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Are you wasting your time on Switching Costs?

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Switching costs might not be a term you are familiar with. And reading the words for the first time might not give you even a remote glimpse into their definition. Some people would think of the time it would take to switch anything: switch you car insurance, switch houses (move), switch partners (break-up and move on?), etc. But no, it has no real bearing on switching a concrete thing. Switching costs are associated with switching between task: having to direct and re-direct your attention.

If you’ve read the book “Deep Work”, of which I’m not a massive fan because some of the examples are massively contradictory, you probably do know what switching costs are: they are the time loss associated with constantly having to re-focus on a task. Yes, being distracted is actually costly. Let me explain and exemplify:

Imagine you’re at work. You are writing up a report for a client. It’s on basic market research for them launching a product. You have written this type of report many a time before, and know you don’t really need all of your focus to finish it and deliver a good product. However, knowing this you are almost open to distraction. Your e-mail is open, your phone is clearly insight and you can feel it buzz or see it light up. You will grab almost every opportunity to get distracted from the task at end. A colleague needs help? Of course you’ll jump in and help them out. Only to, after that is done, to have to read most of the report all over again to know what you’ve already, what you still have to do, and what you were doing in the first place! That’s a lot of time wasted on getting back into a task because you got distracted. And that time is what we call switching costs.

Switching costs don’t just apply when you’re not fully focused because you know you don’t have to be. No, they also apply when your really do want to focus and need 100% of your attention, yet constantly get distracted by colleagues, e-mail, children, social media or the issues associated with life. Every distraction which has you directing attention away from your initial task to then have to re-direct it back to task, regardless of your mental state, is called a switching cost. And trust me, distraction can become very costly.
person using MacBook Pro

Don’t believe me? Let me take myself as an example, as it’s just like me writing this article. I should be able to write this article in under an hour. But am I able to with both my e-mail and my WhatsApp open? Bad idea. Terrible idea. Especially if the volume on my laptop is at an annoyingly distracting level, meaning each time I hear a “ping” I get curious as to what the message, interrupt my writing flow with thinking about this message, in the end maybe even check the message and reply (I’m not a read and ignore type of person) and then have to get back to my writing. 

You might be thinking: reading and replying to one message doesn’t take that long. And no it doesn’t. But after that, I have to re-read the last 2 or 3 sentences I’ve just written, to hopefully still know what I was talking about, and where the rest of the story was supposed to go. If I do, great, and I’ve “only” wasted about 3 minutes of my time. If I don’t, not so great, and I will have wasted at least 5 minutes of my time, potentially even more, if I genuinely lost the clue of the plot. So my switching costs would be 5 minutes.

Now imagine, I do this for every “ping” I get. Not to brag, but I’m pretty popular when it comes to the number of “pings.” There’s lots of distraction going on, and if I get 20 “pings” in an hour, which I often do, then that would equate to about 60 minutes of lost time, as I’m being distracted from writing this article and have to re-focus my attention every single time. Given that this article should only take me an hour if I were to be focused, I have just doubled the time it took for me to write this article. And that’s insane.

So, how does one escape paying these switching costs? Well, by not getting distracted. And there lies the problem. Because as soon as you’ve got an Internet connection, distraction just manifests itself.

If you don’t need any internet, switch it off. I’m writing in Word, I don’t need it. If you can be without your phone for an hour (or five), put it on silent, switch it off, or even put it in a different room. If it’s really urgent, they will find different ways or reaching you.

When it comes to the environment there’s things you can do as well. Be alone. Bit anti-social, but very effective. You cannot have people around you asking you questions, wanting things from you or just distracting you with noises, or just their sheer presence. Once all of these conditions are met, you should be able to give it 100%, and be finished in no time!

One thing has to be mentioned: Switching costs are not you giving up on a task because you just can’t focus because of tiredness, stress, or other mental or physical limitations. If you stop working because it’s simply going nowhere and it seems to be a waste of time, that’s fine. If you’re not at a decent level of productivity and are not on an urgent deadline, that might just be the best choice for it. 

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Merle van den Akker
Merle van den Akker is a PhD student in Behavioural Science, at the Warwick Business School. She studies the effect different payment methods, especially contactless and mobile methods, have on how e manage our personal finances. In her "free" time she writes articles on personal finance, behavioural science, behavioural finance and life as a PhD student, these are all published on Money on the Mind. With DDI, she writes on personal and behavioural finance, to ensure that knowledge from academia trickles into the mainsteam, and can help as many people as possible!

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