Ever hired an employee and developed gut certainty soon afterwards that you’d made a mistake? Did you:
a) Self-admit you tanked the decision, fire the employee, and start the search again regardless of how both decisions may reflect on you, your department and your boss or;
b) Decide the employee really just needed more of your time, attention and training in order to be successful.
Almost every manager I’ve ever known chooses option B, and that goes for even seasoned executives. Why? If it is clear the wrong decision was made, why make additional investment? Why not cut losses and move on? The reason, says Professor Barry Staw of UC Berkeley, is escalation of commitment to a losing proposition.
This natural human reaction to disappointment is a short-coming we oftentimes recognize in others but rarely ourselves. And we do it all the time, with boyfriends or girlfriends who should have been cut loose long ago, a dog of a stock that should have been sold years ago, a job you should have quit after your first three months on it, etc. The common thread here is personal investment (sunk cost). Once that has been made, it is extremely difficult for most people to resist doubling down on the investment in the face of contrary facts.
Adam Grant, a professor at the Wharton School, has some advice for those wishing to beat the escalation of commitment impulse:
1) Separate the initial decision-maker from the decision evaluator.
2) Create accountability for decision processes, not only outcomes.
3) Shift attention away from the self.
4) Be careful about compliments.
He expands greatly on these elements in an excellent article that appeared in Huffington Post. I encourage you to read it.