The Christmas Tree Effect

The Christmas Tree Effect: Why Your Software Requirements List is Killing Your Growth

We are hardwired to believe that more is the solution. When a process breaks, we add a step. When a team struggles, we add a tool.

In his book Inside the Box, David Epstein discusses the “Christmas Tree Effect” (or “featuritis”)—the human tendency to keep hanging ornaments on a project until the original structure is buried under unnecessary complexity. We humans, have a natural additive bias, and we consistently overlook solutions that involve taking things away.

I saw this play out with a nonprofit client previously. As a smaller organization, their leadership encouraged a “tech-first” mindset. But as the team grew, the volume of software became a “Christmas Tree.” New staff were overwhelmed, unsure which tool solved which problem. Instead of empowering the team, the complex infrastructure held them back. Ultimately, we stepped back and conducted a simple audit of software tools, identifying which platforms were truly essential to the team's daily work. Together, we eliminated redundant systems and streamlined workflows around the tools that actually solved real problems. As a result, onboarding for new staff became more straightforward, and the team reported being able to focus more time on mission-critical work rather than troubleshooting technology.

The Procurement Trap: Forecasting the “Maybe”

The Christmas Tree Effect is most dangerous during software procurement. Leaders often build requirements lists based on 5- or 10-year forecasts. They add “nice-to-haves” for a future that hasn’t arrived yet.

When you look too far ahead, you fall into the trap of Feature Bloat. You buy a Ferrari to drive to the grocery store because you might enter a race in 2029. This approach doesn’t just waste money; it creates a steep learning curve that kills staff adoption today.

Learning from the “Innovator’s Dilemma”

Clayton Christensen famously noted in The Innovator’s Dilemma that industry leaders often fail because they focus on adding high-end features that their average customers don’t actually need. This focus creates a vacuum for newcomers to disrupt the market with lower-cost, lower-quality tools that actually address immediate needs more effectively.

In your business, the disruptor should be you. Instead of chasing the most complex, feature-rich platform, consider the tool that will solve your challenges over the next 6 to 18 months.

How to Build a Lean Requirements List

To avoid the Christmas Tree Effect in your next digital transformation project, use these three filters:

1. The 18-Month Rule: If a feature isn’t critical to your operations within the next year and a half, it’s an ornament. Strip it off. Focus on immediate “moments of truth” for your customers.

2. The RICE Filter: Score your needs by Reach, Impact, Confidence, and Effort. High-impact, low-effort tools that benefit the most customers should always come first.

3. The “Sarah” Test: Picture an employee like “Sarah” in your office. Will this new feature actually remove her manual “copy-paste drudgery,” or is it just another dashboard she has to learn to navigate?

When you are in a procurement meeting, start by sharing these filters with your team and applying them directly as you review your requirements list. Ask everyone to apply the filters to each feature or tool before adding it to your must-have list. This opens up constructive debate and helps focus the discussion on what matters right now, not just hypothetical future needs.

The Bottom Line

Digital Maturity isn’t about owning the most tools; it’s about having the right tools for your current stage of growth. Don’t let the ghost of a future need ruin your current productivity. To ensure your requirements list truly supports your team, track simple metrics such as user adoption rates, time to onboard new staff, and reductions in manual work. Regularly checking these indicators can help leaders see real progress and adjust when needed.

Before you buy your next piece of software, ask: Are we solving a problem, or are we just decorating a tree?