By Benny | UNI.CORN, Team 4

How to Avoid the Psychological Trap of Escalating Commitment

July 13, 2016

*The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of DBS.

Imagine, you’ve pumped thousands of dollars into a project and it doesn’t look anywhere close to achieving success. What would you do? Invest more or cut losses?

From a third party’s perspective, cutting loss may be the best option. However, due to sunk cost and other vested interests in the project, pulling the plug may not be the obvious answer. Instead, one might fall into the trap of increasing their investment to make it successful, even though it is obvious that it will make little difference.

Innovation is akin to food preparation. It takes many ingredients and hours to prepare a delicacy. For our assignment, we have invested many hours of conscious effort into brainstorming, eliminating and refining ideas that revolve around our assignment. At times, it is painful to part with the ideas we love. In my team, we have faced many challenges and observed difficulties while trying to find the optimal solution to our assignment. The experiences I have had with my team have led me to insights backed by psychological studies that might help fellow UNI.CORNs to be more self-aware when making decisions. In this article, I will be sharing some tips on how and when to seek help objectively.

Why an outsider’s perspective in promoting objectivity

In a social psychology research conducted by Professor Brian Gunia from the John Hopkins Carey Business School, taking the perspective of the decision maker or reflecting on the decision maker’s viewpoint can influence our rationality. By taking perspective, we will have a higher tendency to bind ourselves to the restrictions and limitations of the decision maker. In this view, we are likely to continue with the plan of the decision maker even if it is a failed plan. The research proposed that having outsiders come into picture may help the group to get out of the entrapment, such as failed business attempts, by providing unbiased views on the subject matter.

 It is important for us to be aware that perspective taking may lead us to driving a failed plan further. In order to avoid this situation, always approach someone with a neutral point-of-view and without any attachment for help.

My personal experience resonated with the research paper as we are all decision makers and take perspectives from one another. In our UNI.CORN journey, we often conceptualise and kill ideas before we test it on the ground. At times, we have invested so much time and resources into the idea and are convinced that they are the great ideas. For example, we had an idea about a “Family Tree” that we thought would solve both the consumer’s and bank’s problem. We worked on it for a few days and were enthusiastic about it.

When we met with Darren, one of our DBS Innovation Mentors, our view on the idea changed. Initially, we thought believed that our idea could be world changing after putting in some effort and building it up. However, Darren, as a third party, offered fresh perspectives and got us out of our myopic view of focusing purely on the “Family Tree”. He did so by hearing our ideas without anchoring himself to our sunk cost and probed us to question all our flawed assumptions. Eventually, we pivoted from it and changed our plan due to viability issues.

It is hard to kill our own ideas as we have invested so much energy and time into it. However, it will be easier and wiser to have someone to kill it for us. Therefore, never be afraid to think big, prepare a game plan, test the game plan and approach someone out of your group for advice on a regular basis. Keep an open mind and always be prepared to start all over again.

#DECISIONMAKER    #PERSPECTIVES

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