Braking Point : How Escalation of Commitment is Destroying the World (and How You Can Save Yourself)

By Vincent deFilippo

STOP TRYING TO OUT-CRAZY THE CRAZIES!

Lately, we've been hearing a lot about things "escalating" – in a bad way: Disagreements between friends and lovers escalate into screaming matches and threats, iffy investments and bad bets escalate into financial ruin, crazy conspiracies escalate into an attempt to overthrow the United States government…
One way or another, we have fallen victim to "escalation of commitment" – better known as EOC.
We are hard-wired to make mountains out of molehills, pour gasoline on a fire, spiral out of control, go over the edge, cross the line, and say things better left unsaid.
And, like lemmings racing over a cliff, we seem almost fated to go too far. Despite reason and common sense telling us to quit while we're ahead, to cut our losses, to get out while we can, something keeps us escalating the crazy. We just step on the gas and speed up the irrational.
EOC is pervasive, insidious. From the decisions we make in our personal lives and careers to those made by businesses, organizations, and nations. EOC rules. At best, if we're lucky, maybe reality sets in (hopefully), but only after tremendous investments have been squandered – or irreparable damage has been done.
Fortunately, EOC can be avoided – even stopped.
By understanding specific EOC motivations and effective strategies to diminish them, more effective decision-making can result. With this in mind, Braking Point offers a detailed look at why we often get swallowed up in EOC scenarios and how we can avoid them. It's an essential resource for anyone looking to enhance their decision-making capabilities in any area of their life.

• Language: English
• Publisher: ‎ ViennaRose Publishing
• Release date: Jul 31, 2023
• ISBN: 9798223996545

Book preview

Section 1:

Why We Go Too Far in the First Place

Chapter 1

The Magnetic Pull of Commitment

In 2018, Indra Nooyi, PepsiCo’s powerhouse female CEO, decided to retire. Over two decades, the unlikely leader advanced the company’s standing in the marketplace, making a name for herself in the process. How did a woman attain such a lofty position in an era where glass ceilings are still an architectural norm?

Through incredible commitment.

For Nooyi, dedication and hard work is not simply a recipe for her own success but a way of life. Growing up in India in a traditionally tight-knit family, she was an unlikely candidate to be the head of a major Fortune 500 company, but after obtaining a college degree, she applied to Yale School of Management and was accepted, much to her own amazement. Going against her mother’s wishes, she left India and committed to excel. Excel, she did.

Over the course of her career, Nooyi not only outperformed her peers, but she outworked them as well. As CEO of PepsiCo, she would often spend nights in her office intent on making the company the best it could be. By all accounts, her level of dedication allowed her to have it all. In addition to nearly doubling PepsiCo’s net revenues over a ten-year period, she also managed a productive home life with her husband and two children. In the process, she became one of the most recognized role models for executive women everywhere.

The commitment to career success enabled Indra Nooyi to achieve what few other women have been able to accomplish in recent times. But success has had its costs. By making PepsiCo a top priority, Nooyi missed out on other opportunities. Corporate meetings and travel plans prevented her from attending her daughters’ school functions, and many evenings she could have been at home with her husband and family were spent reviewing reports and business strategies in the office. In retrospect, does Indra Nooyi still think she made the right decision?

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Commitment—The Mental Magnet Between Values and Action

What comes to mind when you think of the word commitment? If we’re not talking about being forced into a mental health facility, commitment has mostly positive connotations. Commitment suggests dedication in the pursuit of some valued goal. It also suggests a willingness to take risks for something worthwhile. It implies a long-range vision that we tend to associate with stability and patience. Without question, the ability to embrace a commitment is an essential component in attaining success.

However, not all commitments are necessarily good ones. Consider the attorney who works 60 hours a week to get ahead at his firm only to realize 20 years later that he is truly unhappy. Or the company so committed to a few key customers that it fails to develop a more diversified market for its services. In order for us to ascertain where we need to draw the line, we must first gain an appreciation of the advantages (and pitfalls) that commitments offer.

