The question exists; does “rational escalation” exist? How does a leader capture the power of commitment without inducing irrational escalation issues in team actions? Rational escalation remains a fallacy in decision-making and remains an excuse to create illogical paradigms for business processes and pretend non-rational escalation does not exist. If a decision begins as irrational, or an escalation of previous decisions without conscious need and new logic, denying the rational does not change the problems created.
Non-Rational Escalation of Commitment is best defined as, “the tendency to base new decisions on previous decisions.” This quote sums it up well: “If at first you don’t succeed, try, try, again. Then quit. No use being a damn fool about it.” W.C. Fields. (ThinkExist.com, 2009) In the most simple terms, people make a decision, get used to the consequences of the decision, become complacent in the known outcomes of the decision, base more decisions off the current model, and then repeat ad nauseam. Political decisions regarding the Federal Medicare Program are perfect examples of non-rational escalation of commitment. Politicians know there is waste, abuse, and issues within the system; but because it looks good to support Medicare, no one wants to begin to question the problems, advance solutions, or threaten withholding funding until the problems are fixed.
Since the problems with Medicare touch sensitive nerves with voters, politicians prefer a favorable electorate. Each year waste and abuse reaffirm the theory of non-rational escalation of commitment. “… Medicare’s administrative costs are shockingly low, below 2 percent of costs, because Medicare is shockingly unsupervised. The amount of fraud and waste is huge, and supervision of the quality of medical care provided recipients is largely nonexistent (NY Times, 1997, para 1).”
The emotions surrounding many decisions lead people or decision makers into trouble. Pride, confidence, fear, greed, a desire to do good, etc., are emotions that provide the impetus for making a particular decision. Continuing on the same path of that decision, whether right or wrong, leads to an escalation of the decision; thus, ensuring the risks of failure becoming larger as time passes. We see this currently on the ObamaCare Health Debate in Washington. Politicians have invested a lot of time and energy into the President’s “signature issue” and refuse against all logic to stop, examine the needs of the people, and accept it might be better to start over again. “… [A]sk people with direct ties to healthcare negotiations, who have put their lives on hold to get a bill passed, and they have no idea how to move forward (FoxNews.com, 2010, para 2).” The same problem exists today in 2015 as in this 2010 proclamation simply due to emotional investment and irrationally escalating poor decisions.
Escalation is non-rational for one reason: it always leads to trouble. Going back to Medicare waste, leaders recognize the problem, realize there is tremendous abuses of the system occurring, but refuse to stop escalating the amount of money to spend and force change due to fear. As shown with both ObamaCare and Medicare, when fear is the motivating factor for a decision, basic human emotions are the only force and the most difficult force to overcome. Logic has fled, reason is hiding, and chaos is gaining speed. Consequently, in the Medicare system the American people have tremendous unfunded liabilities with no possible method for making good on the commitments. Since there is momentum in sustaining the poor decision, momentum in continuing to escalate the non-rational decision-making process, and momentum to perpetuate abuse and fraud without recourse, the cycle of escalation and abuse will continue, thus fulfilling W.C. Fields quote from above, “If a first you don’t succeed, try, try, again. Then quit. No use being a damn fool about it (ThinkExist.com, 2009).” The “quitting” part of the decision paradigm needs attention. Einstein adds a special note here on non-rational decision making practices, “Insanity is doing the same thing over and over again, expecting different results (Brainy Quote, 2008).”
Understanding the irrationality in the escalated decision making process provides the impetus to leaders to begin changing the process of gathering data to improve decisions. The smart leader would halt the current decision-making process, ask probing questions about performance, customer service, and sustainability, then proceed to either justify continuing to make the decisions to engage without change or change the decision track to achieve different outcomes. I have heard the following too many times, “Taxpayers would be scared if the government was efficient, not wasteful and productive.” I disagree; elected leaders must on-board basic leadership principles, shun management philosophy, and then communicate in a two-directional manner their ideas, their reasoning, and logic. The expectation is for business leaders to act in this manner; why do elected officials get a pass on leadership?
The engaged leader will take the decision-making process and implement the following steps to improve decision-making performance as a step to improving organizational outcomes:
- Ask “Why.” This is a basic and simple step to take that possesses great potential to improve organizations. Asking “Why” leads to other basic questions arising, namely, “How,” “Who,” “What,” etc. Follow the string of logic and an irrational and escalated decision will be forthcoming.
- “Be strong and of a good courage,” remains a passage from the Christian Bible, repeated several times, that holds the key to improving decision-making, regardless of religious flavor. Think about the question asked. The leader is asked to stand for principled action and then boldly move forward in the direction chosen.
- Practice being aware. Being aware calls for the leader to be and remain engaged in the people, not the business, of the decision-making process. Tom Clancy, in the “Jack Ryan Novels,” made clear that the problem in Washington D.C. is not the politicians who change but the staff of the politicians and the special interest groups pushing a narrow agenda. The same process occurs in business organizations. People carve out a niche, develop power, gather those like themselves into a micro-network, and then influence organizational change and non-rational decision-making as a means to continuing in power.
- Make a decision, Act, Measure, Correct if necessary, Repeat (MADAM-CR) remains an acronym to remember and follow. Leaders make timely decisions, act, and then review for potential course correction changes or hold the course. MADAM-CR remains the pattern for making logical decisions, provided the first three steps discussed have been included.
- GIGO (Garbage In equals Garbage Out). GIGO remains the umbrella principle in decision-making. GIGO with non-rational escalation provides the input and product from the decision-making process. GIGO stands as the ultimate caution, not to halt action but to improve measuring for success and properly preparing.
Reference
Brainy Quote, (2008). Albert Einstein Quotes. Retrieved December 5, 2008, from BrainyQuote.com Web site: http://www.brainyquote.com/quotes/quotes/a/alberteins148814.html
FoxNews.com, Initials. (2010, January 22). Congress contemplates scaled back healthcare; obama slams door. Retrieved from http://congress.blogs.foxnews.com/2010/01/22/congress-contemplates-scaled-back-healthcare-obama-slams-door/
NY Times.com, Initials. (1997, August 01). Fraud and waste in medicare. New York Times, A-30.
ThinkExist.com, Initials. (2009). W.C. fields: quotes. Retrieved from http://thinkexist.com/quotation/if_at_first_you_don-t_succeed-try-try_again-then/227395.html
© 2015 M. Dave Salisbury
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