Oh, how frustrating it is when the brilliant, perfect plan falls apart simply because people won’t follow through on what was supposed to be an efficient process!
But we humans are strange creatures. We rarely follow the most efficient processes. We act in bizarre ways against our own self-interests. We are not rational people.
One example of this phenomenon is the “debt snowball” made famous by Dave Ramsey. Mathematically speaking, the most efficient way to eliminate personal debt is to work down the balance with the highest interest rate first. Dollar-for-dollar, that gives the most return on the investment of paying down debt.
But, as Dave Ramsey says, debt is not a math problem. It’s a psychological one. In his experience, paying off the debt with the smallest balance first brings more success, even if – mathematically – we can prove that it takes longer.
Why is that?
It’s because mathematical formulas don’t have the power to change long-standing behavior. But the feeling of victory in the small win of completely paying off one debt gives staying power to the strategy.
When managers and senior leaders come from an engineering background, we can find it tempting to attach ourselves to the most mathematically persuasive strategy. But long-term success will come from adopting the strategy with the most psychological staying power for your organization.
If you’d like a thinking partner to help you think through your options, let’s talk. Visit stevedwire.com/talk to start the conversation.
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