Some Hidden Costs of Business Fads

Most business fads do have at least some inherent value — that's why so many organizations adopt them. But as we saw last time, their inherent value can degrade as the fad itself gathers adopters. In this part of our exploration, we turn our attention to the hidden costs associated with adopting ideas or methods that have acquired — or that eventually do acquire — fad status.

Costs can be internal

When estimating the costs of adopting an idea or method, we tend to focus on cash outlays, but many costs of adoption can be internal. Costs can appear as lost production, lost sales, compromised quality, confusion, political strife, degraded morale, employee cynicism, and much more, most of it difficult to measure. Examples of the sources of these losses include time spent training and learning, employees recognizing the fad potential of the new method, and disruption of interpersonal relationships.

Since adopting a new idea or method can be expensive in both measurable and nonmeasurable costs, be very certain that it isn't a fad. Fads usually just aren't worth adopting.

Costs can lag adoption

Many of the costs of adopting fads, espSome fads are stickyecially the nonmeasurable costs, appear not in advance of or during the adoption effort, but much later. For instance, companies that downsized aggressively in the 1990s lost access to many of their experienced employees and much of their organizational memory, from both the downsizing and the voluntary turnover it inevitably stimulates.

Adopting a fad can leave a lasting legacy of recurring cost that can hobble the organization for years.

Investments in fads can be volatile

The investments we make when adopting fads are different in character from investments we make when buying equipment, or creating new products, or outfitting new space. Some investments in fads are volatile because we have little ability to protect them.

Fads that involve personal training are more likely than most to carry with them volatile costs. For instance, when we purchase a computer, we have the ability to keep it in our possession. But when we train an employee to use the Myers-Briggs model, and spend real money to determine that employee's Myers-Briggs type, that investment evaporates when the employee leaves the company.

Some fads are sticky

One of the defining features of fads is that they eventually pass on. After adopting a fad, we adopt something else, undoing the work we did when we adopted it. But some fads, once adopted, are very difficult to leave behind. They stick.

Methods and ideas that require changes to policies and procedures are often stickiest, because changing policies and procedures is difficult by design. Especially sticky are fads involving human resources procedures. When adopting them we rarely consider the costs of letting go.

Next time we'll explore why business fads form.   Next issue in this series    First issue in this series   Top    Next Issue

Is your organization embroiled in Change? Are you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt? Read 101 Tips for Managing Change to learn how to survive, how to plan and how to execute change efforts to inspire real, passionate support. Order Now!

Your comments are welcome

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

This article in its entirety was written by a human being. No machine intelligence was involved in any way.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Personal, Team, and Organizational Effectiveness:

Changing the Subject: II

Sometimes, in conversation, we must change the subject, but we also do it to dominate, manipulate, or assert power. Subject changing — and controlling its use — can be important political skills.

Finding Work in Tough Times: Communications

Finding work in tough times entails presenting yourself to many people. You'll be conversing, interviewing, writing, presenting, and when you're finally successful, negotiating.

Business Fads and Their Value

Fads in business come and go, like fads anywhere. In business, though, their effects can be so expensive that they threaten the enterprise. Still, the ideas and methods that become fads can have intrinsic value. Where does that value come from? Where does it go?

Decisions: How Looping Back Helps

Group decision making often proceeds through a series of steps including forming a list of options, researching them, ranking them, reducing them, and finally selecting one. Often, this linear approach yields disappointing results. Why?

Listening to Ramblers

Ramblers are people who can't get to the point. They ramble, they get lost in detail, and listeners can't follow their logic, if there is any. How can you deal with ramblers while maintaining civility and decorum?

See also Personal, Team, and Organizational Effectiveness and Personal, Team, and Organizational Effectiveness for more related articles.

Forthcoming issues of Point Lookout

Coming March 19: On Lying by Omission

Of the many devious strategies of workplace politics, deception is among the most commonly used. And perhaps the most commonly used tactic of deception is lying. Since getting caught in a lie can be costly, people try to lie without lying. Available here and by RSS on March 19.

And on March 26: Seven Ways to Support Word-of-Mouth About Your Content

Whether you're making a presentation or writing an article or a book, making your material more memorable is a desirable objective. After the talk, or after the reader sets down your work, what you have to offer will be accessible only if the auditor or reader remembers something about it. Available here and by RSS on March 26.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrentSgXnAlNVWlhxNIJner@ChacAtZoEYrrmofzZnjPoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

• Get 2001-2 in Geese Don't Land on Twigs (PDF, )
• Get 2003-4 in Why Dogs Wag (PDF, )
• Get 2005-6 in Loopy Things We Do (PDF, )
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
• Get 2009-10 in The Questions Not Asked (PDF, )
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info