You Can Avoid These 3 Terrible Decision Rules, Too.

Carol Travis and Elliot Aronson have written a throughly entertaining and accessible book about self-justification, Mistakes Were Made (But Not by Me): Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts.  We can all profit from their science.

From the introduction, "the Social Brain is wired for Self-justification.

When we make mistakes, we must calm the cognitive dissonance that jars our feelings of self-worth.

And so we create fictions that absolve us of responsibility, restoring our belief that we are smart, moral, and right --a belief that often keeps us on a course that is dumb, immoral, and wrong."

Here are some of their observations, which are relevant to both prospective franchise operators and sales.

1. On the value of Franchisee Testimonials.

"The more costly a decision, in terms of time, money, and inconvenience, and the more irrevocable its consequences, the greater the dissonance and the greater need to reduce it by overemphasizing the good things about the choice made."

If you are looking to purchase a franchise, then don't look to the existing franchisees for information - if they are doing poorly, their brains will engage in self-deception trying to convince you of how good their choice was.

Instead, you should get in touch with other individual making the same pre-purchase decision - individuals who have not been to discovery day or who have been in contact with the franchisor.

2. On being Confident:

"The weakness of the relationship between accuracy and confidence is one of the best-documented phenomena is the 100-year history of eyewitness memory research."

I would remove the qualifier "eyewitness memory research."

When reasoning about decisions, we have to make room for the possibility that even once we have chosen, we may be wrong.

For some major decisions, buying a house or car, if we are wrong we can sometimes sell and recover a large part of our investment. But for franchises, selling a money losing pit is not a realistic option.

Therefore, you have to plan for when your decision turns out wrong. What will you do?  Think about that now.

3. On Learning from your Mistakes.

"One lamentable consequence of the belief that mistakes equal stupidity is that when people make a mistake, they don't learn from it. The throw good money after bad, and the con artists are right there to catch it."

If you and I cannot admit to our mistakes, and constantly engage in self-justification to preserve our sense of how clever we are, then we can never learn anything.

We will simple repeat our mistakes in a new way.

While most franchise systems don't have a proven business method, franchisors typically berate the money losing franchisee as "not following the business model". They are made to feel stupid. Some then act stupid.

Others, instead of owning up to the mistake of the initial investment, mindlessly but energetically throw themselves into "following the business model".

The better approach is to question the facts upon which the business model rested. Perhaps you have found a counter-example to the business model. Together, you can change and improve the business model.