How We Sometimes Fool Ourselves When Making Decisions, Part Two

The Status-Quo Trap

We instinctively stay with what seems familiar.  Thus we look for decisions that involve the least change. 

For example, when radically new products are introduced they are made to look like an existing and familiar product.  The first cars looked like horseless carriages.  The first online newspapers and magazines had formats much like their print counterparts.

To protect our egos from damage we avoid acting to change the status quo, even in the face of early warnings that demonstrate that change will be safer.  We look for reasons to do nothing. 

For example, in one experiment, a group of people were randomly given one of two gifts of approximately the same value, half received a mug, the other half got a large, Swiss chocolate bar.  They were told that they could easily exchange the gift they received for the other gift.   While you might expect that about half would have wanted to make the exchange, only one in ten actually did.  The power of status quo kicked in within minutes of receiving an object. 

Other experiments have shown that the more choices you are given, the more pull the status quo has.  Why?  Because more choices involve more effort while selecting the status quo avoids the stress of making a choice

In business, the sins of commission (doing something) tend to be punished much more severely than sins of omission (doing nothing). In all parts of life, people want to avoid rocking the boat.

What can you do?  Think of your goals first, when preparing to make a decision, then review how they are served by the status quo as compared by a change.  Look at each possible change, one at a time, so as to not overwhelm yourself and then instinctively want to “stay safe” and unchanged.

Never think of the status quo as your only alternative.  Ask yourself whether you would choose the status quo, if, in fact, it weren’t the status quo.

Avoid the natural tendency of exaggerating the effort or cost or emotional reaction of others or for yourself if you change from the status quo.

Remember that the desirability of the status quo may change over time.  When considering a change, look at possible future situations. 

If you have several alternatives that are superior to the status quo, avoid the natural tendency to fall back upon the status quo because you are having a hard time choosing between the other alternatives.

The Justify- Past-Actions Trap

The more actions you have taken on behalf of a friendship, choice or belief, the more difficult you find it to change direction or acknowledge that you now feel differently. Whenever you invest time, money, or other resources, or your personal reputation is at stake, you will find it more difficult to change your decision or course of action. 

Suppose, after walking around a store, a low-key clerk asks you to describe your favorite feature of the store.  You answer.  She asks you to elaborate or show her. 

Each time you move, speak and demonstrate what you mean, you deepen your belief, get more articulate about it and are more likely to tell others your view after you leave the store.

Suppose you pour a great deal of time and effort into an issue. 
Because you have already used resources to prepare to put the process in place, you will find it difficult to withdraw, even when others are not enthusiastic about your idea. 

If you have a once-close childhood friend who has not been supportive to you for years, you’ll be reluctant to acknowledge that change and are likely to act as if you are still close.  Banks used to continue to lend to businesses that had fallen back on payments, thus throwing good money after bad.

For all decisions with a history, make a conscious effort to set aside your past actions, investments of emotion, money or other resources, as you consider whether to change direction. 

Seek out and listen to people who were uninvolved with the earlier decisions.  Examine why admitting to an earlier mistake distresses you. 

If the problem lies in your wounded ego, deal with it straightaway.  As the well-known investor, Warren Buffet once said, “When you find yourself in a hole, the best thing you can do is stop digging.”

Don’t cultivate a failure-fearing culture in the people around you at home or at work so that others perpetuate mistakes rather than admitting them to you and changing course. 

Set an example of admitting mistakes in your choices and self-correcting so that others believe they can do likewise without penalties from you.