One of these things is not like the others…and confirmation bias will make sure it doesn’t get the job.

confirmation bias part two

According to the HBR, when you only have one non-traditional candidate in your hiring pool, that candidate has zero statistical chance of being hired.

Confirmation Bias Strikes Again.

When a business stalls or encounters serious problems, it is often the very “team” that gave it strength that now is part of the roadblock to creating innovative solutions.  Most businesses tend to hire employees from very similar backgrounds, whether socio-economic, schooling, or even geography.  It can narrow their perspective and also create an effect where there is deadly “group think.”  This is usually thought to be a result of the players being so “comfortable” with each other that they don’t challenge each other’s assumptions, and tend to draw the same conclusions. (Real-life examples of the type of “group think” turnaround featured in the classic “Twelve Angry Men” are rarer than we’d like to believe.)

A recent study published in the Harvard Business Review points out an even more insidious barrier to change, even among those companies that may be trying to diversify their teams.  It’s a long, but fascinating read….and you better have at least two people with a different perspective if you want to turn that jury around.

If there’s only one woman (or ethnically diverse or non-college educated or under-represented “fill in the blank here” candidate) in your candidate pool, there’s statistically almost no chance she’ll be hiredRead it here. The good news? Adding just one other non-traditional  candidate radically increases the statistical probability that a non-traditional candidate will be hired.

We’ve talked about how confirmation bias can limit your ability to correctly identify your problems here and why project teams need diverse viewpoints. Need to see just how homogenous your team is? Grab our “Reading the Terrain” field guide here. The pointed questions will help you view a very familiar place with fresh eyes.

3 Great Reasons why what worked for you Before isn’t working Now (Pt. 2)

 

rapid rise and descent of a business strategy

Your strategy was working great, then it stopped? Here’s three reasons why it may have stopped working.

It was Working.

Now it’s not working.

Why?

It’s hard to continually grow success. With rare exceptions, the line to the top of the success platform is more often a series of “one step forward, two steps back, a side step, a loop de loop,” and then, finally, “up we go”. One of the most difficult things to come to terms with in both business and personal life is when something that had worked so well for you previously is now not only not working, but may actually be working against you.

So why isn’t it working?

(Go Here if you missed Reason #1, “The ground under your feet changed”)

Reason# 2.  You mistook a one-hit wonder for permanent success.

Pet Rock? Business theory flavor of the month? You had a great run but suddenly its not working,  and now you’re stuck.  Hopefully if you intentionally produced a gimmicky app, product or snack food you knew it was going to be short lived and planned accordingly. But sometimes, you and your product are the beneficiary of lucky circumstances, timing or a specific moment in the market, which can create a false sense of a more permanent success.

Think of a musical group that has their song picked for the soundtrack of a hit movie. The song skyrockets to the top of the charts. Now it’s time for a follow up. Maybe it’s a winner, maybe they were the beneficiary of a moment in time. There will be a big difference in their future between living on the residuals of one mega hit vs owning the Rolling Stones catalog.

Notice I didn’t say that the musical group was any more or less talented or hardworking than any other musical group. Hard work and talent count but there are a lot of hard working and talented people out there and they’re not all giant successes.

In the business world, the markers of what made a particular set of circumstances unique often aren’t known until hindsight kicks in.  Years ago I worked in the non-profit arena where many large grants and funds were available due to a specific set of circumstances in the market (bank mergers coupled with mirroring a favored business theory of the then current government administration). The trend continued for nearly 5 years. If you began or started a non-profit in that space during that time, it was easy to raise funds and gain support, giving you a sense of success and a feeling that you “knew how things worked.” Except that was a moment in time, not replicated at any point for the next 11 years.

Were you attached to a popular business theory that “ran its course?” In the past few years we’ve had “The Secret”,”Get Rich Quick” schemes,  and a host of other short term mega hits. If your work is closely attached to a theory that is now discredited or fallen out of favor, even if your work is sound, you will need to repackage it and rebuild success based on a new foundation.

You may have even been the cute new “upstart” in a business sector, and now you’re the “middle-aged” stalled out player, not venerable enough to be one of the “big boys” you ran circles around when you started, and not youthful enough to be as nimble as new market entrants. Many of the “dot-com” wonders of the early 2000’s are facing this dilemma now. Your growth rate no longer thrills Wall Street, because it’s hard to match the early years of phenomenal growth, and the “new market” players may have more immediate upside potential. And the old boys either went under or figured out how to address the threat you made to their market share all those years ago. You’re in the middle, and need to regroup.

