In most organizations, senior leaders are expected to make important decisions without having all the information they would like. They identify problems, propose solutions, commit resources, and rely on their teams to help make those solutions successful. When the decision works, the leader is often praised for recognizing what needed to change. Things get more complicated when the decision doesn't work. At that point, leaders aren't just evaluating the results. They're also thinking about everything they've already invested in the effort. Time, money, employee hours, political capital, and personal credibility can all become part of the equation. The longer a project has been running, the harder it can be to step back and ask a simple question: Is this still the right path forward?
Take Lauren, for example. Lauren is an executive overseeing a department that has struggled with slow project completion and inconsistent communication. To solve the problem, she introduces a new project management platform that is supposed to improve accountability and make projects easier to track. The organization purchases new software and dedicates months to implementation and training. Lauren publicly supports the initiative and assures the rest of the leadership team that it will improve performance.
Six months after the rollout, the results aren’t what Lauren expected. Projects are still being delayed, employees are frustrated with the new process, and managers have begun creating their own workarounds to avoid using the system. Rather than making communication easier, the initiative has just added more steps to everyone’s work. Still, Lauren wants to continue defending it. In her mind, the organization has already invested too much to turn back now, and changing direction could make her look like she made the wrong decision. Instead of asking whether the initiative itself is working, she asks the team to work harder at making it work.
The core problem in this situation isn’t that Lauren made an unreasonable decision. The old process wasn’t working, and leadership had a responsibility to do something about it. The problem is that Lauren has started treating the initiative as something that needs to be protected instead of what it really is: one possible solution to a larger problem. Once a leader attaches their reputation to a particular plan, evidence against that plan can start to feel like evidence against them personally. This makes it harder to look at the results honestly and much easier to justify putting even more resources into something that isn’t working.
How the Sunk Cost Fallacy Keeps Bad Initiatives Alive
Most organizations aren't held back by a lack of ideas. They're held back by an inability to let go of ideas that aren't producing results. This is where the sunk cost fallacy creeps in. The sunk cost fallacy happens when someone continues investing in a decision because of what has already been put into it, even when the current results suggest that continuing will cause more damage. For leaders, those sunk costs might include money, employee hours, training, software, and more. Because none of those resources can be recovered, leaders can feel like they have to prove that the investment was worth it.
By this stage, leaders often stop evaluating the quality of the decision itself. Their attention shifts toward justifying the investment that's already been made. But what has already been spent shouldn’t determine whether the next dollar, hour, or month should be spent in the exact same direction. Those resources are gone no matter what leadership decides to do next. The more important question is whether continuing the initiative is still the best decision based on what the organization knows today.
Changing Direction Can Feel Career-Threatening
The higher someone rises in an organization, the more visible their decisions become. An associate may be able to try a new approach and quietly adjust it when it doesn’t work, where an executive initiative, on the other hand, often requires budgets, presentations, and coordination between multiple teams. By the time it launches, the leader may feel like their credibility is tied directly to its success.
Because of this, changing direction can feel like much more than ending one unsuccessful initiative. It can feel like admitting the leader wasn’t qualified to make the decision in the first place. They may worry that their peers will question their judgment, or that employees will lose confidence in them. When a leader feels like their career is connected to making the initiative work, they may continue supporting it long after the results show that it isn’t working.
Unfortunately, waiting rarely protects the leader’s credibility. In fact, it does the opposite. Employees often recognize a failing initiative long before leadership does. When leadership continues defending it without acknowledging what is happening, employees begin to lose trust. The problem is no longer just that the initiative failed. The bigger problem becomes that leadership is unwilling to admit what everyone else can already see.
How Leaders Should Respond When an Initiative Isn’t Working
When a new strategy fails to meet expectations, leaders must separate the problem they were trying to solve from the solution they chose. An initiative can fail without meaning that the organization should return to the old way of doing things. Here are 4 steps leaders can take to change direction while still taking accountability.
- Return to the Original Problem: Before deciding what to do next, leadership should return to the reason the initiative was created in the first place. What specific problem was the organization experiencing? Why wasn’t the old process working? What was the new initiative actually supposed to improve? Returning to these questions helps people separate the goal from the failed project.
- Acknowledge the Results Clearly: Leaders should avoid hiding poor results behind vague language or continuing to say that an initiative only needs more time. If adoption is falling, productivity is declining, or the original problem is still there, those results need to be stated clearly. This might sound like, “The old process wasn’t working, and unfortunately, this new process isn’t working the way we expected either. Let’s use what we’ve learned from both and come up with a better solution.”
- Align People Around the Problem: When an initiative becomes controversial, employees may start dividing into groups that support either the old way or the new way. Leadership must bring everyone back to a shared understanding of the issue and the outcome the organization is trying to achieve. Once people agree on the problem, it becomes much easier to judge possible solutions honestly. The conversation shifts from “How do we save this initiative?” to “What is the best way to get the result we still need?”
- Set a Decision Point Before Investing More: Leaders should create clear checkpoints for deciding whether an initiative will continue, be adjusted, or be stopped. Without a defined decision point, leaders can keep giving an initiative “just a little more time” while the organization continues spending resources on it. No one wants to be the person who officially ends the plan, so the decision gets pushed further and further back.
Changing direction isn’t the same as giving up. Sometimes, it is the most responsible decision a leader can make. By acknowledging the results, separating the problem from the plan, and involving employees in the next solution, leaders can turn an unsuccessful initiative into something useful. The sooner they do this, the sooner the organization can stop spending time trying to save an idea and start putting that time toward actually solving the problem.