Elton John is right, sorry is the hardest word. It is hard to admit that one has been wrong. Harder still is to find a way forward, a way to correct one’s past mistakes. It often involves backtracking.

But when it comes to hard-headed business decisions, backtracking may often be the only thing to do. It makes sense to cut further losses when there is little point in throwing good money after bad. Such containment efforts are routine events in most establishments.

The biggest loss containment effort that I had a personal stake in happened in the US in the early nineties. I began noticing its worrying escalation in a hotel room in Washington DC. I was student delegate in the annual conference of the American Physical Society (APS). Despite the happy APS atmosphere (where many graduate students find their future placements) and the beautiful pre-cherry-blossom weather, I was a worried man because I had just seen a TV commercial that said, “Ten billion dollars for a particle accelerator??!! What the heck is it any way?”

The ten billion dollar project under attack was the so-called Superconducting Super Collider (SSC) in Texas, which was eventually shut down in 1993. The cancellation came in spite of a massive initial investment of about two billion dollars.

To me, this cancellation meant that more than two thousand bright and experienced physicists would be looking for jobs right around the time I entered the job market. This concern represented my personal stake in the project; but the human impact of this mammoth backtracking was much deeper. It precipitated a minor recession in the parts of Dallas to the south of the Trinity River.

Similar backtracking, though at a much smaller scale, may happen in your organization as well. Let’s say you decided to invest two million dollars in a software system to solve a particular business problem. Half a million dollars into the project, you realize that it was a wrong solution. What do you do?

It may look obvious that you should save the company a million and a half by stopping the project. This decision is exactly what the collective wisdom of the US Congress arrived at in 1993 regarding the SSC. But it is not that simple. Nothing in real life is that simple.

Corporate backtracking is a complex process. It has multiple, often interconnected, aspects that have to be managed with skill.

If you decide to backtrack, what does it say about your business acumen? Will it trigger a backlash from the top management accusing you of poor judgment? In other words, will your name be so much in the mud that you would find it impossible to secure a job and support your family?

Let’s say it really wasn’t your fault and you had valid arguments to convince everybody of your innocence. Would that make it simple enough to pull the plug on the project? In all probability, it would not, because all big projects involve other people, for no man is an island. Stopping a project half-way through would probably mean sacking the whole project team.

This human cost is something we have to be aware of. It is not always about dollars and cents. If you are kind soul, you would have to move the team to some other (potentially unproductive) project, thereby eroding the savings that would’ve accrued from stopping the project. Wouldn’t it have been better to have continued with the original project, doomed though it was?

In most corporate cases, it will turn out to be wise to shutdown doomed projects. But don’t underestimate the costs involved. They are not always counted in monitory terms, but have human dimensions as well.

It is far wiser never to embark on dubious projects. When you must get involved in uncertain projects, review your exit options carefully. For instance, would it be possible to reshape the project in a different but still salvageable direction?

And if and when you do have to shut them down, do it with decisiveness. Do it with skill. But most importantly, do it with decency and compassion.

Employees seek insights into their organization’s heading. And they should, because what their organization does has a direct impact on their well-being. If your organization is planning to retrench 50% of its staff, for instance, you’d better start looking for new job right away.

Who do you turn to when you pine for information? Your management would have you listen to them. From the employee’s perspective, this may not be the smartest move. But fret not, there is an alternative.

There is a city underground. Parallel to the world of corporate memos and communication meetings, this rumour city trades information, often generating it as needed.

Employees flock to the rumour mills, not out of their inherent malevolence for their employers, but because of a well-founded and mutual mistrust. Management tends to be cautious (and therefore less than candid) with their announcements, while over 80% of office rumours turn out to be accurate, as some studies show.

Let’s take a hypothetical situation. Suppose five years ago, your CEO took to the podium and declared that there would be absolutely no retrenchments. How many of you would have believed it? Those who believed would almost certainly wish they had listened to the grapevine instead.

This credibility gap that a typical management team suffers from can be addressed only though open and candid communication. Therein lies the rub. The management cannot always be as candid as they would like to be. And, they certainly cannot afford to be as candid as the employees would like them to be.

Lack of candour in an atmosphere of uncertainty breeds rumour. Rumours, as defined in psychology, are hypotheses with widespread impact. They abound when the management refuses to trust the employees with strategic information. This lack of trust and information leaves them with no choice but to interpret the developments themselves. In such interpretations lie the origins of office rumours.