Our next article: Reason #3 “You’re wearing the wrong clothes”

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3 Great Reasons why what Worked for you Before isn’t Working Now. (pt. 1)

rapid rise and descent of a business strategy

Your strategy was working great, then it suddenly stopped?
Here’s three possible reasons why.  

It was Working.

Now it’s not working.

Why?

It’s hard to continually grow success. With rare exceptions, the line to the top of the success platform is more often a series of “one step forward, two steps back, a side step, a loop de loop,” and then, finally, “up we go”. One of the most difficult things to come to terms with in both business and personal life is when something that had worked so well for you previously is now not only not working, but may actually be working against you.

So why isn’t it working?

Reason# 1. The ground beneath you has changed.

Think of little girls in school. Most are rewarded for being quiet, polite, raising their hands, doing their work conscientiously and neatly. This gets them A’s not only in school work but those goofy awards like “Best Friend” “Teacher’s Helper” and, later in life, “Girl most likely to be doing her boyfriend’s homework while he’s off doing whatever cool thing he does that makes her want to date him.” Boys in school are not expected to be as quiet, or as well behaved, and while it might get them a “C” in deportment or behavior (or the more modern version, endless red cards), it doesn’t generally hold him back.

Now move these kids to a different playing field. What happens when these two get into the business world? One has the forward focus of doing what he wants or needs to do to get what he wants. One is a worker bee. Which is more likely to be CEO?

Shift that to a business model. During the recent turbulent times you kept your business super conservative. This helped you survive very rough seas and may have even gotten you some public praise. To be conservative you cut inventory to a minimum, watched receivables like a hawk, cut expenses, minimized staffing and got them to multitask like no one’s business. You “won” the recession. But slowly, maybe without you noticing, things change. As the economy slowly improves, your inventory looks tired, minimal. Your team, exhausted, starts getting other offers. Things start to break down, because you didn’t replace them, or they’re out of date and you’re now doing more creative things to work around the outdated system every day. New competitors (maybe even sinking severance pay into a new business) suddenly appear, shinier, newer, with newer systems, fresh inventory, a fresh perspective. Many will go out of business shortly because they don’t know what you know, but at the same time, they will take their hits on your market share. Some may even survive. Your old staff may work for them, coaching them on the areas they don’t know a lot about. The ground changed beneath your feet, and you are still fighting the war using the tools that worked before.

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Time to reassess. We’ll give you some tools at the end of this series. (If you want to start seeing your business with fresh eyes today, sign up for our free booklet “Reading the Terrain” by subscribing to our newsletter today.)

Our Next Article: Reason #2: One hit wonders…

Is your “Confirmation Bias” Backing you into a Corner?

are your confirmation biases blinding you?

Confirmation Bias + Misplaced focus = Epic Failure

Confirmation Bias is a common phenomenon where humans view large quantities of evidence and choose to give greater weight (or even all the weight) to those items that support their theories. Think of it as a recipe for disaster:

Confirmation bias + Excess focus on the areas we know best (regardless of their importance)Epic Failures a.k.a. Projects that consume a ton of energy and yield little in the way of results.

In her recent book, “The Upside of Down” Megan McArdle gives two great examples of “confirmation bias”, one dealing with the “Truthers” who claim the 9/11 bombings were a secret government project and the other example an examination of how different groups view the reasons for the recent financial crisis, each “team” selecting the evidence that support their theory and rejecting other bits of evidence.

Lately it has become easier and easier for all of us to ignore or reject information that runs contrary to our internal views. Depending on your politics you can select a news channel that will then present the news in a slant that will endlessly confirm your world view. Any dissenting opinions will be cut off, minimized or mocked.  The speed at which an internet based news society disseminates information also allows for a minimum of in-depth journalism, much less fact checking.

Unfortunately we do that inside of the business world as well. Labels such as “negative,” “nit-picky” or “impractical” can be accurate, but they can also be used to ignore dissent, or worse yet, critical red flags. As a business leader, if you’re committed to doing great things, you need to be open to listening to your critics. There may be a nugget of gold in there.

