The Texas utility companies and the Public Utility Commission of Texas would benefit from learning UPOD: Under-Promise, Over-Deliver. It’s a key idea in the business world to lower expectations and then outperform your promise. If you tell your customers and clients that something is going to take a week to complete, but then deliver it in a few days, you will rise in their estimation.

In regard to Texas, for future energy shortages and weather crises, I would recommend that the authorities tell people that they will likely be without power for a week, if the authorities think it’s only going to be a couple days. Then the authorities can tell people, “Oh, surprise! We are turning on the power early.”  And instead of griping about thwarted expectations, customers will be delighted.

Recently in Texas, officials told the public there would be temporary outages and rolling blackouts. Instead, there were complete blackouts and shortages of power for multiple days, preventing people from making proper plans to find alternate shelter. Similarly, when I’ve been in an airport and am told there’s a three-hour delay, and that delay gets reduced to two hours, I’m happy. When they tell me it’s a one-hour delay and it increases to a two-hour delay, I’m upset. I know the reasons behind the Texas energy failure are complicated, and I'm not suggesting that I have any energy solutions. I'm only suggesting that managing expectations is an important ingredient in responding to an energy crisis or even to a financial crisis.

Expectations drive success. When people have unrealistic expectations of the stock market, it leads to impulsive and unwise decision-making. For example, our expectation should be that there will be big downturns almost every year. Why?  Because there are. Knowing this can reduce anxiety and keep us from selling our investments at the bottom. Likewise, in our jobs, we can be much more successful if we inflate how much time something will take to complete.

UPOD – Under-Promise, Over-Deliver is great for all expectations. When we recognize the long history of the markets delivering excellent returns, despite many negative years, we can relax and see any downturn as a normal movement of the markets. Expect significant downturns in your portfolio every year (Under-Promise) and you will be less likely to exit the market at the wrong time. Once the market rebounds, you will benefit from Over-Deliver.