The Prisoner's Dilemma is one of the most insidious and hardest-to-detect reasons why good decisions fail in implementation — and the SchellingPoint approach to escaping it.
The reorganization was over. A new CxO was in charge and seven VPs now sat at the leadership table. Together, they needed to cut the expense base by millions. To reach the target, all seven had to play their part — cutting costs in their reorganized functions over the next three years. The problem? They were lean before the reorganization. They weren't cutting fat anymore. This would go deep — through muscle and into bone.
And that's when doubts began to creep in. Some thought: "If I make these cuts, what's stopping the CxO from handing my savings to another VP to invest in their promised future savings?" It had happened before. You make the difficult decisions, you deliver, and someone else gets to use your budget for their shiny new project. Why make the sacrifice if someone else gets the reward?
So each VP faced a choice: work hard and make the painful cuts, hoping others do the same — or produce minimal reduction with a compelling excuse for why full cuts weren't possible this year. After all, if everyone is half-hearted, no one VP will be blamed.
The Prisoner's Dilemma in action. One of the hardest-to-detect reasons why good decisions aren't successful decisions. Collaboration and coordinated action don't reach the required level. Well-meaning people pulled in different directions, having to choose between conflicting motivations.
No one wanted to go first. So they waited and watched. At the end of year one: no cost reduction. No tangible progress. The CxO was left holding the same cost basis in one hand and perfectly rational, logical excuses in the other.
Their HR Business Partner suggested the SchellingPoint process — designed to ensure collaborative actions have the assets for success without the liabilities preventing it. In two hours, the process surfaced their Prisoner's Dilemma — along with six other unseen obstacles. They spent six hours designing mitigations for each. They couldn't retrieve the millions lost in year one, but now they had a formula for full collaboration and set themselves up for a successful year two.
You escape a Prisoner's Dilemma by discussing it and making collaboration the best choice. You agree on what cooperation and defection look like. You determine how to incent cooperation and deter defection. And ensure that if anyone defers, there are consequences.
Successful decisions require a foundation decision: whether or not you will identify and mitigate the often ugly negatives in the same conversation where you design a positive, attractive future. Do you want limited local benefit or the collective optimum? The SchellingPoint process enables the latter.
