Even the non-binding pre-commitment of an opt out business program involves ethical trade-offs. Pre-commitment works, people stick with default options perhaps because they really preferred that option, perhaps because of their own inertia, or perhaps because the default establishes a new social or business norm.
Think of pre-commitment as a business tool
So changing the organ donation program from opt in to opt out changes that programs mistakes. An opt in program misses people who really prefer to participate but haven’t enrolled while an opt out program includes people who would rather not participate but haven’t withdrawn. You should think how this works for an entrepreneur, or how this helps one advance a career, but this is what research tells us.
For organ donation this trade off seems justified: almost everyone benefits from the move to an opt out program. But, it isn’t hard to imagine a circumstance in which a pre-commitment strategy might not be so benign, say a dubious investment vehicle. There may be cases where many people end up, by default, making decisions against their preferences. And, to be honest, this sort of consumer decision and your business.
So I want you to think of pre-commitment as a tool. In fact it’s one of the two most effective tools for shaping our decisions but like any tool it can be applied toward a variety of purposes and its very effectiveness means that we should be circumspect in its use. So, we can easily use pre-commitment strategies in our everyday lives and as an entrepreneur, and they don’t have to be as extreme as lashing ourselves to a mast or cutting up our credit cards.
Most of the time we use pre-commitment to avoid temptation, for which it is very effective. And, unhealthy temptations are in our careers also. It seems an opportunity but it’s just something different. It seems good business stream, and it proves just a fad. Indeed the best approach to managing temptation is to avoid it in the first place. Don’t trust your future self to make good decisions, it’ll be just as hard to skip dessert tomorrow as it is today.
Help out your future success by pre-committing
Help out your future self by pre-committing, if you rarely have money at the end of each pay period to invest for the long term force yourself to save money by an automatic payroll deduction, that’s more likely to be successful than trusting in your future willpower and avoid empty commitments. You thrive and you can have your try as an entrepreneur after retirement.
Just making a resolution isn’t enough in small steps toward a large goal can backfire. Make small commitments that are readily managed and make them credible you’re better off if there are specific outcomes that depend on meeting your goals. We can also use pre-commitment to improve our lives and our success by giving into temptation is stranger that may seem.
Throughout this article I’ve emphasized the idea of making good decisions and I discussed many examples where people fail to save for their future or they focused too much on an immediate reward, but sometimes we need to live a little some indulgence add spice to an arduous entrepreneur’s life.
Suppose that I’ve offered you a choice between $200 in cash in the gift certificate for $200 to a fancy restaurant in your town what would you choose? When asked that sort of question about 1/4 people prefer the gift certificate. This seems like a mistake because cash is more flexible.
Avoid unwanted career temptations
You could take your $200 in exchange for that same gift certificate or for anything else you could imagine and even more people choose a gift certificate or some similar luxury item when it is delayed farther in the future or when there is uncertainty, like when they register for a prize in a raffle drawing. This doesn’t make sense. Why would people voluntarily give up the flexibility of cash for a very specific sort of luxury good?
Well, we can find the answer just by asking them. Of the people who choose the luxury good nearly everyone reports that they wanted to force themselves to indulge. They purposely limited their future choices so that they will have the night out at the fancy restaurant rather than devoting the money to something more prosaic.
We know we’ll enjoy a rare luxury so we give up flexibility in decision-making we bind ourselves to a single desirable article of action and will have a memorable experience, something with value far beyond over giving up. Think of pre-commitment as a tool to help plan and balance our lives, both to avoid unwanted temptations and to seek out desirable business experiences.