By definition, a commitment represents the investments, promises, and contracts we make that bind us to a particular course of action. We routinely make commitments within our relationships, in our educational pursuits, and in our career choices. Organizations regularly commit to specific resource allocations, operational procedures, and market strategies.

Why do we make these commitments? Because we expect they will bring about results that we believe are valuable and desirable. By choosing a particular course of action, and sticking to it, we believe positive results will happen.

In essence, a commitment is the mental magnet that connects what we value to the process we take to acquire it. Our overworked attorney may value financial security for his family and prestige within the community. Thus, he commits to working excessive hours to achieve these goals, assuming this will bring him and his family rewards. Similarly, the company that commits to pleasing its core customer base may value loyalty and low-risk strategies. They may choose not to pursue new clients aggressively. In short, commitments are designed to help us realize those results that we value the most by locking us into a specific course of action.

Choosing Not to Commit—Sometimes the Best Prevention

Society generally encourages commitment making as a positive behavior. Because commitment demonstrates a desire to achieve a valued goal, this assumption is understandable. But making a commitment is not always the best course of action. Circumstances exist in which investing in a commitment is precisely the wrong thing to do and, as will be discussed, situations can change in ways that require us to reassess whether our initial commitments remain worthwhile.

Let’s consider one of the most important and common commitments individuals make in life . . . marriage. Prior to the 1960s, marriage was an accepted social norm with divorce being relatively infrequent, in part due to the need to state legally recognized reasons for the dissolution of the marriage. He annoys me was not considered sufficient grounds for divorce. In the two decades after states passed laws that made no-fault divorces the norm, the divorce rate doubled.

Given these circumstances, how do you think future generations viewed their own commitment to marriage?

As you might have guessed, many people who grew up during this time decided against the institution of marriage. Rather than continuing to embrace the social norm and commit to a long-term relationship at an early age, they chose to delay the decision until later in life when they had a better perspective on what they valued. Others simply adopted the view that cohabitation, with its lesser degree of commitment, was a better course of action.[1] Without clear answers about whether marriage truly achieved a relationship that people valued, many simply chose not to make such a commitment.

The common thread here is balancing what you know (or think you know) about something or someone you’re contemplating a commitment to against what you don’t know. Whether the subject is marriage or a career or an investment of resources, some level of commitment is a necessity if you hope to achieve your goals. The danger is when the commitment escalates in the face of unknowns, uncertainties, and a sneaking suspicion that you might be (gasp) wrong—that this commitment could lead to failure or even harm.

When Commitments Become the Problem

If you had to guess what poses the biggest obstacle in making a commitment, which would you choose: the inability to make a decision (i.e. dithering . . . or waffling, if you prefer) or a reluctance to give up other options? Both would be a good guess, but the most common barrier to embracing a new commitment is adherence to commitments you have made in the past. Choosing to stick to a tried-and-true course of action can be the biggest hindrance to adopting a new one.

In a word: habit.

In an article by the Harvard Business Review, business professors Donald Sull and Dominic Houlder coined the term active inertia. The active component of the term describes the effort we extend toward a commitment. This differs from a fear to commit. Active inertia implies that we’re already investing in a course of action. Here, inertia refers to the inflexibility that prior commitments can create.[2] The very nature of a commitment, with its implication of a long-term pursuit, can prevent us from moving in a new direction. Therefore, many people and organizations find themselves unable to adapt to a changing environment.

Sears offers a great example of how commitment can ultimately lead to an organization’s demise. Once as dominant as Amazon is today, Sears was America’s retailer. Its extensive catalog-based infrastructure, dominance in the appliance sector, and major credit operations hoisted the company to national retail prominence. Then along came the internet, e-commerce, and advancing retail competition. Sears, committed to its old ways, failed to adapt quickly enough. Eventually, the company found itself caught between more efficient low-price stores and those offering higher quality goods. By the time Sears was forced to commit to a new strategy, it was already too late.[3]

Change is the only constant in life; sometimes commitments can get in the way of changes we need to make. This is true of individuals as well as organizations. Past convictions may no longer make sense as our values evolve over time. Social norms change, making past actions seem rather silly, if not unjust. Businesses can overcommit to old processes, policies, and procedures that simply no longer work in new market environments.

