Fuqua Research on Why We Repeat Mistakes - Like Re-Submitting Flawed B-School Applications

It’s long been conventional wisdom that people will stick to a non-productive course of action because they are reluctant to walk away from a project they have already invested time and resources in. In other words, a gambler on a losing streak will keep making bets not so much because he rationally believes that his luck is about to change but because he hates to admit having lost his previous wagers.

Two researchers from the Fuqua School of Business have proposed a new twist to that theory – and it’s one of potential benefit to business school re-applicants.

Fuqua professors Bill Boulding and Rick Staelin, together with co-author Eyal Biyalogorsky of the University of California at Davis, argue that failure to absorb negative feedback is often the reason why managers resist proposals for change. In other words, people repeat mistakes because they either cannot or will not listen to bad news.

The researchers conducted an experiment in which 142 MBA and EMBA students were asked to read a case study about a new product. Some participants were given market research that indicated the product would be successful, and others were given research that said it would fail. Only some of the participants were asked to make a decision about whether to launch the product.

The researchers then presented students who chose to launch the product with reports showing that the item had fared poorly during its first two years on the market. The same material was shown to a control group of participants who had not been asked to make a decision about the product launch. 52 per cent of both groups of participants – including those who had no psychological investment in a previous decision to launch the product – opted to continue production despite the negative reports.

What happened? The professors believe that participants had developed positive feelings about the product during the first part of the experiment, and that those feelings led them to discount or ignore subsequent information that contradicted their favorable impressions. “People interpret negative feedback based on their prior beliefs about the worthiness of a product or project whether or not they are personally invested in that project’s success,” Prof. Boulding said in a Duke University press release. “People fall into the trap of not acknowledging the veracity of new, negative information when it goes against their previously held positive beliefs about that project.”

A b-school applicant who gets dinged is in a situation similar to that of a manager whose product line has failed. You invested a lot of time and toil in your applications and – let’s face it – you thought it was great. A rejection letter, however, is about as clear a piece of negative feedback as anyone can get.

A remarkable number of re-applicants do the same thing that the 52 per cent of participants in the Fuqua professors’ study did: they stay the course. They re-apply with an application that is essentially identical to the one that was rejected. They might have a better GMAT score or list some additional work experience or an additional community activity, but the essence of their application is unchanged from the previous year.

In some cases (probably not very many), this approach works. It can happen that someone really was on the brink of being accepted, but something like a low quant score on the GMAT kept the admissions committee from extending an admissions offer.

More often, however, people are dinged for more complex reasons. One of the reasons why many schools have mixed feelings about giving feedback on unsuccessful applications is that it can be very difficult to articulate exactly what led to a denial. It’s often not because of just one thing. Admissions committees read applications as a single package, not as a collection of parts. The kinds of things that bother them are often found throughout the application, not just in one particular component.

One problem that re-applicants face is that it is difficult for anyone to read something like a b-school application with the objectivity that an admissions committee member reads it with. You’re too close, psychologically, to the application you prepared.

That's why it’s helpful for re-applicants to do what a product manager should do when faced with unwelcome feedback on a product they feel attached to: get an outside view, and listen to what that person has to say as if they’re talking about something totally new and unknown. That’s the surest way of guaranteeing that you’re not sabotaging your re-application by an ingrained bias against negative feedback on a project you feel strongly about – i.e., you and your future.

Source: “Research Provides New Insights Into Managers' Unwillingness to Cancel Unsuccessful Projects” – press release, Duke University (Durham, NC), May 31, 2006