Showing posts with label cost-benefit. Show all posts
Showing posts with label cost-benefit. Show all posts

September 6, 2010

There's nothing wrong with creating "worst-case" scenarios - as long as you don't attach negative feelings to those scenarios.


When I first heard this statement during a leadership seminar, I somehow knew it was very important and would have far-reaching implications. At that time I preferred to ponder on it later and just noted it down. And since then I’ve realized so many different contexts that it is relevant for…

Think about different situations where you need to make decisions… To accept or decline a deal/an offer; to give honest feedback or not; to hire or fire someone; to escalate or de-escalate conflict; to set up your business or not; to ask for business or not; to quit your job or not… The list is long – pick your own favorite example before you read on.

Because we live in a world with a lot of uncertainty – either because we cannot gather all necessary information; or even if did, don’t have the capacity to process it all; or simply because we cannot see the future – our decision-making is never perfect.

One of the ways to simplify this process is to think in terms of best-case, most-probable and worst-case scenarios. So actually, it’s not that there’s nothing wrong with creating “worst-case” scenarios, it is actually necessary to consider them while making decisions!

Especially in certain industries or functions it is unthinkable not to consider those worst-case scenarios. Think about the credit department in banks – how could you not think of the worst case scenario before you approve a loan? Or imagine a lawyer working on an M & A deal – how could he afford to overlook the worst-case scenario? (Actually, professionals working in areas that need a constant/systematic focus on the worst-case scenarios are at a risk of carrying the same outlook into other areas, such as personal life, where such a focus is not always adaptive – more on this in a future post)

So there is really nothing wrong with working with worst-case scenarios per se. Although hopefully your decision-making is not systematically biased using only those types of scenarios. But what about those negative feelings that we attach to those “worst-case” scenarios? Even though one can think of a number of them such as, anxiety, guilt, sadness, disappointment what it really boils down to is: Fear!

Fear of: failure, rejection, losing a person, losing control, losing self-confidence, losing face, getting hurt, wasting time, not being able to handle whatever happens, not being accepted as we are…

And what happens when you feel fear? Although its impact shows variation among people, in general fear tends to block action and moving forward. It is more likely to keep people in the status quo, whatever feels safer. People become less likely to act on their decisions and gut-feelings even when they think there’s much to gain if they were to act.

Thus, instead of going active to confront a conflict, “fearing” the worst case scenario people avoid talking about the conflict or the person who’s on the other side of that conflict. Or instead of asking for business, “fearing” the rejection, they pass on an important opportunity.

Then the whole rationalization mechanism kicks in to justify their approach to avoid the resulting dissonance – the dissonance from not acting in the direction which could have also ended up in a “better than the worst-case scenario” result.

Another tendency that makes attaching negative feelings to worst-case scenarios even more problematic is that we are actually not good at affective forecasting. In other words, when we imagine how good or bad we would feel following a future event we tend to over – or under-estimate the intensity of our future emotions.

This happens because we tend to rely too much on our current emotions or some similar events that stand out in our memory due to their extreme/intense emotional significance as anchors. The consequence? Inaccurate predictions about how bad we would feel if the worst-case scenarios were to come true!

What’s a better strategy then? Well, the answer is in the title! We need to keep worst-case scenarios free of feelings as much as possible.  And how do we do that, you ask?

  1. First, start with best-case or most-probable scenarios to create a positive vision which leads to positive emotions including hope, sense of accomplishment, relief, confidence, pride etc.. When people feel good, their thinking becomes more creative, integrative, flexible, and open to information (Isen, 1987)
  2. Then become aware of your emotions as you think of the worst case-scenario. And get clear as much as possible what they are – name them! And ask yourself what’s behind them. When negative emotions remain as generalized unexplained anxiety or fear, it is much more difficult to do something about them. 
Here’s an example:

Issue: Confronting a colleague in a conflict
  • Best-case scenario: We’ll talk about the issue, express our disagreements, show respect, stay calm, clear the air, find a compromise satisfying for both. (Possible positive feelings: Hope, relief, accomplishment, confidence)
  • Worst-case scenario: Losing my control, getting emotional, straining the relationship, not getting what I want, losing face
  • Feelings: What am I feeling (specific!) right now when I think of the worst-case scenario? : Anxiety for not knowing what will happen, fear of losing the relationship, fear of losing control and face. Most of the time once you name and acknowledge the emotions, you already start feeling much more calm about the worst-case scenario! As a further step you can ask yourself how realistic that worst-case scenario is. 
  • Observer's perspective: Now that you have expressed the emotions – look at the scenario from a detached perspective, from an observer’s perspective. That is the perspective that would help with effective decision making. Now you can evaluate the scenario much better as you weigh its pro’s and con’s and hence, how “bad” it really is and finally how is probable it is. The data you have is not “confounded” by the negative emotions anymore.