While commitments are important in helping achieve goals, they must also be frequently reassessed in an ever-changing world.

Implicit Commitments—The Invisible Magnetism

Signing a mortgage, paying a semester’s tuition for college, or saying I do at the altar are all clear-cut examples of commitment. These overt, explicit actions announce your intentions to invest your time, energy, and resources in some valued activity. Not all commitments are so visible. In fact, often the commitments we make are silent and unseen—tacitly understood without any tangible evidence that they exist. These implicit commitments can be just as powerful (if not more) than those the entire world can see.

Implicit commitments are more common than you might think. They exist between employers and employees. They are common among friends and family members, and may even exist for one’s self if a person vows to never, ever repeat some past action that led to failure. Some married couples agree before their wedding never to have children, yet later one or both may change their mind. Despite this shift, the implicit commitment made at the time of marriage persists and affects all future decisions within the marriage.

Implicit commitments are extremely valuable, and would be considered honorable from any perspective. Sometimes these implicit commitments can affect us in negative ways, but because we fear what others may think if we break our commitment, we continue in our efforts. Implicit commitments are extremely powerful in this way, especially when they align with existing social norms.

So, when is a commitment a good thing and when can it be detrimental? There’s no simple answer to this question, nor is it one that everyone will answer the same way.

In a recent interview with Forbes magazine, Indra Nooyi reflected on her career at PepsiCo and her ability to juggle all her commitments in life. Overall, she has few regrets in the commitment she made to her career, and she believes she served as a role model for her daughters in the process. At the same time, she acknowledges some anxiety and guilt.[4] Her response offers a perfect example of how one commitment prevented her from pursuing others and gives insight into the challenges inherent in deciding which commitments are of more value.

It’s important to appreciate the purpose that commitments serve in our lives. They allow us to determine and honor our values and enable us to link investments to goals. The challenge comes when circumstances change or when we lack the necessary insights to make the best decisions about our commitments.

How do we rise to the challenge? That’s the question this book was written to answer.

Chapter 2

Stick in the Mud, Leaf in the Wind

Once upon a time, a father and son traveled from their rural farm into town to sell their mule. Though they valued the mule, times had been tough, and they needed the money to eat. So, the two set off on their journey with the father leading the way on foot and the son—the smaller of the two—riding the mule. Given that they had departed early in the day, they hoped to be to market by early afternoon, allowing them ample time to sell the animal and collect their payment.

Along the way, the father and son passed several people. The first group saw the son riding the mule and taunted the son, saying he was being disrespectful to his father. The son then swapped places with his father. However, the next group of travelers scoffed that the two were foolish because they could both ride the mule. The father then joined his son on the mule’s back. But a third group of passersby expressed concern for the poor animal carrying so much weight.

In the final hour before arriving at the market, the father and son took turns carrying the mule, but by the time they arrived, they were exhausted and it was getting late—the market would close in mere minutes. In an effort to get to the market before it closed, the father picked up the mule and began to run. As fate would have it, he stumbled on a stone, and all three of them tumbled down the hillside.

When all was said and done, the father had broken his leg, the son had broken his arm, and the mule—that was to be sold to save their farm—was dead. The pair were forced to sell the poor animal’s hide and meat for a fraction of what it would have brought live and then needed to use the money to pay the village doctor to set their broken limbs.

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The Anatomy of Decision-Making

What guides our decisions? In today’s world, most of us believe we make the best decisions when we’ve collected sufficient reliable information. After all, we live in the Information Age, a magical age in which vast pools of data offer abundant opportunities for deeper insights. Simultaneously, we rely heavily on our past experiences and gut instincts to help us when data are missing or are simply not immediately accessible.

