Why following the advice “under-promise and over-deliver” is bad for business

It’s known as ‘sandbagging’, and it’s when you reduce expectations, knowing very well that you will exceed them.

Companies do it to look better on paper; when they surpass expected results, they appear financially healthier.

And individuals avoid setting realistic expectations because they don’t want to appear as average performers and want to get better reviews.

Sandbagging happens when people are afraid to take risks. 

So, all the time. 

But it’s worse when our incentives and social standing at work are at risk.

We sandbag an ambitious project by setting safer goals or by negotiating down expectations.

It’s a bad practice because sandbagging makes sure that over-delivery never happens.

A McKinsey study found that 78% of business strategies over ten years only keep you at pace with your competitors.

The 1 in 8 businesses that grow exponentially do things differently.

But different is risky.

People sandbag because of what Daniel Kahneman calls outcome bias: judging the performance of others solely based on the outcome.

We consistently overlook the odds of success and the quality of decision-making at the start of the process.

Outcome bias is why doctors routinely refer patients to specialists and suggest safer treatments over recommending riskier alternatives.

Even when taking that risk can improve the odds of success.

Doctors know a jury is likely to overlook the odds of success and the quality of the decision if they get tried for malpractice.

Reward the effort behind riskier goals by keeping track of the odds of success.

When you know that the odds of increasing your sales by €5 million in the next six months are only 50%, don’t overlook that fact and convince yourself that people only need to work harder to raise that likelihood.

Write down the odds of success for your ambitious goals.

This small gesture will help you remember that hitting that goal will take extra effort. 

It will help you decide when to direct more resources to support that project and prioritise productivity gains that increase your odds of success.

The other benefit is making it clear to the people responsible for the goal that you won’t unfairly judge their effort purely based on whether they hit the goal or not.

People putting in the extra effort will feel safer knowing that their effort will be rewarded even if they reach 80-90% of the goal.

It’s far more important to reward people who take risks and stick their necks out than those who hit 100% of their goals at 100% odds.

Don’t reward dumb luck; reward people who go the extra mile. 

Because only the latter will take you to new heights.

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