When is it time to cut your losses?

At what point should an organization stop plowing resources into a:

(1)  Project?

(2)  Process?

(3)  Person?

There are numerous examples of projects that drain money, time, and effort from a company with no measurable benefit to the bottom line.  These programs essentially take on a life of their own as the sacred cow of some mid-level manager that is no longer able to confront the sunk costs of the once well-intentioned project and stop the bleeding before the patient dies.  And so this illogical decision-making process continues until it becomes the source of some HBS or McKinsey case study.

The sacred cow phenomenon is present in most industries, but is most egregious in the defense sector with taxpayer dollars fueling both outrageously expensive projects as well as an archaic acquisitions process.

There is no better example of this failure to cut projects and reform processes than the absence of the F-35 at last week's Farnborough International Air Show.

While the F-35 has become the poster child for inconceivable cost overruns and never-ending production delays, this latest incident completes the program manager's performance trifecta with confirmation of poor product quality (P&W engines in this particular case).

In light of this most recent embarrassment, one might expect the Pentagon to reassure the public that future projects would avoid such recurring process pitfalls.

Alas, the executive officer for the F-35 program went on the record to explain that he didn't see the absence of the fighter jet at the air show as a negative event.  He seemed completely unaware of the large amounts of poor publicity around the quality issues and even suggested that sales of the aircraft would not be impacted by this one missed appearance.

Seriously?

Photo:  I wonder, is this photo sufficiently representative of General Officer la-la land?

And therein lies the other problem with large, bloated bureaucratic institutions:  the people.

Somewhere within the promotion system people with no talent come to believe that they have undeniable leadership abilities.  They are fed a steady stream of disillusioned thinking from other subpar "leaders" and so perpetuate a vicious cycle that culminates in feeble-minded yes-men that at best get floated along and at worst get someone killed (c.f. Captain Sobel).

So while it's easy to point at the F-35 as a money pit, the real sacred cow is continuing to invest in the development of ineffective leader-managers.

And that's where I'll turn to next...