In the fable about the father, son, and mule, the outcome certainly suggests that the farmers lacked good decision-making structures. What contributed to their (ahem) downfall?

•  Neither the father nor the son seemed to have a firm idea about how they might most efficiently (and safely) get the mule to market. This suggests a lack of knowledge, experience, or forethought.

•  Vulnerability to unsolicited feedback caused them to repeatedly alter their approach, wasting time and energy.

•  A lack of confidence in their own instincts and reason also played a part.

All of these factors led to their ultimate failure and, regardless of the reasons for their poor decisions, their sad story shows how a simple situation can become overly complex when elements and perspectives we failed to consider suddenly show up to play. How we analyze (or fail to analyze) available perspectives inevitably affects the decisions we eventually make.

Challenging circumstances can impact every aspect of life, from business strategies to personal moral dilemmas. How we approach these situations, and the decision-making strategies we choose, influence the final result. More importantly, they influence the level of commitment we invest in a particular idea or action. The upshot of this is that effective decision-making is nearly always handicapped in some way—often without us realizing it.

In addition to a lack of knowledge, information, or experience, time constraints may prevent us from making the best decisions. Likewise, past experiences may cultivate biases and prejudices that are inaccurate and lead us down a poor decision-making path. Life demands that we make most decisions with some constraints, so it’s important to understand how we, personally, make decisions.

––––––––

1.  What elements do we take into consideration?

2.  What are our goals?

3.  What are our risks?

4.  What are our fears?

Understanding the answers to these questions is crucial to critiquing the quality of our choices.

To underscore the importance of knowing why we choose one option over another, let’s consider a critical life decision that Mike Smith and Dick Rowe made back in 1961. Responsible for evaluating new talent for Decca Records, the two invited a music group to their studio to audition for a possible record contract. After hearing the group play, and after a few weeks of deliberation, the two executives decided that the band simply didn’t have what it took to make it in the music industry. In fact, they opined that bands with guitars were clearly on their way out.

What was the music group they decided to reject? Four Liverpudlians who called themselves The Beatles.

Without knowing what went through Smith and Rowe’s hive mind, it is impossible to state with any certainty why they believed The Beatles wouldn’t succeed. They may have doubted the band’s enormous potential based on the information available at the time, given their perspectives on the music industry. Whatever triggered Smith and Rowe’s decision, analyzing the factors that played a role in their epic miscalculation might provide insights into better decision-making for all of us.

Letting Emotions and Instincts Be Your Guide—The Good and the Bad

How many decisions do you make each day based on gut instinct?

Whether you realize it or not, you likely make dozens, if not hundreds, of instinctual decisions. Seems unlikely, doesn’t it? After all, we pride ourselves on being logical creatures equipped with reason and rational thought. Basing important decisions on an emotion or instinct seems not only irrational but silly. But gut instincts are much more powerful than you may appreciate; many times, they are better than logic alone.

Think about that statement for a moment.

What if you had to think through every single decision you made each day? No doubt your level of productivity would decline—precipitously. The time you would spend comparing options and alternatives would distract from other opportunities. Not all decisions are appropriate for logical consideration, especially when you’re under time constraints and a quick decision is needed. In many cases, your initial instinct or emotional reaction will be correct.

Although reason and logic often provide the best strategy for decision-making, instincts and emotions are not without merit. The way you react to a situation and how you feel about various alternatives is entrenched in past experiences, memories, and even personal epiphanies. At an unconscious level, somewhere deep within our minds, lasting impressions are catalogued and retained. You could therefore say that instincts and emotional reactions are, in their own unique way, rational and logical, serving as a basis for making good decisions. In essence, repeatedly experienced results take on the role observation and experimentation hold in a scientific context.

