The Fallacy of ‘Under-Promise & Over-Deliver’

AKA: Shoot Yourself in the Foot & Wander Around a Salt Mine

By Vasco Ferreira Pinto (Analyst at OmniTek Consulting)

Well these are salt pans rather than mines, but you get the point.

Business aphorisms are ubiquitous, fun (for me at least) and generally harmless, even to wide-eyed analysts like myself. Harmless of course, until you believe them.

Under-Promise & Over-Deliver (UPOD) makes just enough sense that you might believe it but hopefully by the end of this quick read its flaws will be all over the kitchen floor (or wherever you’re reading this).

In defense:

UPOD has a good idea behind it, an idea that is known to be true. People/Clients hate being disappointed. Disappointment is a two sided game set by expectations and results.

Usually:

Expectations > Results = Disappointment

&

Expectations < Results = No Disappointment

Not all the variables in the above equations were created equally: A good movie can get ruined by the expectation that it was going to be better than ‘The Shawshank Redemption’. A pinch to your arm can be great if you were expecting a punch to the face. So summarily, expectations have a (surprisingly) bigger role than results. Results though are not valueless and they can reach critical levels at which they determine satisfaction: ‘Whiplash’ is a great movie even if it isn’t Shawshank and getting kicked in the shins is bad even if you expected a whooping.

Let me set something up and drop a name before I prosecute UPOD. Daniel Kahneman is a Nobel Prize winner in Economics and a master of the brain’s inefficiencies. In Thinking Fast and Slow, he identifies and explains a cognitive bias called anchoring. The best way to explain it is probably not to paraphrase a NYT best seller/Nobel Laureate, so I’ll humbly let Kahneman do it himself in a minute long youtube video:

https://www.youtube.com/watch?v=HefjkqKCVpo

To summarize and loop in the lazy folks that didn’t watch the clip: Anchoring is a subconscious bias we have that makes us under-adjust an estimate after we are presented with an over or under-estimation (even if the estimates we are primed with are ludicrously high or low).

Anchoring suggests that even to a high degree under-promising should work in your favor since it would lead the people you are pitching, to expect less leading to higher ease in over-delivering.

So, tell your client you’ll deliver a good product on a reasonable (but comfortable) deadline and deliver a great product before that deadline! Problem solved, go do business, thanks for reading!

Not so fast…

In offense:

Over-delivering is not blameless in the UPOD fallacy, it is problematic when it stems from under-promising. For that, it will not make it out of this article unscathed: this study suggests that there is no margin in over-delivery. This doesn’t mean that a customer is not at all happy that you have exceeded expectations; it does mean that your efforts are better spent keeping promises than attempting to top them. To put numbers on it, if 10 ‘effort points’ give you 10 ‘satisfaction points’ from the client, when you are working towards delivering, the same 10 effort points won’t return 10 satisfactions points when you are working beyond what you promised to deliver, they will give you some number < 10. I won’t push the matter much further (for now) because I recognize the level to which above and beyond is embedded into the US business culture but… maybe… the seed has been planted…

Now, to deconstruct our biggest foe. I recognize that when UPOD is used, under-promise is meant as tempering expectations. I know that the expression is not meant to have you go into a meeting and say a project will take you a year when you know it shouldn’t take you more than a month. It merely means that you should err on the side of caution and humbly promise a little less than what you expect to deliver. A flawed strategy, for three main reasons.

1. In a scenario where you are competing with alternatives to your services (essentially always), under-promising puts you at risk of being outpitched by a group that promises more (say exactly what they can deliver, assuming similar capabilities).
2. Clients often recognize an under-promise and if they do they adjust their expectations upward, vocally or not, possibly to a level over what you can deliver, which leads to disappointment. Wait, remember the Nobel Laureate on youtube and anchoring? Wouldn’t that justify UP? You’d promise a really low number and that would affect the expectations of the clients negatively, even if they recognized you were selling yourself short, they’d still expect less than their natural/unbiased expectation. Well this might be true in a scenario where the client has little knowledge of the field but the issue with anchoring is that it loses strength as your ‘guinea pig’ gains knowledge. If you try to tell a BMW engineer that your 2008 3 series is worth $250K he’s not likely to be affected by your anchoring attempt, or to buy your car. In the current state where clients are far from clueless (especially in B2B service scenarios) and information on near everything is ubiquitous, anchoring might get pushed out of business decisions, making your under-promise not just recognizable but stale.
3. By definition, if you under-promise, your full effort will lead to over-delivery, which as we know from the linked article, has a lower return than just delivery. Let me expand with a full numeric example

Assume: Rate of return for delivering is 100%

Rate of return for over-delivering 50%

When under-promising:

Promise: 8

Deliver: 10

Total Rate of Return = (8*100%)+(2*50%)=9

When promising accurately:

Promise: 10

Deliver: 10

Total Rate of Return= (10*100%)=10

So the same level of effort (that which is required to deliver 10) leads to higher returns by simply refusing to under-promise.

I’ll wrap it up for you.

The vision of UPOD is enticing:

You humbly promise something you can definitely deliver, then you work your sox off and deliver something that leaves the client flabbergasted by your brilliance and effort. They would have been ok with what you said you’d deliver but this is so much better, they are at a loss for words and begging you to work their next project.

The reality of UPOD… not so much, considering the alternative:

• You humbly promised something you could definitely deliver; you were immediately out-pitched by Jennie, the alternative, who (assuming similar skill level) offered more by simply giving her best effort promise
• Jennie avoided the risk of annoying your prospective client with an overt under-promise and has the comfort of knowing that the client expects exactly what she promised
• Jennie promised what she knew she could deliver (maybe even a bit more) then, worked her sox off to the same extent you did to deliver what she promised. Difference is she invested her efforts in an activity that pays a higher return than over-delivering, just delivering.

In sum, the economics of UPOD are just not rational and in the increasingly common case where your client is knowledgeable, the strategy may backfire completely. Best case scenario UPOD is inefficient with your time and effort, worst case scenario it prevents you from getting the business, in the first place or in the future.

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These thoughts are my own and don’t necessarily align with those of OmniTek Consulting