Avoiding the Escalation of Commitment Problem

Rose O. Sherman, EdD, RN, NEA-BC, FAAN

A nurse leader recently asked me for advice about what to do when a leader in her organization has made a bad decision and is now doubling down on that decision even though he is wrong. The situation involved a poor decision about a PPE supply chain that is not working out.

It is a classic example of the psychological phenomena called the escalation of commitment. Much like the idea of sunk costs in economics, this is a human behavior pattern in which an individual or group is facing increasingly adverse outcomes from a decision, action, or investment nevertheless continues the behavior instead of moving in a different direction despite the evidence. In this case, the leader in question is responsible for this decision. The supply chain identified is providing a faulty product, some of which need to be thrown away, costing the institution money. The rationale thing to do would be to acknowledge the problem and reverse course. The nurse leader has spoken up, but her observations are ignored. Additional orders were placed even after the problem was identified. She has been told to “make it work.”

Escalation of commitment is thought to have played a role in political decisions during the Vietnam War and, more recently, with Brexit. The individual’s or group ego threat is a significant factor. To avoid this problem, Adam Grant recommends that when making major decisions or investments, a way to prevent bad choices is to include a decision evaluator who does not have the emotional investment in the decision that the decision-maker does. Ideally, this senior leader should turn over the supply chain issue to a product and supply committee for an unbiased evaluation as to whether to continue with the investment. He would then make the final decision based on their recommendations.

Escalation of commitment is more likely to occur when a leader has the mindset that their opinion is right and does not invite others to participate. It is one reason why the best leaders talk last because they understand how influential their ideas can be on the decisions of the group.

One suggestion that could work for this nurse leader is to gently ask her colleague the question – “ If we had known what we now know about the challenges with this supplier – would we have ordered PPE from them?” The issue here is not what has happened in the past, but rather should we throw good money after bad. We are not anchoring a decision to continue to one that was already made. Leaders may persist on a course not only because they don’t want to admit errors to themselves but also because they don’t wish to expose their mistakes to others. If we can change the focus from the behavior of the individual to the availability of new information to inform decision making – we are likely to be more successful.

While some may think that “staying the course” is an indication of strong leadership, this is misguided thinking. There can be a very high cost of staying the course on a bad decision. Good leaders know when to pull the plug when something is not working.

Read to Lead

Grant, A. (2013). Give and Take. New York: Viking.

Marquet, L.D. (2020). Leadership is Language. UK: Penguin Business

Read Rose Sherman’s book – The Nurse Leader Coach: Become the Boss No One Wants to Leave