Looking back, you realize there were red flags all along. After all, hindsight is 20/20. According to Adam Grant, this feeling is called Escalation of Commitment, and while it’s common in all aspects of life, there are methods available to help you decide if and/or when to cut your losses.Escalation of Commitment is when you double down even though you are becoming aware that what you are committed to is going in the wrong direction. This is because we want to prove ourselves and fear being judged. Imagine your boss gives you the green light for a project you are endorsing. Halfway through, you have exceeded your budget and realize the idea is untenable. You might be concerned that your boss will fire you if you admit it’s not going the way you anticipated. So, you try to fix the problem. The longer you hold on, the more damage you do. Better you come clean to your boss, learn from the experience, and move on.
Of course, this is far easier said than done. If you are working for a company that has a toxic culture, it could play a part in your escalation of commitment. The solution for you as an employee would be to ask yourself what is getting in the way of admitting this is not working out and then figure out a “kill signal”. This is a mechanism for keeping you honest, giving you the push to make the right decision for your well-being.
If you are running a company, it’s important to understand how your decisions are impacting your team. Take Google+: it took Google seven years to realize that they could not compete in the social media market. By that time, they had poured huge amounts of resources into the product. Learning how to accept failure builds trust among your team, allowing all of you to make critical decisions when such an occasion arises.
Learn more about How to rethink a bad decision on Adam Grant’s podcast.
The road is easier together,