Lesson from 2016 – don’t discount people’s fears…

Now we are a couple weeks into 2017 and I am starting back writing again as one of my 2017 resolutions. What better way to start out is to capture lessons from the past and in a series of posts I will do just that based on lessons that I believe we should all take away from 2016.

In 2016 many of us heard about the scary clown craze and some people have significant fears of clowns and others do not so it is a good lead in for this discussion.

One of human’s greatest emotions is fear. We make irrational decisions based on fear. Fear of not being accepted. Fear of not being good at something. Fear ob police. Fear of losing a relationship. Fear of losing security. The rational human actor of traditional economics has been debunked by behavioral economics and the irrational human actor.

This irrational human actor often acts the way they do out of fear. People are motivated by fear and make decisions that are not in their best interest out of fear. For those of us without those fears it is easy for us to discount these choices made out of fear.

One lesson 2016 has taught us is don’t discount people and their fears if you haven’t walked in the same shoes you cannot truly relate. And, instead of discounting those fear-based decisions, understand the fears, empathize with those fears, and help people get past those fears. Only by understanding, empathizing, and helping people get past fears will move people from fear-driven decisions and drive them to data-driven decisions.*

Remember people no matter where they are from, what their education is, or how they grew up still have emotions and fear being one of the strongest. Instead of negatively increasing their fear, try to mitigate fear with empathy and positive messaging.

This week those of us in the United States have a new President and it is good for us to understand that Donald Trump just like all Americans and people in the world has fears. It is each of our responsibilities to understand, empathize, and helping him and all of our fellow citizens get past their fears.

*In a future post I will be speaking about data driven decisioning and lessons from 2016 including the need to have healthy skepticism about data and understanding what it indicates and what it doesn’t indicate.

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Don’t let sunk costs sink you

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A popular term in economics, accounting, and finance is “sunk costs” which basically means costs that have already been spent. These costs may be from software purchased, processes redesigned, machines purchased, consultants hired, etc. Whatever the costs are it has been spent and there is no getting it back.

Instead of looking at what has been spent you need to do a fresh analysis right now to determine what decision you would make looking at things are fresh. This might mean going a completely different direction in software or equipment used.

Of course there are political dynamics here because somebody made that decision to spend money previously and if the course changes there are always questions that arise and there are people that will defend actions. In a later post we will discuss this and other potential things to take into account when making decisions counter to past decisions.

The following are things to remember when making a decision that could be impacted by “sunk costs”:

  • Analyze fresh: Remember sunk costs are just that – sunk. Do not include them in your calculations and make fresh decisions whether it is on changing a process, software, or hardware.
  • Do not get emotional: Avoid that emotional tug you and others may have to feel bad about money and time previously spent. Getting someone involved that does not have emotional baggage on the particular item is best.
  • Understand history: Oftentimes new people come into a department and are quick to find things that are “wrong” and should be changed. Getting fresh perspective is vital. However, understanding history and why decisions were previously made will help you ensure your new analysis takes into account all needed items into the calculation at hand.

It is important that you as an individual contributor or leader understand sunk costs and how to take a fresh lens to a problem and ignore these sunk costs in making good decisions will ensure that sunk costs do not sink you.

As always appreciate your feedback, emails, comments, likes, and re-tweets!

photo credit: *Amanda Richards via photopin cc