There’s an old saying that the best way to get yourself out of a hole is to stop digging.
The problem is that too many times, you think there’s a treasure lurking just a few more shovelfuls down, so the digging continues. As the hole gets deeper, you keep at it because you’ve already put so much effort into it that it would be a waste to stop now.
There are many examples in business of these ever-deepening holes that eat up manpower, time and money. Sometimes, the elusive treasure is a product that’s sputtering along and just can’t quite get going like you had hoped.
Other times, it’s a person who has all the promise in the world, yet doesn’t have much to show for it other than a warm chair and a lot of frustration on your part. The “hole” might even be an entire division that is underperforming or a vendor that just isn’t meeting your needs.
Corporate America is littered with decisions that seemed like a good idea and just didn’t work out. Often, it’s a simple matter of timing.
WebTV was launched by Microsoft in 1995 as a way to provide internet access through your TV without a computer. Unfortunately, the market wasn’t ready for this innovation and the brand quickly faded into obscurity. It just wasn’t the right time for the type of content that, more than 20 years later, has become commonplace in homes and on phones and tablets around the world.
Executives can be stubborn and pride certainly does become a factor when an idea that you have invested so much time, money and energy into doesn’t work out. While it’s never easy to accept defeat, the alternative is to keep wasting resources on an idea that isn’t going to happen. Go too far down this road and the failure of that one idea will be the least of your worries.
You can’t be afraid to make the tough decisions.
Ending a project that’s bleeding money should be an easy call. Of course, it’s not always that simple. The venture may provide an occasional glimmer of hope that leads you to give it yet another try before calling it quits. To know when enough truly is enough, you need to set up accountability benchmarks to measure against the standards you’ve set.
If the data shows it isn’t measuring up, get rid of it. In today’s business world, profit margins are too thin to waste money on unproductive portions of your business. You can’t afford to have a nonproductive anything — be it a person, division or product — weighing you down.
These types of decisions are rarely easy. You never know how they will affect your business in the long term. It will always be easier to keep going after that elusive return on your investment. You have to hold yourself accountable.
If something is not working, stop digging now before the hole gets so deep that you are unable to climb back out of it. ●
Fred Koury is president and CEO at Smart Business Network.