The Concorde

 

Have you ever embarked on a project that showed so much promise but never really took off in the long run? Are you familiar with the concept of sunk cost bias? The French and British governments went through just such an experience on a monumental scale. The Concorde was meant to be an aeronautical marvel. It had all the signs of a great undertaking. Who wouldn’t want to do a cross-Atlantic trip in half the time a traditional airplane would take? Surely the rich would find this very convenient. While the rest of us worry about the cost, they would be thinking about how much time they would save by choosing the Concorde. For some reason however, the project never picked up as expected. They were never able to breakeven let alone make any profit from this experiment.  For forty years, they continued to pour money and other resources into it hoping it will turn around but it didn’t. They eventually came to the painful conclusion to shut down the operation.

There are so many questions one can ask in this regard. Why did it take them forty years to shut down a leaking concern? What is it they never got right about the whole project? Millions of dollars were lost trying to make the thing work to no avail. It was a very costly experiment. There are many reasons that can be advanced as to why they continued so long in this losing position. We could talk about government bureaucracy, the fact that it was an experiment but the overarching problem was the idea of sunk cost bias.

What is Sunk cost bias? To put it simply, we find it very hard to walk away from anything we have invested a lot of resources in.  Some projects consume us so much with the promise of great returns that we are willing to put in everything. What happens is that because you have already sunk a lot into it, you convince yourself that pumping in a little more will get it going. At the end of the day you keep sinking more into this project and it keeps disappointing you but you can’t find it within you to walk away. Saving the project becomes an exercise in futility but you just can’t let go.

The people outside can see clearly that this is not working but as the person who is in the thick of things and consumed by the quest to make it work, you might not see it with such clarity. A vanity project can end up consuming more than its fair share of resources and in the process deny other projects the funding they need. The longer it takes you to identify your vanity projects the more your critical projects will suffer. If you must indulge in a vanity project, make sure the basics are taken care of first. I guess the French and British governments realized that it is no longer justifiable to keep sinking more into the Concorde and called it in.

My question to you is what is your Concorde? What is your vanity project? What is that pet project to which you have devoted a lot of your energy? Are you/ have you become a victim of sunk cost bias? One of the things about pet projects is that the owner is more often than not blind to the fact that this is happening. You would do well to seek the input of others who can give you an objective view of things. This is where paying attention to your critics can be of help. I guess one of the best ways to protect yourself from this kind of bias is to make sure you are not surrounded by Yes men/women. You need to have around you people who can put you to task in justifying what you are trying to do. You need people who can ask you difficult questions. With that you will be on your way to fighting Sunk-cost bias.

Telltale Signs of a Concorde Kind of Project.

Unjustifiable investment of resources

Long past expected due date of return

A requirement to inject just one more round of funding yet this has been the case multiple times.

An aversion to genuine critique-You do not a=want anyone to question you.

Activity shrouded in mystery-it is not very clear what is going on.

Eating into other project(s) allocation(s)

Uneasiness with higher-ups when it comes to discussing this particular project.

Subordinates who are stressed out wondering what the whole deal is.

Victims of Concorde projects

Individuals with a big ego

Companies

Governments like our example

Churches

Non-Governmental Organizations.

Guard against Concorde projects

One Concorde kind of project is one too many. It could spell the end of dominance for an industry leading company. It could mean a redirection of resources from essential services to fund vanity projects. It could sink your entire nest egg as an individual leaving you with nothing to show for all your years of hard work. It could also lead to misplaced priorities for those in service to humanity like churches and NGO’s.

With all this at stake, what can be done to ensure you don’t become a victim of vanity projects?

To begin with you must become open to criticism from all quarters. While you don’t have to take it to heart, examine every criticism with an eye to pick the truth from the trivialities. Not all who criticize you want your downfall.  Some genuinely want you to do better or articulate your idea better.

Listen to both Higher-ups, contemporaries and reports. The people who know about the particular project are best placed to tell you whether you are onto a winner or not. You do well to pay attention to them and what they have to say. While the first remedy could be criticism from outside sources, this groups offer internal criticism. Before you dismiss your higher-ups as removed from reality, contemporaries as speaking out of jealousy and reports as speaking to matters above their pay-grade, pay attention to the merit of what they bring to you. When you realize that there are questions arising from all the groups, know that this project is a potential Concorde.

Seek justification for all expenditure. Choose to use what accountants call Zero based budgeting as proposed by Greg McKeown in his book on essentialism. This whole article is inspired by what he shares on the story of the Concorde. This type of budgeting forces you to justify every resource allocated to a project. This way your eyes will be opened to the projects which have been consuming your resources without cause and you can then cut them off.

Be ready to acknowledge you are wrong. Ego can be one of our greatest enemies. Nobody wants to be told that what they conceived is a waste of time and resources. This is why we hold on to it tightly even when it is not making any sort of sense. The only way to make amends is to be quick to see your fault and adjust accordingly. Those who are ready to admit their faults will cut their losses early on before it becomes too hard to walk away.

Look for a neutral second opinion. It is good you find people who can offer you honest opinions removed from any emotional attachment. When you are in doubt about your project, don’t hesitate to talk to someone who is as far removed from what you are doing as possible. That person will help you see things for what they really are.

 Don’t be afraid of waste. Many of us keep on walking in the wrong direction since we believe going back is a sign that we have wasted that time. We must get rid of the fear of being looked at as those who took a wrong turn. Everyone takes wrong turns in life. The problem is if you don’t accept early on, it will cost you more when you eventually have to turn around. Think about getting lost in the forest. Do you keep on walking when you are no longer sure which way you are going or do you turn back to retrace your steps? Those who keep walking are likely to end up lost while those who retrace their steps have a chance of finding the right path. No matter how much you have invested in it, when you realize it is not working, be quick to let it go.

A critical question.

How do we differentiate between a Concorde and Thomas Edison’s incandescent light bulb?

Many people keep flogging dead horses because they are not sure whether they are dead or alive. So how do you tell which one is alive and which one is dead? While Thomas Edison failed many times, there is something about his failure that kept him going. The concept of failing forward becomes important here. A Concorde has no meaningful sign of progress. Edison’s light bulb got better with each iteration. One of the best ways to differentiate the two is tangible progress. A vanity project shows very little to no progress while a potential project sees consistent improvement.

A budget injection moves the needle on a good project. The same injection makes very little change to a vanity project. If an escalation in resource allocation does nothing to the final output, then it is time to bid good bye to your project. If on the other hand you can see where the resources are going, keep at it even though it takes a bit of time.

What else do you think we can use to make the distinction? Let me know in the comments below.

A word of caution

This advice does not apply in all situations. Different projects have different timelines and measures of progress. Before you apply this advice be sure you are clear on the dynamics of your particular project. A good way to do this is to look at others who have embarked on similar projects. Benchmarking can help you tell whether you are on the right track or lost. I also know there are projects which are so novel that there is no existing benchmark. I would leave such projects at the discretion of the implementation team but my advice would be that you ensure you are surrounded by sober, objective people who can tell you when you are going widely off track.

As we end this, are you aware of the Concordes in your life? What are you going to do about them? Do you need help identifying and dealing with the Concordes in your life, business, ministry, family or whatever concern? Get in touch with us at Optimize Institute. Contact +254725832477 Or email me on asenasam@gmail.com 

Whatever you do, don't waste your energies on a Concorde.