August 26, 2011
FastCompany.com has, once again, made me rethink my executive skills, this time with their great recent piece, Three Self-Delusions That Influence Your Decisions And Productivity. The article, written by Kevin Purdy, points to our brains’ hardwiring as the leading reason why our “rationale decisions” are highly suspect (which is music to the ears of all those emerging neuromarketing firms).
The article is based on the writings of David McRaney and his forthcoming book, You Are Not So Smart. Mr. McRaney has an “index of common mental shortcomings,” one of which I think is causing a great deal of trouble for the necessary evolution of health and human services – the “sunk cost fallacy.” This is the basic premise that the “the more [we have] invested in something, the harder it becomes to abandon it.” Essentially, when given the choice to replace something old with something new, we’ll probably stick with the older idea we have already “invested” in – our rational decisions are polluted by the emotional attachment to what we have built.
Why does this matter in our market space? The first reason is obvious. Change is all around us and survival of our organizations demands change, lest we suffer the oft-mentioned fate of dinosaurs.
But it’s the second reason that’s the killer. Most executives in the health and human services space got into this field for both professional and personal reasons; so it’s not just what they’ve built as an organization that needs to be viewed through the “sunk cost” lens, it is their entire personal and professional identity. And rather than viewing the outcomes of their organization as the measure of success, their professional identify is tied to the clinical protocol they developed, the program they created, the building they raised money to build, the software system they selected and perfected…
So what is the solution for all of us faced with this “sunk cost” dilemma? Some of the best advice I have found comes from the LiteMind blog in the piece, Sunk Cost Bias: How It Hinders Your Life and 4 Ways to Overcome It:
Quit worrying about looking foolish – give yourself permission to make (and admit) mistakes and move on.
Practice “zero-based thinking” – forget about the past and consider this very moment as your “point-zero” in time.
Always be mindful of long-term objectives – don’t confuse any greater goal you want to achieve with the specific means of implementation you’re attached to.
So, the next time one of your colleagues proposes something new and your immediate reaction is “NO,” pause for a moment and consider these three tips. And don’t let your emotional investments in the past stand in the way of making a rational decision.
Monica E. Oss
Chief Executive Officer, OPEN MINDS
To read more from OPEN MINDS, see: The Endless Quest for Management Gold all members
This is free for the next sixty days to all registered OPEN MINDS Circle members.