Rumours are not to be confused with gossip. While rumours are based on conjecture and are presented as future, corporate-wide eventualities, gossip can be idle or with malicious intent directed at individuals. And gossip is usually presented as fact. In highly competitive settings, gossip can inflict irreparable damage on unsuspecting victims.

Once a rumour attains a high level of credibility, the top brass will be forced to talk. But the talk has to be candid and serious. And it has to be timely. If they wait for too long, their attempts at a tête-à -tête would resemble feeble attempts at damage control. And if the talk is a mere torrent of clichés and rhetoric, it will be taken as an effort to gloss over potentially catastrophic changes. In fact, such weak communication fuels more rumour than it quells.

Given that critical job-related information usually flows down the grapevine, the employees are going to talk. The only sure-fire strategy for any management is to make use of the underground rumour mill — the classic “if you can’t beat’em, join’em” paradigm.

If you are a part of the top brass, here is what you can do. Circulate as much accurate and timely information as you possibly can. If you cannot do it officially through formal channels, try informal ones, such as lunches and pantries. This way, you can turn the rumour mills to serve your purpose rather than let them run amok.

Do not underestimate the power of the grapevine, lest all your corporate communication efforts should come to naught.

We know a lot. By “we,” I mean humanity as a whole. We know so much that it is impossible for any one of us to know more than a fraction of our total knowledge. This is why we specialize.

Specialization is good. It lets us cut deep into a specific field of endeavor; but at the expense of a broad overview of everything, naturally. Specialization is expected of professionals. You wouldn’t be happy if you found out that your dentist is, in fact, a well-known philosopher as well. Or that your child’s ENT surgeon secretly teaches astrophysics in the local university.

Isn’t there a danger lurking behind our habit of demanding super specialized silos of knowledge? One obvious danger is the loss of synergy and potential innovation. A case in point — a particle physicist at the European Organization for Nuclear Research (CERN) faces the problem of accessing various files on different computers and networks. Being conversant in computing issues, the physicist devices a nice way of describing the file (or, as it is known now, the resource) and suddenly the first URL (Universal Resource Locator) is born. The rest is history — we have the World Wide Web, the Internet. Fifteen years later, you have e-commerce and YouTube!

If CERN had insisted that their physicists do only physics and leave their computing problems to the IT department, the Internet may not have materialized at all. Or, it may have taken a lot longer to materialize.

The need for specialization is not limited to individuals. It permeates into the modern workplace in the form of a typical division of labor such as HR, Finance, IT and Business. This division has worked well for ages. But every once in a while, the expertise in such silos becomes so split and scattered that the organization loses sight of its basic objective. People in the silos begin work against each other, competing for resources and recognition, rather than collaborating for common success.

The most common pariah in a typical organization is the IT department. These poor folks always get shouted at if anything at all goes wrong in the system. But when everything is working fine, nobody even notices them. In today’s age of ubiquitous computer literacy, why not assume a bit of system responsibility so that the turnaround time in PC troubleshooting (and consequently productivity) can be improved?

In fact, we know why. When it comes to computers, there is no limit to how bad things can get. As the IT proverb says, to err is human, but to completely foul up things requires a computer. End users may screw up the system so completely that even a competent IT department (a rare commodity) may find it impossible to restore normalcy. But, in order to fight this self-destructive (though well-intentioned) tendency, IT departments have gone to the other extreme of making it so bureaucratic and practically impossible to get their help in anything at all!

Another group that gets a bad rap in a highly regulated organization is the auditors. Their thankless job is to look over everybody’s shoulder and make sure that they are following the rules of the game (or rather, complying with policies and regulations). Auditors’ noble intentions get eclipsed by one fatal flaw: they seem to measure their success by how many violations they can find. Instead of working hand in hand with those being audited, the auditors come across as though they are conspiring against the rest.

There is productivity to be gained by blurring the edges of rigid silos in organizations. When silos talk to each other, teamwork happens and those in the silos realize that they all work toward a common goal.

We go through this ordeal every year when our bosses appraise our performance. Our career progression, bonus and salary depend on it. So we spend sleepless nights agonizing over it.