Again, trying to make worst-case scenarios emotion-free doesn’t mean that we should suppress or ignore our negative emotions. On the contrary, emotions are  very valuable in decision making, they are signposts that signal what we are not sometimes able to pick up at the conscious cognitive level. Reflecting on them gives us a wealth of information about our needs, motivations, un-explored assumptions. This is why I suggest that you name the specific negative emotions you are experiencing when you think of the worst-case scenario. What I am arguing is that they shouldn’t be an obstacle in effective decision-making as they become an ingrained but unexplained part of the worst-case scenarios.

Getting used to “detaching” the negative emotions from the worst-case scenarios might and probably will take sometime and effort. This is true especially if you are someone who is not comfortable with working with your emotions; or if you believe that you never rely on them in your decision-making anyway. In that case, you would gain even more by reflecting on the emotional level of decision making because it means that so far your emotions have been influencing your decisions without your control!

"I am able to control only that of which I am aware. That of which I am unaware controls me. “  ~ John Whitmore


References:
Isen, A. M. (1987). Positive affect, cognitive processes and social behavior. Advances in Experimental Social Psychology, 20, 203-253. 

July 24, 2010

Do you know when to call it quits? (II)

And yes, sometimes the direction is right, but the way of getting there – well, not so much… This is also a tough one since the thought “But I am moving towards my goal/destination/vision” can prevent you from recognizing that there’s something wrong about the way you’re getting there.

One of my clients has been trying to move in the direction of higher level of leadership and responsibility for the past two years. Taking responsibility in leading her team, delegating tasks when necessary, mentoring her direct reports, making decisions related to deadlines, training, vacation, etc… However, along the way she was getting more and more frustrated. Reason? She found herself in a constellation of people (both at the management and the team levels) that made it very tough for her to move in the right direction. Her decisions were not being backed up by her boss threatening her ability to assert herself in her team. She had a few team members who not only failed to deliver quality work, but also had an indifferent attitude when she questioned them about it. But she was determined that she wanted to move to the next level of leadership and hence persisted in doing what she was in her current role. This was the point when we started working together.

At the beginning she was so convinced that she just needed to find a way to get the acceptance from her team and her boss if she was to get where she wanted to. At that point she had also started questioning her confidence and assertiveness. So, the move towards the direction she wanted was far from fulfilling to say the least!

How many people like that do you know who are in a similar position? Who find themselves hitting against a wall and spend most of their energy to demolish or dig through that wall because they are so convinced that, at the end of the day that’s the direction they want to go.

I have no problem with working to get rid of the obstacles on your way to whatever you want. On the contrary, I believe persistence and perseverance are key to success. My questions is: when do you say “Enough!”? What has to happen for you to ask yourself: “Yes, I want to move towards that direction but is it normal that I am so frustrated/ tired/ angry/ burned-out/ over-stretched/ unfulfilled along the way?”

When I started with a new path that I believed would help me move towards my vision and found myself tired, frustrated and unfulfilled along the way, my own coach asked me: “How long will you take it? How will you know it is time to stop? When will you know it’s time to say ‘Basta!’?” Hah, I thought…I rarely set criteria that will help me recognize when to call it quits*… And based on my work with my clients and observations of a lot of professionals around me, I am not an exception.

People rarely specify what needs to happen for them to change course and find another path that would take them in the right direction. Or when they do, generally that is limited to task-specific criteria: I’ll try this tool and if it doesn’t work (read: solve the problem, speed up the process, increase the sales), then I’ll try another one. But how about psychological indicators such as cognitive and emotional burden? Are we also willing to try another “tool” or path to get to there when the going gets tough? 

