We help people understand their compensation plans and policies and procedures.  Our main questions are:

We spend several hours working with each person, and they often discover some scary stuff.  Many say they would never have joined that company if they had read their contract carefully or had understood the compensation plan.

And yet, after all that …

Case 1:

We’ve been working with Dan for three years.  His contract contains all the usual ‘ongoing’ gotcha clauses and one of the worst we’ve ever seen:

This Agreement may be terminated at any time by either party with or without any reason or cause. This Agreement shall also automatically terminate in the event of your death.

No vacation.  No retiring.  Nothing to leave for his wife and kids.  After six years with his company, Dan is still earning no residual income, does not understand his comp plan, and is frustrated because no one will join him to work as hard as he does. His company can terminate him at any time without warning, and will send no checks to his family after his death.

Dan’s main aim is to provide a legacy income for his wife and kids, but has decided to stick with his company.

Case 2:

Judy was sponsored into a company by her landlord, a pushy red character who cares little about people or team building.  Judy is a caring ‘people person’ who hates the idea of having to become a ‘sponsor monster’ in a company that promotes “Recruit, Recruit, Recruit!” After working together on the comp plan, she agreed that it was a pyramid offering good upfront money but very poor residual income – no incentive to work with anyone she sponsors.

Although she dislikes her sponsor, hates the person she has to become in order to succeed, and knows that she will not be supporting her team, she needs some quick upfront money.  Judy has decided to stick with her company.

Case 3:

Ted has been a business owner for over twenty years and a network marketer for over fifteen years.  He’s been in several companies with varying degrees of success.  Recently he joined a company with a good service but low commissions.  We worked together on the math, and we agreed that he would need about 4000 people on his team to generate a monthly residual check of $10000.  Ted knows that there are companies out there that require only 400.

But he loves the product and says, “If I can’t do it the hard way, I won’t do it at all!”  He has already invested money in the business, and his sponsor and upline are friends.

Ted is well aware that he will be working 10 times harder than he has to, but has chosen to remain with his company.

Case 4:

Deanna has made no headway trying to work several businesses at the same time and so far has sponsored no one.  After reading Success In Ten Steps, she agreed that she should choose just one company and focus her efforts.  We helped her analyze her comp plans and policies and procedures, and she agreed that she should choose a five pillar company and abandon all the companies that were emptying her pockets. Three days later, she announced her decision to keep working with her non-supportive upline, and go after government contracts for her services and products even though she cannot find anyone who has actually landed a government contract.

Deanna is well aware that neither of them has five pillars, but she has decided to remain with both companies.

 

 


We realize that the first rule of understanding human behavior is “Don’t Try!”  However, it still baffles us that people can publicly make decisions that they know are bad for them and their families.

Tom ‘Big Al’ Schreiter has always told us, “People Hate Change!”  It’s slowly starting to sink in.

Recently, we received a timely Point Lookout mailing from ChacoCanyon that helped us understand what’s going on.  Here are some excerpts from “Indicators of Lock-In” …

In group decision-making, lock-in occurs when the group persists in adhering to its chosen course even though superior alternatives exist. This dysfunction can be disastrous for problem-solving organizations … Lock-in is a phenomenon in decision-making in which we observe escalating commitment to a decision of inferior quality …

Escalating commitment is the psychological state in which we continue to support a decision with increasing levels of resources despite its repeated failure to achieve projected results. It’s characterized by an irrational desire not to abandon the decision.

Escalating commitment can be difficult for the committed to recognize, because we cloak the irrationality of the compulsion to continue in a series of rational-sounding explanations:

  • “We almost have it!”
  • “We’re 90% of the way there!”
  • “Our recent breakthrough removes the last obstacle in our path.”
  • “We’ve been under-resourced but we’ll get it with just a bit more effort.”

The ‘Sunk Resources’ argument may arise.  When things aren’t going well, and a growing minority begins to wonder whether we ought to scrap what we have and start over, some inevitably say, “We can’t quit now!  We have too much invested!”  The appropriate reply, “Let’s not throw good money after bad” often doesn’t prevail until there is no more good money left to throw …

When groups fail to adapt to changing situations, they reject or fail to see alternatives to their choices even when those alternatives are clearly superior. Instead, they escalate their commitment to the chosen course.  By escalating commitment, they hope that the eventual outcome will justify to themselves both the choice they are now making and all their past choices as well.

To those outside the group, inflexibility is both an obvious indicator of lock-in and difficult to understand. For seemingly unfathomable reasons, decision makers reject alternatives that seem promising.

Because seeming inflexible or irrational can be damaging to one’s career, groups that adopt inflexible positions do so most often in desperation. They feel beset. They feel that adaptive behavior will make them seem weak, and thereby cause more damage than inflexibility will.

Closure, or exclusion, of alternatives does not present inherent difficulties in achieving high-quality decisions.  However, premature closure of alternatives, or continuing exclusion of alternatives in the face of repeated failure, does threaten decision quality.  When a group enforces or accepts closure of alternatives in the face of failure of its chosen course, lock-in is likely in place.

So there you have it.  No amount of information or logic is going to change someone’s mind if they are locked in.  When someone does not join you in an obviously better venture, don’t get upset.  Just follow Jim Rohn’s advice to discipline your disappointment and say, “Isn’t that interesting?”

Every moment you spend trying to understand someone’s strange decision is a moment you could be spending finding someone who is not locked in.  Move on.

To learn how to appeal to the subconscious, the decision-making part of the brain, listen to Tom ‘Big Al’ Schreiter’s “How to Quickly Build Your Network Marketing Organization.”

Bob and Anna Bassett
519-371-1028
Skype bobbassett
bobandanna@togethertothetop.com

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