Planning & personality
How do others see you? Do they see you as someone who likes a planned or orderly way of life, or someone who prefers flexibility and spontaneity?
We are all different, and how we appear outwardly may not be a reflection of our inner self. There are various different self-assessment tools for personality traits, with one of the most widely acceptable being the Big Five, also known as the five factor model. The five factors are, openness to experience, conscientiousness, extraversion, agreeableness and neuroticism. Of these conscientiousness is the one most overtly linked to our individual planning orientation. It measures our tendency to be organised and dependable, aim for achievement and a preference to plan rather than spontaneous and flexible behaviour. The downside of high conscientiousness can be seen as stubbornness or obsessiveness, whilst low conscientiousness can be perceived as being sloppy or unreliable.
As well as individual personality traits there are some phenomena that are more universal. In economics and decision theory, Loss aversion refers to people’s tendency to prefer avoiding losses to acquiring equivalent gains: it is worse to lose one’s jacket than to find one. Some studies even suggest that it is twice as powerful psychologically to lose rather than to gain. This leads to loss aversion, as an individual who loses £100 will lose more satisfaction than one who gains £100. Such thinking was popularised by Daniel Kahneman in his best-selling 2011 book ‘Thinking Fast and Slow’ which summarised decades of his research into behavioural economics with Amos Tversky.
Myopic loss aversion builds on the concept of loss aversion. It is the combination of a greater sensitivity of losses and gains (loss aversion) and a tendency to evaluate outcomes frequently (myopic). It has its roots in behavioural finance, and was born from the observation that investors received the most frequent feedback (and thus the most information) took the least risk and earned the least money. In other words, investors who are overly preoccupied by the negative effects of losses in comparison to an equivalent amount of gains - take a very short-term view on an investment. They pay too much attention to the short-term volatility of their stock portfolios and make too many adjustments. They are overly conscientious.
This phenomenon also holds true for planning in the operational or short term planning horizon. Combining planners fear of lost sales with their tendency to review the plan too frequently, planners can pay too much attention to the short-term and make too many adjustments to the production plan. This has the effect of creating plan instability which is then cascaded through the supply chain, creating the bullwhip effect.
Ironically the best planners could be those with a lower level of conscientiousness, who are more likely to ‘go with the flow’ rather than to conscientiously over-react.
If you would like to find out more about your own personality traits and how they affect your propensity to plan then please take part in an experiment that we are running at the University of Warwick, for research purposes. The aim of this study is to explore the relationship between planning decisions and personality preferences. Ultimately we want to understand how people behave to inform planning policy.
The study consists of one simple planning task followed by a series of questions to identify your personality preferences. It takes on average 15 minutes to complete. To participate please follow the link:
Your participation is anonymous. We will report the findings from the research survey in the final week of the course. We will try to provide personalised feedback.
If you don’t want to take part please click the ‘mark as complete’ button and then ‘next’ to move on to the next step.
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