Well, I am happy to report that my client decided to say “Basta!”. She realized or decided that getting “there” in a fulfilling manner is as important as getting there. When you think about it, it is rarely about only the destination. The way of getting to your destination or in other words the journey or the process is an intricate part of the “right direction” from the very beginning.

And about my unfulfilled, frustrated journey? With the support of my coach I did define how I was to recognize the point where I call it quits. Despite that I must admit I did wait past that point. My learning? Next time calling it earlier to save myself time, resources and energy.


*”Calling quits” sure is a loaded term – and it is often associated with another loaded term “failing”. But as research also shows, knowing when to quit is a indicator of successful coping. It is also something high self-esteem people do more often than low self-esteem people especially when there are alternate ways to reach the goals.
Reference: Baumeister, R. F., Campbell, J. D., Krueger, J. I., & Vohs, K.D. (2003). Does high self- esteem cause better performance, interpersonal success, happiness, or healthier life-styles? Psychological Science in the Public Interest, 4(Whole No. 1), 1– 44.

July 16, 2010

Do you know when to call it quits? (I)


Mobility. The capability to move or to be moved. Ability to move or adapt, change or be changed. To move in the direction you want in a fulfilling manner.

This is the definition of mobility Timothy Gallwey uses in his book “The Inner Game of Work” on focus, learning, pleasure, and mobility in the workplace. Now, you might ask what mobility has to do with the title of this post. Take a guess before you read on… Mobility? Calling quits?

Well, it has everything to do with the title. Being able to say “That’s it! Basta! Stop!” is a very valuable approach when you realize you are either moving in the wrong direction or you are moving in the right direction but not in a fulfilling manner. Even though at times it makes us question our ability to persevere, being able to say “I quit” is an underestimated, underappreciated strength.

Let’s start with the first possibility that should lead you to say “I quit”: you are moving in the wrong direction. There are few conditions for this to happen:

  • Knowing what the right direction is (And what that “right direction” is deserves at least a few posts)
  • Knowing what benchmarks you should pay attention to in order to confirm you are moving in the    right direction (“I’ll know it once I get there” is not good enough!)
  • Awareness that you are off-track when a deviation happens (This requires not being distracted under time and performance pressure or continuously operating on automatic pilot)
  • Willingness and courage to accept you have been moving in the wrong direction (Often, we go lengths to believe and make others believe we are on the right way)
  • Willingness to make changes to start moving in the right direction again (Since there might be “hidden benefits” of moving in the albeit wrong direction, eg., good money, status, approval etc.,)


A lot of the times people take too long to recognize and accept that they’ve been moving in the wrong direction. This might apply to many paths that we’re on in our lives, from work projects to companies we work for; from career paths to relationship paths… Panaceas?

  • Take enough time and effort to clearly define what the “right direction” is.  The right direction in the current project you’re working on; the right direction for your career; the right direction in your relationships…
  • You should determine not only the ultimate destination, but also the stations in between so that you can keep track of the course and become aware of deviations. Don’t set yourself up for a situation where you’ll say “How come I haven’t realized it for so long?”
  • Within the pace of life it is easy to get carried away with time or performance pressure. You might find yourself from moving one task to another; one project from another , or even one relationship to another without a “chance” to reflect on how well your previous or next steps move you in the right direction. Use the following STOP tool to be more conscious and detect deviations in a timely manner:
    • Step back (from what you’re involved with)
    • Think (What am I trying to accomplish? Am I moving in the right direction?)
    • Organize your thoughts (Pull your thinking together in a coherent way)
    • Proceed (Continue with necessary actions)
  • Once you’ve realized you’re not moving in the right direction, you have to honestly ask yourself: “What is the cost of continuing in the wrong direction?” Time, energy, focus, enjoyment, stress, reputation, credibility, confidence, respect, relationships, purpose…?
  • Do the above costs exceed the “hidden benefits” (e.g., comfort, familiarity, recognition, money, approval, status) of the current, albeit wrong, direction?
  • After your cost-benefit analysis, ask yourself: “I which direction do I want to go?” Keep going in the wrong direction? Or call it quits and change course?
Next time…What if the direction is right,  but the way you get there is not so right? And the times when I  called it quits.