In addition to the appraisal, we also get our “key performance indicators” or KPIs for next year. These are the commandments we have to live by for the rest of the year. The whole experience of it is so unpleasant that we say to ourselves that life as an employee sucks.

The bosses fare hardly better though. They have to worry about their own appraisals by bigger bosses. On top of that, they have to craft the KPI commandments for us as well — a job pretty darned difficult to delegate. In all likelihood, they say to themselves that their life as a boss sucks!

Given that nobody is thrilled about the performance appraisal exercise, why do we do it? Who needs it?

The objective behind performance appraisal is noble. It strives to reward good performance and punish poor shows — the old carrot and stick management paradigm. This objective is easily met in a small organization without the need for a formal appraisal process. Small business owners know who to keep and who to sack. But in a big corporate body with thousands of employees, how do you design a fair and consistent compensation scheme?

The solution, of course, is to pay a tidy sum to consultants who design appraisal forms and define a uniform process — too uniform, perhaps. Such verbose forms and inflexible processes come with inherent problems. One problem is that the focus shifts from the original objective (carrot and stick) to fairness and consistency (one-size-fits-all). Mind you, most bosses know who to reward and who to admonish. But the HR department wants the bosses to follow a uniform process, thereby increasing everybody’s workload.

Another, more insidious problem with this consultancy driven approach is that it is necessarily geared towards mediocrity. When you design an appraisal process to cater to everybody, the best you can hope to achieve is to improve the average performance level by a bit. Following such a process, the CERN scientist who invented the World Wide Web would have fared badly, for he did not concentrate on his KPIs and wasted all his time thinking about file transfers!

CERN is a place that consistently produces Nobel laureates. (I once found myself with two Nobel laureates in a CERN elevator!) How does it do it? Certainly not by following processes that are designed to make incremental improvements at the average level. The trick is to be a center for excellence which attracts geniuses.

Of course, it is not fair to compare an average organization with CERN. But we have to realize that the verbose forms, which focus on averages and promote mediocrity, are a poor tool for innovation management.

A viable alternative to standardized and regimented appraisal processes is to align employee objectives with those of the organization and leave performance and reward management to bosses. With some luck, this approach may retain fringe geniuses and promote innovation. At the very least, it will alleviate some employee anxiety and sleepless nights.

Hold on to your pants, your key staff has just tendered his resignation — your worst nightmare as a manager! Once the dust settles and the panic subsides, you begin to ask yourself, what next?

Staff retention is a major problem in the current job market in Singapore. Our economy is doing well; our job market is red hot. As a result, new job offers are becoming increasingly more irresistible. At some stage, someone you work closely with — be it your staff, your boss or a fellow team member — is going to hand in that dreaded letter to HR. Handling resignations with tact and grace is no longer merely a desirable quality, but an essential corporate skill today.

We do have some general strategies to deal with resignations. The first step is to assess the motivation behind the career choice. Is it money? If so, a counter offer is usually successful. Counter offers (both making them and taking them) are considered ineffective and in poor taste. At least, executive search firms insist that they are. But then, they would say that, wouldn’t they?

If the motivation behind the resignation is the nature of the current or future job and its challenges, a lateral movement or reassignment (possibly combined with a counter offer) can be effective. If everything fails, then it is time to say goodbye — amicably.

It is vitally important to maintain this amicability — a fact often lost on bosses and HR departments. Understandably so because, by the time the counter offer negotiations fail, there is enough rancor on both sides to sour the relationship. Brush those wounded feelings aside and smile through your pain, for your paths may cross again. You may rehire the same person. Or, you may end up working with him/her on the other side. Salvage whatever little you can for the sake of positive networking.

The level of amicability depends on corporate culture. Some organizations are so cordial with deserting employees that they almost encourage desertion. Others treat the traitors as the army used to — with the help of a firing squad.

Both these extremes come with their associated perils. If you are too cordial, your employees may treat your organization as a stepping stone, concentrating on acquiring only transferable skills. On the other extreme, if you develop a reputation for severe exit barriers in an attempt to discourage potential traitors, you may also find it hard to recruit top talent.

The right approach lies somewhere in between, like most good things in life. It is a cultural choice that an organization has to make. But regardless of where the balance is found, resignation is here to stay, and people will change jobs. Change, as the much overused cliche puts it, is the only constant.