Two ideas intersected during my readings today, leading to this article.

I was reading a book pertaining to psychology and enjoying my cup of morning tea, when my wife asked Why the heck am I wasting my time reading a book on Psychology. I told her that half of the challenges that organizations run into, digital or not, are rooted in psychology. She shrugged it off.

Later this evening, I was reading an article on the need to fail fast in today’s world. The gist was that, unlike a decade or two ago, the implications of getting stuck with digital tools that are not aligned with the imperatives are huge. The article focused mostly on why accepting failure fast is critical, but my mind was also exploring why we are sometimes afraid to fail fast.

And in my opinion, at the core of it is human psychology. So I called for my wife and told her that the scenario in the article was an excellent example of how psychology dominates the corporate world, and her obvious response was a question. How?

When she brought up this question, I thought I would leverage an experience from my childhood to explain to her the dilemma that companies face, using an example where companies sometimes get stuck with enterprise systems that do not fit their needs.

Well, back in 1990, when I was 10 years old, my parents shipped me to a boys’ boarding school. The rationale was that there were no good English-medium schools in our tier 2 town. Though I was very young, my teachers at school insisted that I was a promising student. So maybe my parents thought that I would do something magical in a very elite boarding school.

It did not work that way.

For someone shy, introverted, had almost no friends outside school, and rarely stepped out of the home, it was a massive change. For the first few months in the boarding school, I cried myself to sleep.

While I did not realize it back then, my ten-year-old year old brain developed its own coping mechanisms. Within a couple of years, I was one of the naughtiest kids, expending my energy on everything but studies 😀.

So, from an academically star kid at the school in my town, I transformed into a kid who would purposely get into trouble, a usual suspect for petty crimes like hanging a dead bird carcass at the hostel notice board 😂 , and would study only a few hours before an exam.

Every year, my grades were worse than the previous year. Every year when I came back home for summer vacation, I told my parents that I did not want to go back. Yet, they sent me back year after year, after year. Until the school said enough in 1995, when I, along with a few other students, was caught outside the hostel at 2am 🤪.

But why is all this relevant to why organizations get stuck with enterprise software, despite getting the feeling that it may not be the right fit? At the core, the psychology is similar to what my parents probably went through, because of which they kept sending me back year after year.

Despite academics being the primary reason that my parents stated to send me to a boarding school, they did not keep me home despite my unsatisfactory academic performance, unless there was no other alternative. Why? In my opinion, there are two stages to this type of psychology.

The first stage is where you wish that things would improve with time. The optimist in me 😁 has always wanted to believe that maybe my parents thought that the grades would improve once I “adjust”. Because the only other reason would be that they did not like seeing me every day 😂.

It is similar in enterprises. Within a corporate context, we tend to find some justification for the early Red flags. Maybe the initial implementation is messy and challenging, but we will reap the ROI at some point. But the fact is that all we are doing is comforting ourselves psychologically that we are not bad decision makers. That there has been no error of judgment in making the decision.

The second stage is where you know things won’t improve, but your ego kicks in. You do not want to be labeled as someone who kept pushing a bad decision, one that had a significant impact.

The second stage in the enterprise context is where deep down you know that the tool is not at all what you thought it was, and will not deliver the extraordinary transformation you think it would. But it is too late to turn around, or say the fact out loud, due to a plethora of reasons. Accepting failure at this point often is not an option for many executives.

Accepting that the initiative is a failure would make us a failure as well, in areas like identifying key decision opportunities. This is where cosmetics and Band-Aids come into play. We do everything possible to “make it work”. The real cost of trying to make it work is never captured, but my estimate is that organizations around the world are losing billions in resources due to this second stage.

This is why building an environment where failing fast is accepted has an impact that goes beyond sunk cost.