Knowing when to stop a project: a leadership skill in Zurich
In Zurich's financial services, insurance, tech and European headquarters of international groups, continuing a project can put much more than a budget at stake. For the “Leadership d'excellence” programme at SHR — Swiss Human Resources, the management question is precise: how can leaders decide whether to continue without first seeking to justify their initial decision?
What the literature establishes
Barry M. Staw (1976, Organizational Behavior and Human Performance) experimentally studied successive resource allocation decisions. In his study, participants personally responsible for an initial decision with an unfavourable outcome subsequently allocated more resources to it than participants who were not responsible. This finding shows that responsibility for a choice can encourage escalation of commitment rather than a detached reassessment of its prospects.
The weight of what has already been spent
Hal R. Arkes and Catherine Blumer (1985, Organizational Behavior and Human Decision Processes) showed, across several decision situations, that prior investments could increase the tendency to continue an activity. Their research highlights, in particular, the role of the desire not to appear wasteful of resources already committed. The mechanism matters for leadership: defending the past can look like responsible management of the future.
The hasty conclusion
One might conclude that leaders should stop any project whose early results disappoint. That would confuse escalation of commitment with perseverance justified by new information, credible future benefits or substantial exit costs. The useful distinction is between irrecoverable expenditure and the future consequences of the options still available. (our executive and employee training programmes)
What the evidence cannot settle
These classic studies rely on experimental designs and bounded situations; they do not provide a universal stopping threshold for projects in Zurich. They do not reproduce the full complexity of regulatory obligations, technical interdependencies or trade-offs between headquarters and subsidiaries. Nevertheless, a project review that merely asks sponsors to defend their budgets may sustain precisely the confusion these studies reveal.
A practical check in Zurich
As an application exercise for the “Leadership d'excellence” programme, a Zurich team could examine its next budget renewal decisions, whether for a banking platform, an insurance system, a tech product or a European headquarters project. Before each decision, a brief would distinguish irrecoverable expenditure, future costs and benefits, exit costs and an explicit reassessment criterion, and would then be reviewed by someone not responsible for the initial choice. The measure would be the proportion of renewals supported by this complete brief, dated before approval and verifiable in the committee's records. This indicator would document decision discipline, not achieved profitability or the elimination of bias. To go further: explore the Executive Leadership training in Zurich in the canton of Zurich, or browse our executive and employee training programmes in Switzerland.
In pictures: Executive Leadership in Zurich
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