Didn’t I say earlier that emotions can harden into biases or prejudices? I did. Knowing when to trust your internal decision-making habits is part of the art of avoiding going too far.

Experiments conducted by researchers at Princeton University examined hundreds of individuals in scenarios in which participants predicted how much information they would require before making a final decision. In every case, the actual amount was far less than the participants predicted. The authors concluded that we rely on our gut instincts much more than we realize and overestimate the role reason and logic play in most decisions we make.[5]

Awareness of the significant role emotion plays in decision-making is not new. David Hume, the philosopher, believed emotions served to guide logic and rational thought. Lawrence Kohlberg, who spent his career examining moral development, also recognized emotional maturity as being essential to effective decision-making. More recently, advertising and marketing gurus have come to appreciate how emotionally charged messages can affect purchasing decisions both directly and indirectly.

Here’s the point: Failing to understand the role emotions play in our decisions can lead us up the wrong decision tree and strand us there.

Just the Facts, Ma’am—The Downside of Logic

In Antonio Damasio’s book Descartes’ Error, the neurologist/author describes several patient cases in support of his theory regarding the effect of emotions on reason. One patient in particular had suffered a brain tumor that affected a portion of his brain essential to experiencing emotions. Situations that would normally have triggered strong feelings, he could only consider from a rational, objective point of view. The interesting aspect of this case involved a decline in the patient’s decision-making capacity. Despite being an effective decision-maker prior to the tumor, the absence of emotions completely handicapped him thereafter.[6]

Damasio wasn’t trying to suggest that rational thought wasn’t important for effective decision-making, but that emotions play a critical role by guiding logic more empathetically. Many of us respect those who are analytical, scientific, and focused on objective facts while viewing individuals who make quick, instinctual decisions as erratic and reckless. This view is not without justification. The average person today assigns much more value to reason than they do to emotions and instincts . . . or at least they believe they do.

The point is: Neither decision-making tool stands alone. Both are needed in balance.

Our dependence on emotional guidance has greater relevance today than ever before, and will continue to gain in relevance in the future. Data analytics are rapidly changing the world. As Big Data is embraced more fully, and artificial intelligence (AI) becomes the norm in every sector, how will this impact decision-making? Even the best data system will never have complete information. Even if it did, being able to assign relevance to each data point in an accurate manner would be impossible. Unguided by human emotions, values, and instincts, what decisions will result as we come to more fully rely on these systems? If Damasio is correct, the lack of emotional guidance could well lead to poor decisions.

Other researchers have made similar claims. Daniel Kahneman, who won the Nobel Prize in economics in 2002 for the psychology of decision-making, introduced the importance of both emotional and logical aspects in making decisions. Using his terminology, System I involves intuition and emotions, thus decision-making is quick, reactionary, and experience-based. System II, which involves making decisions with logic and reason, is slower, fact based, and requires more effort. Both systems serve important roles in effective decision-making. Kahneman’s ability to showcase his research through a variety of experiments awarded him international recognition and launched the entirely new field of behavioral finance in the process.

Again, none of this is to imply that logic and reason shouldn’t be an essential component of decision-making. However, relying solely on logic without recognizing the importance of emotions and instinct can lead to both inefficiencies and poor insights. Conversely, overreliance on gut instinct or intuition can lead to acting out of bias, prejudice, or failure to grasp the potential effects of our decisions on people downstream.

The best decisions occur when reason and instinct are employed together. Different situations may demand more of one system than the other, but both are important for decision-making success.

Seeking Balance to Avoid the Falls

Here are some takeaways:

•  In some instances, we may need to make a quick, intuitive decision due to time constraints or other factors.

•  A lack of information and insights may demand greater reliance on past experiences, habits of thought, and gut instincts.

•  Having the time to explore details, facts, and downstream effects may give reason a larger role in guiding decisions.

•  Failure to see the pitfalls and benefits of each approach can lead to poor decision-making and, unfortunately, bad outcomes.

