What Do Border Wars, Swine Flu and Business Plans Have in Common?

by Bart Gragg

What do border wars, swine flu and business plans have in common?

People avoid them like the plague.
They tell a story about the decisions we make.

Let me relate to you a recent personal experience that shows how decisions are affected. Our 17 year old highs school senior was scheduled to go on his senior trip which was a cruise to Mexico. As I write this the top news topics are the swine flu pandemic and the drug related gun battles in Mexico. The trip was booked prior to any of this news.

A month before the trip was to depart people got nervous about the drug wars, and it was decided

We avoid these like the plague!

to let the kids go on the trip with the proviso that they not leave the boat in one of the Mexican ports. A week later swine flu threatened the very existence of mankind. Sort of. But the news of its outbreak as being in Mexico made parents very nervous. Emails were flying back and forth between parents and teachers and school administrators. Phones were ringing off our belts. Fear was palpable. “What should we do? The sky is falling and our kids are all gonna die!”

So it was decided to cancel the trip. Fine. Except the cruise line wanted their money. A cancellation fee, the cheeky people. Of all the nerve.

At the drop of a hat parents were now effectively willing to put a price on their child’s life – $300.

What was the fee? We thought perhaps $300. What happened next? More emails, more phone calls. This time though, parents were saying “Well, times are tough, and I don’t want to lose $300, and don’t you think they will be safe anyway? I mean, they will be on the boat, right? Should we pay the $300?”

At the drop of a hat parents were now effectively willing to put a price on their child’s life – $300. Parents began to pressure the school for an alternative. Can we get all of our money back? Can they take an alternate cruise over the same time period? Can’t we just take them to Disneyland? It seems that a decision wasn’t made after all.

What happened here is actually very commonplace according to professor Barry Schwartz, author of the bestselling “The Paradox of Choice – Why More is Less”. Paraphrased from his book:

Opportunity costs – “One of the ‘costs’ of any option involves passing up the opportunities that a different option would have afforded.” We regret missed opportunities. Thus a decision was avoided until much later when parents were forced into it. Time ran out.
Exploding options – The more parents thought about it, the more options were put forth and the more options talked about the less anyone wanted to make a decision.

And then scarcity entered into the mix. According to Dr. Robert B. Cialdini, author of the national bestseller

People seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value

“Influence – The Psychology of Persuasion”, the idea of potential loss plays a large role in human decision making. In fact, people seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value.” Parents really began to squeal talk when they found out they had something tangible to lose – $300. (As opposed to a teenager, and if theirs is anything like mine $300 feeds him for a day. Maybe).

So what does any of this have to do with a business plan? Glad you asked.

First things first. What really happened in the story above is the parents forgot the main reason they were sending their child on the senior trip. To have time alone for themselves. The main reason for the trip is to reward the child for having made it through twelve years of school.

But events brought them through all kinds of fear of loss, fear of illness, inability to make decisions and fear of worry, which they spent and inordinate amount of time doing anyway. Why did they go through all of this?

Because they did not think through what their expectations were ahead of time.
They didn’t realize that options were another way to avoid making decisions – too many options cause inaction.
They were working from emotions, not facts. They weren’t clear on when to cut their losses. They hadn’t thought about the measurable benchmark that meant “Go!” or “No go!”

Which is what a business plan does for you. A well written business plan helps you sit and think about:

What is expected. What does success look like?
Why are we doing this? What reason we must keep in the forefront of our minds that guides our decisions?
What is satisfactory. Satisfactory does NOT mean substandard. It means “this is the path we have chosen and we recognize other opportunities will show up, but if we have to detour we will not pursue them.” A business plan reduces the angst of perceived lost opportunities.
When to cut the cord and move in a different direction. I used to say that we all make bad decisions, unless of course you make no decisions and then that becomes a bad decision. What should happen with a business plan is that we make informed decisions, move in the chosen direction, and know firmly the signs that tell us we are progressing as expected or not.
Manage by fact – not emotions.

If you want to talk about planning and see how it might help you or your organization, feel free to drop me a line. I always have time to talk about how easy they are to write. And the first call is free, so you don’t lose anything. Should make your decision easier.

Bart Gragg
925.757.7473
My email is below.