TL;DR
A committee can have the power to stop a failing program and still approve more funding. People who approved it may want to keep it going. For a big program, let someone with no prior approval decide after a missed target.
What the paper develops
A program is late and costing more than planned. The sponsor asks for one more quarter. The committee that approved the first funding rounds can stop the work, but it approves the request. A quarter later, the same choice returns.
A tougher gate will not solve that problem by itself. The committee already had the power to stop. The people deciding also helped make the commitment they now have to end.
Studies of escalation show that people who own a losing choice often keep putting resources into it. A review of that research found the pull stronger in four samples where the person deciding was monitored by someone else. Because the pull rose when the responsible person was monitored, a sponsor who recommends in front of a reviewer may lean toward continuing, which is why the sponsor only recommends and the reviewer decides. A funding review puts a sponsor before the committee that approved the same case.
The answer is not to remove the sponsor. The sponsor knows the work. Move only the continue-or-stop decision after a pre-set miss.
First, record the minimum result and its due date. It is the point below which the original case no longer holds. It is not the forecast.
Second, tell the sponsor that the review will judge the quality of the case and how early a miss is raised. Do not judge only the final result.
Third, name a reviewer who had no part in the approval. When the minimum is missed, the sponsor brings the evidence and recommends continue, narrow, pause, or stop. The reviewer decides. The EPMO tracks the date and calls the review.
The reviewer can still continue a program on a revised case. Use this step for large or hard-to-reverse commitments. The evidence comes from laboratory studies, a small shared-authority sample, and related field studies; no study has tested this full design.
At the next funding approval, write the minimum, its date, how the sponsor will be judged, and who decides after a miss. The next request for one more quarter then goes to someone who does not have to reverse an earlier approval.
What to do next
For a big program, record its minimum result, due date, how the sponsor will be judged, and a reviewer who did not approve it.
Inside the white paper
- Why a gate can keep funding a program it can stop
- How prior approval can pull people toward continuing
- Three steps: set a minimum, judge the case, and name a reviewer
Sources and notes
- Robert G. Cooper and Scott J. Edgett, Stage-Gate and the Critical Success Factors for New Product Development, BPTrends — the founders of Stage-Gate Inc. prescribe tough Go/Kill gates and observe that begun projects are rarely killed.
- Mark Keil, Joan Mann, and Arun Rai, Why Software Projects Escalate: An Empirical Analysis and Test of Four Theoretical Models, MIS Quarterly 24(4), 2000 — 30 to 40 percent of IS projects showed some escalation, with significantly worse perceived outcomes.
- Barry M. Staw, Knee-Deep in the Big Muddy: A Study of Escalating Commitment to a Chosen Course of Action, Organizational Behavior and Human Performance 16, 1976, 27–44 — participants personally responsible for a bad outcome committed the most additional resources.
- Dustin J. Sleesman, Donald E. Conlon, Gerry McNamara, and Jonathan E. Miles, Cleaning Up the Big Muddy: A Meta-Analytic Review of the Determinants of Escalation of Commitment, Academy of Management Journal 55(3), 2012, 541–562 — meta-analysis linking personal responsibility to escalation, with a stronger effect in four samples where the decider was monitored by another individual.
- Barry M. Staw, Sigal G. Barsade, and Kenneth W. Koput, Escalation at the Credit Window: A Longitudinal Study of Bank Executives' Recognition and Write-Off of Problem Loans, Journal of Applied Psychology 82(1), 1997, 130–142 — across 132 California banks over nine years, executive turnover predicted write-offs of problem loans; write-offs did not predict turnover.
- Mark Keil and Daniel Robey, Turning Around Troubled Software Projects: An Exploratory Study of the Deescalation of Commitment to Failing Courses of Action, Journal of Management Information Systems 15(4), 1999, 63–87 — de-escalation was most often triggered by actors such as senior managers, internal auditors, or external consultants.
- Itamar Simonson and Barry M. Staw, Deescalation Strategies: A Comparison of Techniques for Reducing Commitment to Losing Courses of Action, Journal of Applied Psychology 77(4), 1992, 419–426 — pre-set minimum targets, process-based evaluation, and less threatening outcomes reduced commitment to a losing course.