•  The key is to invite a balance between emotion and reason while recognizing either may be insufficient alone.

In reassessing the fable at the beginning of the chapter, the right decision was likely the one that the father and son made before they left on their journey. The son was likely lighter in weight, which would have permitted the mule to more easily carry the load. The father was more experienced and likely a better guide for the trip.

Their ultimate pitfall was being overly concerned with what others thought about their decision.

In other words, their emotions got the best of them, resulting in the father and son aborting their original decision. If they had stepped back and considered the soundness of their original plan and the emotional origins of the changes to it, they might have made wiser choices.

Effective decision-making requires both reason and intuition, which shouldn’t be surprising since our brains house both our intellect and our emotions. Neuroscience has shown us that different brain regions are active during different decision-making approaches. Thus, it seems perfectly reasonable to expect both emotions and logic to be involved when we choose to commit to a specific course of action or even persist in a prior commitment. Unfortunately, recognizing the influence of both emotions and logic can be challenging, especially when we are in the thick of things. This failure to appreciate the role both emotions and logic play in a decision often gets us into commitment troubles.

Chapter 3

Escalation of Commitment: The Essence of Going Too Far

Robert Campeau didn’t grow up wealthy. Alas, his father’s meager salary didn’t prevent him from spending. Perhaps that was where Robert first acquired his taste for status and material possessions. As luck would have it, the French Canadian would eventually hit it big. He amassed tremendous wealth as a real estate mogul in Toronto. That, along with a flamboyant personality, allowed Robert Campeau to achieve recognition in lofty social and business circles.

Given his success in real estate, one could assume that Campeau had great strategic sense when it came to making deals, but this strategic sense failed when he branched out into other areas. His most notable (and most catastrophic) failure involved his 1980s takeover of two of the largest retail department store chains in North America. Despite owning a small portion of Allied Stores and Federated Department Stores, Campeau set out to complete leverage buyouts of both clothing retailers.

The most notable acquisition was Federated’s flagship, Bloomingdales, for which Campeau paid more than $600 million above the store’s worth. In fact, the entire purchase value of both Allied and Federated was an estimated $11 billion.

Campeau was somehow able to convince lenders that his plan would work, and the magnitude of the deal gained widespread attention. The acquisitions made Campeau one of the most recognized men in North America, but it also shone a dazzling spotlight on his poor judgment and inflated ego.

Within a year, the retailers were losing more than $100 million per quarter and unable to make debt payments or even cover expenses. Campeau had taken 250 profitable department stores and turned them into failures. When junk bond debts came due, it was too late to turn back. Ultimately, Campeau was forced to file for bankruptcy and was disgraced in the process. Media reports claimed that Campeau was so emotionally invested in his pursuits and his social status that he could no longer make a rational decision about what was the best course of action.[7]

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Robert Campeau clearly made some epically poor decisions when it came to matters of business. What’s remarkable is his incessant drive to persevere despite glaring indications that moving forward with the deals was a truly bad idea. In fact, the same could be said of the lenders who decided to fund Campeau’s endeavors.

Stories like Campeau’s are all too common. In instances like this, the most logical course would be to step back, reassess, and shift gears, but Campeau did what many of us do—he remained committed to the same path. What is it that causes us to hold too tight to the pursuit of a goal? Why do we fail to adapt to changing circumstances? Why do we find it so difficult to admit we goofed?

Researchers and experts have a term for this type of irrational behavior. As you may have guessed by now, that term is escalation of commitment, or EoC for short. By definition, EoC describes any situation where resources continue to be invested despite clear evidence that this investment will not yield success. The decision is made (and remade) to invest more and more, while losses and failures mount.

Let’s consider a couple of common examples. Many of us have been in a relationship that we knew was going nowhere. At some point, the telltale signs become too hard to ignore, and deep down we realize our efforts to make the relationship work are futile. Despite such evidence, we often persist, investing more time and energy, and even tolerating increased emotional stress and pain. This is a perfect example of an EoC behavior as we insist on escalating our commitment to the relationship when everything suggests we should run far away.

