Creating a Plan B (and maybe even a C, D, and E) sounds like practical, levelheaded advice. Life happens and success isn’t guaranteed. Who wants to be in a situation without any options? Unfortunately, having a backup plan may backfire.
Research published in the July 2016 issue of Organizational Behavior and Human Decision Processes, however, found that having a backup plan actually hurts your chances of successfully achieving a goal.
Jihae Shin, assistant professor of management and human resources at Wisconsin School of Business, and Katherine L. Milkman, associate professor of operations, information, and decisions at The Wharton School, conducted a series of experiments in which two groups of participants were asked to unscramble sentences. Both groups were told that if they did well on the task, they’d be given a free snack or the chance to leave the study early, but one group was also instructed to brainstorm other ways they could get free food or save time later in the day in case they didn’t perform well. The groups that had backup plans did less well on the task.
“When performance is effort-based, having a backup plan can cause you to put in less effort and demonstrate lower performance,” says Shin.
But why? Shin and Milkman examined two scenarios: Does a backup plan reduce how much you want a goal, or is a backup plan a distraction in your mind?
“We found it was the former,” says Shin. She explains:
A backup plan can make you want to achieve the goal less. It makes you prematurely think that whatever happens is okay. Failure is okay. Making those plans in your mind reduces your motivation, and you don’t try as hard.
If you set a goal that you are motivated to complete, the answer might be ditching Plan B. Corrie Shanahan, CEO of The Beara Group LLC, Washington, D.C.,-based leadership consultants, credits her success to getting rid of her safety net. “When I started my business as a solo consultant, a good friend kept asking me what my backup plan was. I said I didn’t have any. She was horrified,” she says. “My thinking was, ‘I know this is what I want to do. I know I have the expertise. I know there’s a market for it. Now I just have to get moving and make it work.’”
Shanahan says one of her biggest hindrances was a lump sum she received from a former employer that amounted to nine months of living expenses in the first year. “I would have been better off with just three months,” she admits. “Sometimes you want to even reduce your safety net to keep you focused on the goal and get momentum going.”
People who focus on contingency plans never realize the highest potential of what they otherwise would achieve, adds Tony Sarsam, CEO of Ready Pac Foods, manufacturer of convenience fresh foods. “Providing a backup plan would be similar to a sports team saying they can’t bear the thought of losing so they’ll plan for a tie,” he says. “I believe that a company that opens itself up and takes risks will, in the long term, have better growth, be more successful, and will win,” Sarsam explains. “This is what drove my approach three years ago in turning Ready Pac Foods around,” he adds, “aligning the organization against goals to win, with no other option.”
But sometimes options are good, and a study from the University of Zurich found benefits to backup plans.
“A backup plan can later become a simultaneously implemented and complementary means to achieve a goal,” writes study author Christopher Napolitano, a professor of psychology. The backup plan could be a two-pronged attempt to complete a goal, such as creating two streams of revenue in a business.
Because a backup plan is developed but is not initially used, it can provide a ready safety net if one’s first option proves insufficient. In addition, because backup plans are reserved for later use, they may divert fewer resources away from one’s first-choice plan compared with concurrently used means. Finally, a person may resort to a backup plan when using more than one means is not possible or is too costly, thus not allowing concurrent use of multiple means.
Napolitano believes developing backup plans can be akin to having your cake and eating it too: “An attempt to reap the benefits of having multiple means available while also selectively investing one’s finite resources.”
Don’t overlook crisis planning, adds Jayne Heggen, president of Heggen Group LLC, a strategy consulting firm with clients that include Microsoft Store and PayPal.
“Scenario planning provides alternative approaches to support or replace components of an original plan,” she says. “On the other hand, backup plans focus on critical loss events that can cripple key operating components of a company if not the entire organization, such as natural disasters, system failures, security breaches, theft, etc.,” says Heggen. “Ultimately both plan approaches replace the original plan but for incredibly different reasons,” she says.
Shin stresses that their findings only examined goals where performance and success is highly dependent on effort. If the outcome doesn’t depend on effort, making a backup plan might bring benefits that are more significant, such as reducing perceived uncertainty about the future.
While there are potential costs to making a backup plan, it does not mean that people should go through life without ever having them, Shin says. “Explore ways to mitigate these costs–such as being more strategic about when you make a backup plan,” she says. “You might want to wait until you have done everything you can to achieve your primary goal first.”