When I returned recently from two weeks of speaking engagements in Europe, our world had radically changed. As the news of the coronavirus expanded exponentially, I started to think of my next visit to Europe, which was supposed to begin just a few days later. When I looked in the mirror, however, I was confronted by the hard reality that I had stopped making rational decisions about risk.
I pondered all the pre-planned events, meals, meetings, not to mention the pre-paid travel expenses, that my next trip to Europe would entail. When I thought of all the work that had already gone into those two upcoming weeks, my initial inclination was to continue with my itinerary. What I didn’t realize was that I was being blind-sided by biases that I often write about: sunk-cost bias and escalation of commitment.
Essentially, those lead us to continuing a path where we have invested time and resources, and that the closer we are to the finish line, be it a sales goal, deadline, or in my case, a very robust travel schedule, the more risk we might be willing to take to get there.
In other words, it’s a blind spot that inhibits us from a course correction when one is warranted. I usually frame it in the context of a small bribe to get goods inspected, a customs clearance, or some small step at the end of a long sales cycle, where someone might take greater risk to get to the finish line, even where those demands should trigger hitting the “pause button” while we unpack the final obstacles with our teams.
But the problem with blind spots is that they often convince us that we don’t have any, so when family and friends started emailing and calling me, asking when I was returning home, and when would I be traveling again, I was very calm about my decision to return to Europe. I was even a bit defensive when my network of friends and loved one’s challenged my plans.
After all, what was the probability of my getting sick, weighed against all those costs and events? I didn’t realize it at the time, but I was irrationally calculating risk because of all the time and costs I had invested, and the proximity with my departure date. After enough of those calls and emails, I decided to wait until I returned home to re-set and re-think. After all, making decisions “on the fly,” often jet lagged and sleep deprived, doesn’t enhance good decision making — it depletes it.
By the time I returned home, decisions were far simpler: most of the events had already been cancelled. I advised the organizers that I would not be attending the ones that weren’t.
I also took time to reflect on how during those two weeks abroad, that sunk-cost bias and escalation of commitment were getting in between my desired course of action — to stay healthy — and my actual behavior. I just didn’t see it.
Back home, I have reached out to friends and colleagues who are still traveling to events and conferences (the few that are still scheduled). I asked them of their plans, and their responses were like looking in the mirror: Decisions to stay the course based on non-refundable plane tickets, dinner plans, meet-ups, and other social and professional commitments that were made long ago. And with the events only days away, I saw my colleagues’ propensity to take on risk going up, instead of considering a highly merited course correction.
We have a duty to care for one another as a community of likeminded professionals. I only ask for those thinking about their plans over the coming days and months to hit the pause button and ask family and friends for counsel. They might see it more clearly than you.
Sunk cost bias and escalation of commitment are powerful forces. If you don’t have an accountability partner who might challenge your decisions, now’s a great time to appoint or find one.
And as a closing note to my compliance colleagues: These are volatile and challenging times for those in the field who face risk in their work. There are serious headwinds and uncertainty out there in global markets, while at the same time compliance resources might be constrained due to travel and budgets.
But it’s also an opportunity. There might be no better time to pick up the phone, or use video resources, and reach out to those who need you the most. A simple call of “how are you doing?” or “how can we help you?” It’s a daunting time for commercial teams, and if there’s any part of an organization that can help mitigate fear and uncertainty among global sales personnel, it’s our ethics and compliance leaders, who can send the message “stay the course until a better day.” It will come.