Simply put, we feel we have invested too much in the relationship to leave it.

Most project managers are aware of the tendency to persist in a project even when it is increasingly over budget and delayed. This becomes truer as the project nears its conclusion and the pressure to complete it overrides the ability to objectively assess the situation. In fact, EoC is a major reason why many projects end up draining a company’s resources, sometimes irreparably.

Please note, not all increasing levels of commitment or investment are ill-advised. There are many situations in which escalation of investment is necessary in order to achieve a positive result, but there is a key difference between these types of situations and EoC scenarios.

•  In instances where investments are beneficial, objective evidence supports the ongoing commitment; signs indicate that a greater investment will allow the desired outcome.

•  In contrast, EoC refers to situations where such commitments lack rational support, where evidence shows that further investment is not justified because the value it provides is simply not worth that outlay.

Simply put, EoC is always undesirable.

So, how can we gain a better perspective of these underlying motivations and tendencies, and become adept at avoiding EoC behaviors, thus improving our decision-making?

Recognizing the Irrational behind the Rational

The year was 1961. After a long seven years, both the British Petroleum company and Texas oilman Bunker Nelson Hunt had made the decision to quit drilling for oil in the Libyan desert. Despite a tremendous investment in money and effort, the companies had little to show for their efforts. Operatives in the field were told to cease all drilling operations and to make plans to return home, but the rig superintendent chose not to follow instructions. Instead, he drilled an additional three meters deeper and discovered one of the world’s largest oil fields. It’s doubtful he was reprimanded for his insubordination.[8]

The persistence of the rig superintendent yielded an atypical result, demonstrating that, occasionally, an escalation of a commitment can produce the results one has hoped for all along. After all, a small number of people playing state lotteries do win. The bigger question involves why the rig superintendent chose to persist in his efforts to discover oil. After seven years of limited success, reason was not on his side. Despite this knowledge and instructions to the contrary, he decided to escalate his commitment and keep drilling.

What could have motivated a decision that defied logic and experience? The explanation clearly involves our nonrational side.

While emotional biases and intuition have long been recognized as affecting our decisions, most of the research in this field has evolved over the last three or four decades. The study of the nonrational aspects of decision-making is relatively new, but a number of theories have evolved that offer important insights into the significant role these factors play, especially when the stakes are high. It’s important for us to understand them.

One notable example of EoC in a nonbusiness setting was described by psychologists Carol Tavris and Elliot Aronson in a case where law enforcement continued to insist on guilt despite strong evidence of innocence. The case involved five Black Harlem teens accused of brutally raping a woman in Central Park—the so-called Central Park Five. DNA evidence found at the scene did not match any of the teens, yet a confession was forced from them, and they were all incarcerated. Thirteen years later, an imprisoned felon admitted to the crime. His DNA matched the evidence collected. Still, long after the young men’s release, the lead prosecutor in the case continued to publicly insist on their guilt.[9]

In cases like the Central Park Five, officers and prosecutors can become so emotionally engaged that it affects their judgment. Despite being sworn to uphold justice and objectively examine evidence, these individuals can become personally invested in the decisions they have made. This emotional investment then affects all subsequent decisions, regardless of new evidence provided. Here, nonrational factors blind people to the rational.

Let’s consider another situation in which EoC behaviors can impact major decisions: relationships between employers and employees. Employers invest in employees through training and skill development in the expectation that they will become increasingly adept, efficient company assets. In some cases, such investments will clearly be failing to produce the desired outcomes. Yet, instead of choosing to move the employee to another area or let them go, the employer persists (and sometimes escalates) their commitment to that employee.

Though not the most average of work environments, the National Basketball Association (NBA) also consists of employers and employees. In a revealing study in Administrative Science Quarterly, B. M. Staw and H. Hoang examined whether the investments a team made in a player had any bearing on their