our executive and employee training programmes)
What the evidence cannot settle
Experimental designs isolate mechanisms; they do not reproduce the full complexity of a bank's investment committee or a family business succession. These articles cannot establish how frequently the phenomenon occurs in Lugano's businesses, nor demonstrate that training alone would correct it. In practice, even a written justification can retrospectively rationalise an already settled preference.
A practical check in Lugano
One exercise proposed for « Leadership d'excellence » is to select an ongoing project — a banking tool, a fashion collection, a trading contract or an investment by a family SME — and write down in Italian, before its next review, the observable conditions for continuing or stopping it. At that review, someone who did not champion the initial choice compares those conditions with the available information, distinguishing sunk expenditure from future costs and benefits. The indicator is the proportion of continuation decisions reviewed that include a dated criterion established before the review, verifiable evidence and a forward-looking justification; it measures decision traceability, not profitability. To go further: explore the Executive Leadership training in Lugano in the canton of Ticino, or browse our executive and employee training programmes in Switzerland.
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