Aptly termed the ‘sunk cost fallacy’, this sneaky cognitive bias drives many well-meaning school executives to continue investing in things long after all signs indicate they are ineffective.
Dr Simon Breakspear is keen to highlight the psychological peculiarity, and says there’s more at stake for school leaders than wasted resources when it is allowed to drive decision-making.
“[With] the sunk cost fallacy, because we feel that we’ve invested time and money, and maybe some of our political capital as a leader of the school, we’ve probably got a higher tendency to say … ‘we should carry on into the next six months’.
“I’ve seen schools get into year two or year three of a program, but being aware from the outset that it’s really not all that impactful,” the speaker, author and researcher says.
The curious temptation to stick with underperforming PD programs for staff, various wellbeing initiatives or other school improvement agendas is traced and unpacked in the psychological literature, Breakspear says.
It was during his research on the ‘pruning principle’ – which is ‘all about strategic subtraction’ in empowering school leadership teams – that Breakspear came up against a gnarly question.
Why is it that leadership teams know they are overloaded and need to discard something, yet struggle to make this move?
“As I studied the blocks that might explain why very capable people were finding subtraction so much more difficult than addition, I actually did turn to the psychological literature there.
“And I could see that the cost fallacy could be a really good reason why leaders struggle with actually going about pruning or strategic subtraction, even though on the front end that the concept really resonates and they know they need it.”
One area that seems particularly prone to this harmful line of thinking lies in external professional learning consultants and programs, the expert adds.
“A school might have made a commitment, in good faith, that they want to go on a journey, maybe a multi-year, two- or three-year journey with regards to working with a team to improve an area of teaching practice, but perhaps six months in they’re realising, ‘well, this isn’t so much of a good fit for us’.
The energy from staff might have flatlined. Perhaps positive shifts in practice are yet to be seen. Now would be the time to cut your losses and make the decisive call, Breakspear advises.
“The best decision there is to say, ‘well, the six months’ worth of money we’ve spent on this is not a factor that we should really put at the top of the list when we think about what we should do with our next six months or our next year and a half or so of professional learning’.
“We should say, ‘actually, let’s cut the contract short. We’ve learnt our lesson’.”
If there’s one message that Breakspear wants to hit home, it’s this: ”Sometimes you have to spend time and money to learn valuable lessons.
“The way that you honour that time and money spent is to learn really quickly and then adjust your future action as opposed to thinking that continuing with that program is a way to honour the money and time spent.”
And in the complex realm of leading schools, mistakes and dead-ends are largely inevitable, he suggests.
“I think if we can be kind to ourselves and say ‘we’re trying to do complex work, we couldn’t know all of this from the outset’, but once we do know better, we need to change our course of action.
“As opposed to – just because of that sense of pride or an emotional response to potential perceived loss – put more time and money against things that aren’t really solving the problem that we’re looking to have an impact on.”
Acting against the sunk cost fallacy can be a real trust building opportunity for school leaders, the expert says.
Of course, your staff will know acutely well when something is not working out, Breakspear notes.
Remember, everyone can tell when something is being rolled out soley because there was a commitment to it.
Here the sunk cost fallacy will cost leadership more than just resources, he says.
“One of the most important things in school improvement is a sense of collective upward momentum – and staff are pretty savvy.
“[Continuing to roll out something that’s ineffective] brings a growing sense of frustration, perhaps resentment.
“And it means that the next time that leader seeks to lead change, potentially on an area in which they do have a workable solution, the staff are in a worse position to begin that change journey.”
Growing rates of scepticism, cynicism and change fatigue are only to be expected when the sunk cost fallacy visibly plays out in schools, Breakspear concludes.
Clear, strategic communication is essential when opting to discard any initiative, the expert says.
“So much of what we’re doing in schools is about bringing the common room with us … and so trying to steward that change with really clear communication is a good way for people not to feel as though they have had any sense of waste, but actually there’s been fast collective learning.”
Acting against the sunk cost fallacy can be a real trust building opportunity for school leaders, Breakspear points out.
“Particularly if people have given feedback or given their insights about [an initiative] not working or not landing, then actually it can be a trust building experience for that leader, as they actually say, ‘we’ve heard from you, we’ve looked at the data, we understand, now we’re responding to your feedback’.
“And I think that’s a really important piece to do.”
When it comes to implementing a wider school improvement agenda, Breakspear advises leaders to start with ‘smaller experiments’.
“This means that when we’re trying to solve a complex problem that might involve a few dead ends or the need for course correction, it means we can do that when we’re just working with a smaller group.”
Another strategy is to frame a new commitment as a learning experience with staff at the outset, Breakspear says.
“[You might say], ‘our first six months of this is an experimental time, we’re trying to learn about how to make it work and if it’s a good fit with us’.
“This means that at the end of that experiment period, if you do decide to take another direction, there’s an expectation actually from the group that that whole point was to learn about it, and that quite often it may well be that at the end of an experimental period we might rethink or take another direction.
“This is much less risky for the leader than if they go to full rollout and try to get buy-in from everyone straight away.
“And of course, it’s much more difficult than to say, ‘hey, we’re halting this, we’re heading in another direction’,” he says.
It pays to remember, Breakspear warns, that just knowing about the sunk cost fallacy is not enough to change our behaviour.
Behavioural economists have brought this hard truth to light, he says.
“So I think it’s important for teams to talk about this and then even have it as a reoccurring question in team meetings or in review meetings, ‘where might we be continuing something because we’re falling for the sunk cost fallacy?
“There’s a need to not just know about it once, but to regularly bring it up as a team and to encourage the safety for other members of the team to ask, ‘are we doing this because we feel like it’s the best path for impact? Or are we doing this because we feel emotionally connected to something that we’ve over invested in, in the past?’”
