Stack of golden George Washington dollar coins,. (c) 2007 Bill Koslosky, MD (CC BY 2.5)

McKinsey on how companies spend money

E. Forrest Christian Decision-making, Reviews - Articles Leave a Comment

From “How Companies Spend Their Money” [PDF] (McKinsey Global Survey) A survey of executives from around the world highlights how frequently — and why — a company’s resource allocation decisions go wrong. Companies start off well, respondents say: senior executives are heavily involved in these decisions and routinely assess the prior performance of business units and the value creation protential …

Mountains near Château-d'Oex. (c) E. Forrest Christian

Project Portfolios Require High-Level Capability

E. Forrest Christian Organizations, Project Management, Risk Management Leave a Comment

In Waltzing With Bears, Lister and DeMarco describe the benefits of running IT projects within a portfolio. Not every one of them would have to succeed: you could take on several very high-risk (but high-payoff) projects and balance it with several low risk / low payoff projects. Having low-risk/high pay-off projects would be great, but most of the time those …

Run on East Side Bank, N.Y. 1912 February 16. Bain News Service via Library of Congress.

The Abilene Paradox of Escalation of Commitment: How We Can All Agree To Go Over the Cliff

E. Forrest Christian Project Management 6 Comments

When a project starts heading south, you would think that the rats would start abandoning the ship and the sponsor would quickly pull the plug to minimize losses. But that’s not what happens. Sponsors’ commitment to projects going bad actually seems to grow. The literature is littered with examples of sponsors continuing to spend money on a project that is …

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De-escalation of Commitment to Projects

E. Forrest Christian Organizations, Project Management, Reviews - Articles, Risk Management Leave a Comment

There is a large body of work dealing with the escalation of commitment in IT projects, how managers continue to throw good money after bad, increasing their commitment to a project that has little chance of succeeding. For example, Gustavo Dimello has an interesting summary (“To Pull or Not To Pull the Plug: When Managers Commit Themselves to Failure”) of …