What do I really have here?
Why is it so hard to let go? One leader had to let go of an employee that they’d really hoped would work out. Another leader had to make a decision to pull the plug on a project in which significant resources had been invested.
In both cases, they admitted they’d waited too long.
The office where the employee should have been let go many months ago was already contaminated with pessimism and negativity. There was a drop in revenue and lost opportunity because of mis-aligned priorities. Two employees had been put in place as a “work-around” - instead of dealing with the real problem, circumvent it by adding extra people that will be easier to deal with. Both employees, valuable in their potential, left.
Why do we hang on so long?
Relentless Hope: My colleague Stuart Simon calls it relentless hope. He uses the analogy of the Peanuts cartoon strip in which Lucy is always pulling the football out from under Charlie Brown’s kick but Charlie Brown continues to try, hoping she won’t. Why does he keep getting disappointed? Because he can’t let go of his expectations. Hope is getting in his way.
In the case where the client had to pull the plug on a project, there was a substantial investment in software, hardware, and the important resources of time and energy. They all kept hoping success was just around the corner. Just tweak this or that. “We’re just starting to gain momentum so we can’t get out now. We’ll waste all the resources we’ve already invested.” So the client kept pressing ahead until the evidence was clear the project wasn’t going to be worth the continued investment.
Conflict Avoidance: In some cases I surmise that it’s not just about expectations and hope of success but also about reluctance to face the problem. I worked with an organization that laughingly formed a 12 Step group called Conflict Avoiders Anonymous (CAA). In their case, it was easier to put a “work-around” in place than face the conflict head on. They hated difficult conversations and tended to beat around the bush in giving tough news or making tough decisions. Then there’s the whole emotional baggage of admitting mistakes.
In the book Thinking, Fast and Slow,which I mention in another blog post on right-sized optimism author Daniel Kahneman Kahneman also asserts we are more focused on avoiding loss than on achieving gain so therefore the gain has to be perceived as large enough to compensate for the potential risk. He also claims that “in bad choices, where a sure loss is compared to a larger loss that is merely probable, diminishing sensitivity causes risk seeking.”
In the case of the client who had already invested XXX,XXX dollars, to pull the plug meant the sure loss of that total investment. A risk of continued investment with the hope of success is perceived as worth it because the loss of that additional investment is just a possibility compared with the sure loss of the original investment if the project is discontinued (eliminated the chance of success).
Kahneman also talks about reference point adjustment. The idea is that we get used to new information, the reference point against which gains or losses are measured. Years ago I owned a real estate company. Often sellers would list their home and then adjust to that number as what they should receive. Their reference point had gone from what they had paid for the house originally, to what they expected to receive. Instead of looking at the potential gain of original purchase price to offer price, they focused on the loss of the offer price compared to the asking price. (This was in the days of continual appreciation).
In the case of the employee who needed to be let go, the company had invested money and time in recruiting and training. The reference point of standard of performance had been adjusted down based on the current employee’s performance. “They’re contributing these skills and know the job already, even though they can’t do this and they’re difficult to manage.” To think about replacing that person was to compare a sure loss of whatever skills they do have and the investment of money and time already expended, for a small gain a few more skills and a better attitude. So the employee stays on, because the reference point is no longer the gap from no one doing the work to a great employee doing the work, the gap is from a less than adequate but in place employee to a great employee.
Hold 'em or fold 'em?
How to get better at knowing when to hold and when to fold?
- Get someone from outside to help you assess potential loss and gain. They’re less likely to have a reference point bias.
- Go look for existing data to compare with. Has your project been done before and with what level of success or failure?
- Create your own data: describe the best case scenario and the worst case scenario. Evaluate the probability of the occurrence of each. Best case scenario planning is poor planning.
- Cut your losses early before your investment is too big to walk away.
- Get more comfortable with small course corrections.
- Learn how to face conflict directly.
- Stop beating your head against a concrete wall and thinking it isn’t going to hurt.
Are you putting something off because of relentless hope or because of conflict avoidance? What can you do today to assess your loss versus gain potential more accurately? What can you do to tackle something head on?