A recent story in the Wall Street Journal shared some recent academic research that showed participants who had no backup plan associated with their primary goal performed better than those participants who did have a backup plan in addition to their primary goal.
According to Jihae Shin, the study’s co-author and assistant professor of management and human resources at the University of Wisconsin-Madison’s business school, “Simply contemplating backup plans make you want to achieve the primary goal less, which makes you put less effort into it. As a result, you have lower chances of success in your primary goal.”
Shin goes on to note that when people anticipate that they’ll feel really bad if they don’t complete a task, they will work harder. But if they have thought of a contingency plan, which for most people is human nature, they might feel more comfortable slacking off. But this research suggests that people should be more strategic and understand the potential downside of formulating such a plan.
I’m not sure I can agree with the results of this research, which seemed to use a trivial task and minor reward in its experiments. The task was unscrambling sentences, with rewards ranging from a free snack bar to an extra $1.00 if the participants completed the task.
I’m not sure I would equate the importance of such a task and potential reward with the type of task one might face in the real world when developing goals and evaluating risks and rewards.
Shin and her co-author Katherine Milkman note that their results only relate to situations where there is a strong link between effort and achieving the goal. However, I think in most real-world situations, there are many factors that affect whether or not a goal is achieved.
For example, a few years ago when I was contemplating whether or not to start my own personal training studio, someone advised me that I should quit my teaching position and just concentrate on the fitness business. Otherwise, I wouldn’t be “all in”, as he put it, and that would lead to compromising my potential for success.
Such a decision would have been a disaster. While the personal training studio did not do well, I don’t think it was because I kept my teaching job. In fact, it was the money from my teaching job that enabled me to keep the studio going when it ran into some tough times. I ended up closing the business after four years, and I was fortunate that I still had my teaching job.
In the comments section of this Wall Street Journal article, one person mentions Cortes and his order to “burn all the ships” so that there was no other option but to fight, as well as Julius Caesar’s decision to cross the Rubicon, which implied a point of no return. Both Cortes and Caesar were successful in their exploits, but those decisions seem to be taking the “no Plan B” thing to an extreme.
I think in most situations having a backup plan is essential, and should really be considered part of your primary plan.
In finance, people are taught the value of diversification, of not putting all of their eggs in one basket. Investors can reduce risk by having a portfolio of well-diversified stocks, while still earning an acceptable return.
That’s how I view a contingency plan; it’s a way of minimizing risk while still focused on trying to maximize your goals.
I’m not sure you can really study the real-world implications of having or not having a contingency plan. Shin and Milkman note this limitation in their general discussion. Who would be willing to be part of the experimental group that had no Plan B?
It certainly wouldn’t be me…