Cutting your losses: Extricating your organization when a big project goes awry

Overcommitment to a course of action is likely to make executives miss certain warning signs or misinterpret them when they do appear. In many cases, executives become so strongly wedded to a particular project, technology or process that they find themselves continuing what they should pull out. Instead of terminating or redirecting the failing endeavor, managers frequently continue pouring in more resources. While escalation of commitment is a general phenomenon, it is particularly common in technologically-sophisticated projects with a strong information technology (IT) component. The special nature of these projects - including the high complexity, risk and uncertainty they involve - makes them particularly susceptible to escalation.