Nobel Prize-winning economist Daniel Kahneman’s research reveals a sobering truth: fear of failure outweighs the desire for success by a 2:1 margin. For leaders driving change, this presents both a challenge and an opportunity. Leveraging fear of failure to boost the success of change requires a two-pronged attack.
Leverage Loss Aversion:
Instead of solely emphasizing the potential gains of change, focus on the potential losses of inaction. Ask:
- “What will happen if we don’t change?”
- “Will we lose market share to competitors?”
- “Will we fail to attract and retain top talent?”
- “Will customer satisfaction decline?”
- “Will we become irrelevant by missing out on emerging trends?”
This “loss aversion” framework is a powerful motivator.
Reduce the Fear of Failure:
- Cultivate a Learning Culture: Frame failure as a valuable learning experience. Encourage experimentation and view setbacks as opportunities for growth.
- Provide the Necessary Support: Equip teams with the tools, training, and resources they need to succeed.
By addressing fear of failure, leaders can unlock the full potential of their teams and drive successful organisational change.
Leveraging fear of failure to boost the success of change.
In the words of Prof Daniel Kahneman:
“People are very loss averse and very optimistic. They work against each other. People, because they are optimistic, they don’t realize how bad the odds are.”
As Kahneman’s research on loss aversion has shown, we feel losses more acutely than gains.
“Our estimate in many situations is 2 to 1,” he said.
Yet we tend to overestimate our chances of success, especially during the planning phase. And then whatever the outcome, hindsight is 20/20: Why things did or didn’t work out is always obvious after the fact.
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