Credible commitments and work-life balance

Costly signals

In 1519 explorer Hernando Cortés landed on the eastern coast of present-day Mexico with the mission of continuing the Spanish conquest of the empires covering Central America. The task was daunting given his small crew, the unfamiliar terrain, and natives who understandably weren’t so keen on being colonized. Discontent and thoughts of outright mutiny brewed among his soldiers. In response he ordered that the ships on which they arrived be scuttled, ensuring that retreat to safety would be impossible for anyone harboring second thoughts.

Now all else being equal, coming out of battle with a victory while keeping your fleet of expensive boats afloat is preferable to the alternative of contemplating how to sail back across the Gulf of Mexico once you’re done conquering. Yet this wasteful act was actually productive, because it sent the unmistakable signal to Cortés’s men that retreat would not be an option. They had to fight and win or else be destroyed. 

As a consequence of the Los Angeles teachers’ union’s recent strike the school district lost roughly $125 million in funding, money that could ultimately have been shared by both parties had they only reached their agreement earlier. Yet both the union and the district were willing to disrupt operations and burn massive resources along the way to show how serious they were about their bargaining positions.

Economists call this act of sinking your ships or going on strike a credible commitment, in which you demonstrate via a costly or irrevocable action what your intentions are. The self-inflicted pain makes it clear to others that you’re serious, and will act accordingly.

Signaling in the workplace

This behavior isn’t confined to crisis situations. In modern organizations the blurring of boundaries between work and the rest of life follows a similar, apparently wasteful principle. Employees invest huge expenditures of effort even when the direct benefits are minimal. They juggle overlapping meetings, laboriously rework documents that will go unread to influence decisions that have already been made, or allow vacations to become extensions of the workplace, all while tending to the continuous alerts of work messages.1 These micro-commitments are a way of sacrificing to indirectly signal allegiance to an organization. Just as Cortés needed to prove to his men the seriousness of his intent, the average worker makes costly gestures to prove she is committed to the cause.

This is unfortunately necessary because most organizations can’t effectively value what employees do.

That assessment may sound harsh, but follow the thread: how exactly does a specific action create value for a company? Sure, joining conference calls and generating monthly reports have some connection to the goals of an organization, but how is this measured exactly? Unless you’re in an eat-what-you-kill environment (e.g., stock trading, real estate brokering, sales) or your output is directly observable (like a factory worker, or a surgeon) the connection between your actions and the bottom line is often indirect and tenuous, confounded by multiple factors both in and out of your control.

Given this fact, many large organizations resort to proxies to gauge an employee’s commitment. How much time are you willing to sacrifice? How much of your finite energy are you willing to devote to the activities of a company? There may not yet be a good way to equate this churning activity to results, but until then this remains one of the plainest ways to show your dedication.2 For many white-collar workers, how managers or clients feel about them is the largest determinant of success. The appearance of diligence is a good way to generate those feelings.

Unfortunately, as the stakes grow, such commitment is generally demonstrated through sacrifice of what is increasingly precious: hobbies, health, friendships, family relationships, spiritual well-being. Trading off these important elements of life shows how serious you are about doing whatever is asked of you.

Professional services firms are especially prone to this trap, particularly for those at more junior levels. Despite much hand-wringing over the imbalance they bring to employees’ lives, tangible change is slow in coming; giving your time is one of the easiest ways to show commitment in the race to the top. After all, it is your only nonrenewable resource.3

Making it better

Recent changes in the world of work might help shift this calculus. Many workers are no longer tethered to an office, subject to continuous oversight or the need to keep up appearances.4 Technology also exists to monitor every email you send, track your meetings or badge swipes, and find out more precisely how your contributions add to the mission of the organization.5 This can risk dehumanizing employees in a neo-Taylorist dystopia, but it could also be a means of liberating people to focus on the right things, showing their worth without having to burn themselves out in exchange. There will be less need to suggest value through costly signaling when true value is plainly seen.

In the meantime, there are specific things that leaders can do to make showing commitment lest costly.

First, it’s much easier as a leader to just require everyone to be constantly available, responding to your whims with no concern for the burdens these create. It is much harder to deliberately and thoughtfully think through the path that your organization needs to take, and eliminate those actions that don’t help get you there. As a leader, do the hard work of figuring out what activity is actually valuable, and align your systems to start focusing on that.

Second, work to address the more fundamental elements of culture that create the need for these behaviors in the first place. Those who found success in your organization did so by following certain rules, and they will default to them when it’s their turn for rule-making. Work to develop a culture that changes the expected commitment from vague and costly things, like face time or responsiveness at midnight, to specific and valuable things. What those are will vary depending on your mission, but tying it to an output will help minimize waste.

Third, default to trust. Adopting an adversarial posture virtually guarantees that those around you will need to act in costly ways to prove their true intentions, and vice versa. Starting from a position of good faith allows you to bypass that step. This requires that those you partner with are fundamentally trustworthy (loyal soldiers, for a Cortés) and are committed to the mission above all (effective education, as with teachers and management).

Taken together, the investments of resources and time you require of your people can change:

Significant investment in one thing at the expense of the other valuable parts of life will never go away—that’s the unavoidable nature of undertaking complex and worthy tasks. You will always have to make trade-offs.6 But finding more efficient ways to signal commitment could just make life a little better for all involved, employees and organizations alike.

References

The concept of credible commitment comes from Thinking Strategically by Avinash K. Dixit and Barry Nalebuff, a book from freshman economics class that holds up pretty well.

News reports indicate that Los Angeles lost $125 million in state funding, not including savings from foregone teacher pay.

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