By Adam Stanley, Global CIO and Chief Digital Officer
Too often our egos, along with deeply ingrained attitudes about money and quality, make it very difficult to stand back and clearly evaluate a project’s value.
So, this is the kind of blog that could get me in a bit of hot water, but oh well, here’s the deal: I’ve been mulling over ideas around pricing and quality and how decisions are made and projects launched.
To help you get where I’m coming from think about the last time you or someone you know went to one of those dining emporiums where dinner costs roughly the same as a monthly rent payment. It’s pretty rare that anyone who goes to such a place will say anything negative about it unless it’s outrageously bad. The question is: was the restaurant so great or are we hard-wired to believe that anything that costs so much has to be amazing? Same goes for high-end cars, clothes, homes, and so on.
What makes us defend the quality of high-priced goods or services even when we know they don’t measure up? There’s tons of psychology and theories around such behavior, as retailers know full well. Because it’s partly about not liking to admit we made a mistake when we drop a ton on money on something. I’m labeling this blind spot the Embarrassment Bias.
It Cost More, So It’s Worth More
This pervasive bias is also very active in the corporate world. Put it this way: the amount of straight-up honesty you get out of a team that’s led a large initiative is often directly linked to the size of the budget involved. The more money spent, the less objectivity there is in the picture, no matter what the outcome.
How many executives have bought into an expensive venture that winds up being trashed? Taking risks has healthy aspects for sure, but why is it so hard to stop a runaway train? The problem is that teams can get so heavily invested in a high-stakes project that they lose the ability to see whether it’s worth pursuing or not. They become blinded by the prestige, scope, and pressure to deliver positive results — and it’s goodbye objectivity. Of course there are always people who know things are going sideways, but until the bitter end will say “nothing is wrong.”
It takes great courage for teams to bust through the Embarrassment Bias and halt big programs, but there are notable stories of companies that have done just that. In 2015, agribusiness-giant Cargill attributed a large chunk of a $51-million loss to a write off relating to an enterprise resource planning system that didn’t meet their needs.
Our relationship with money, as explored here by MIT, is twisted and complex. How we relate cost to quality has deep roots that touch on all sorts of survival instincts. When it comes to major ventures with big teams and wild price tags, our egos and deep need to fit in make it very hard to keep an eye on end goals. And no one wants to risk embarrassment.
Check your biases at the door
Anyway, it’s good to check in on our biases around pricing and quality from time to time – and there are stop gaps to prevent a train wreck. At Cushman & Wakefield, our IT teams actively work to diffuse the Embarrassment Bias by using the partner-first, fail-fast philosophy. We avoid the mega-million-dollar projects that take two years to execute and risk being obsolete by the time they’re done. Instead, we look for ways we can partner or more nimbly create innovative client-facing and colleague-supporting solutions.
We partner first and fail fast because we know that sometimes we’re all capable of placing bad bets. The idea is not to stick to an ill-fated project, rather to fail fast and move on. We never want to be in a situation where we feel we must put lipstick on the pig because we paid a million bucks for it – and that’s a big part of our success.
Be well. Lead on.
Adam Stanley provides strategic and operational direction for Cushman & Wakefield’s client facing and colleague technology systems and infrastructure across all global business lines. Drawing on his more than 20 years of industry experience and as an integral member of the global executive team, Adam is a change agent with proven success driving growth, performance, talent retention and innovation.