Years ago I worked at a dot com. After working there for several months, I was told we’d be launching free websites for real estate agents, then charging for them at some distant later point. Having come from an accounting background I asked some questions about the timing of the future revenues vs. the cost of extending the free sites for an indefinite time. I remember being told very clearly (and somewhat condescendingly,) that I “didn’t understand the model.” I went home that evening, questioning myself, my brain, even my ability to function in a changing world. I ran the numbers, researched other similar models, and calculated the rough costs of the tens of thousands of dollars I knew that the company was spending each day. (Our “burn rate” was to the tune of about 500K per week). I decided I was simply “not getting it” clearly a dinosaur unprepared for the new world of the internet based business model. I was 33 years old and a dinosaur.

I was wrong. I understood the model. The company, however, did not. They shut down 8 months later, having been unable to convert the “business model” into a sustainable business fast enough. The investors were unwilling to provide any more funds as well. They apparently didn’t understand the “business model” either.

As you create your plan, your vision, listen to the dissenters. Ask questions, probe for why. Punch holes in your own plan. Play devil’s advocate and picture a model that operates on entirely different assumptions than the model you chose. Why is your model more valid? Where are your confirmation biases? When you’ve uncovered them, and examined the dissenting evidence and factored it into the model, that’s when you’re ready to begin!

Need some more ideas on how to make sure your project is ready to go? Start here.

Worried about your blind spots? Read this.

Afraid you aren’t seeing the bubble you live in? Try this.

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Speed Read an Organization with our Easy Guide

A great way to see all the moving parts in an organization is to review the lists of questions found in our free field guide. It’s free, simply sign up for our weekly newsletter (and no we won’t spam you or drive you nuts with crazy emails. We sent our a digest one time a week of relevant articles. That’s it.) There’s a box either at the right or just below this for you to sign up. And you’ll get your free guide right away.

What are you NOT seeing? And what is it going to cost you?

 

people with blinders on

Are you stuck in your confirmation bias?

Years ago I would periodically attend senior staff level meetings for my boss when he was out of town. This would happen only a few times a year, but inevitably, my boss would be surprised at the insights I would give him from the meeting. Not the notes on what was said, but my take on the changes in the internal politics. Just by observing the meeting I could tell which departments were in favor, which were jockeying for position and which had fallen out of favor.  Often before he had even noticed.

Why?

When we’re in the middle of something on a constant basis we don’t always catch the subtle signs of impending change.  The details of our day to day existence distract us so we don’t step back and take a look at the big picture, and even when we think we do, we look at it through a filter of what we think is happening. We look for things that will reaffirm what we believe to be true and ignore those that invalidate our truths, there’s even a term for it, “confirmation bias”.

Test yourself today.  Are your assumptions about what’s working (or not working) true? Answer these questions off the top of your head… then go run some tests to verify.

Your revenue generators:

  • Who are your key clients?Are they the same people as previous years?  
  • Any changes in buying patterns? Do you know why? Would they cite the same reason?
  • What about payment patterns? Anyone now a slow payer that wasn’t?

Your Customers or End Users:

  • What questions are your customers asking?
  • Do they indicate movement towards a new product line, a new technology or a new need?  
  • Are they finding you the same way they used to? (Think of the days of yellow pages vs. internet, vs. mobile technology). Can they find you using the method they’re using?
  • If you have a physical location does it show up on Google maps?
  • Does the name of your company, department or group actually indicate what you do or sell now?

Your Team:

  • Morale up or down? Why? 
  • Are you attracting better talent to join your team than the talent you’re losing to competitors?
  • Is your team all from the same background? Schools, geography, ethnicity, gender, age, economic background? Any chance that’s hurting you?  
  • How long have they been in the same roles? Is there an incentive for them to move out if they can’t move up? What will you lose if they move out?

External factors and competition:

  • Is your competitor’s market share shrinking or growing?
  • Is the overall market for what you offer shrinking or growing?  
  • If the market is shrinking, what’s taking the place of what you are offering? Is there a new technology or is someone else promising a “magic bullet” solution to your customer’s needs? What’s attractive about that “magic bullet?”

Find any surprises?  We’re so busy trying to “make it all work” that tectonic shifts can be taking place beneath

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Speed Read an Organization with our Easy Guide

our feet without our noticing. Consider today a starting point, a new commitment to seeing the whole playing field.  For even more things to take a look at, download a copy of our free field guide, Reading the Terrain, by subscribing at with your email address. It will help you look at your playing field with fresh eyes.

Have you ever missed a key change in your industry? How did you catch up? What opened your eyes? Discuss in our comments section.

 

© Jeanne Goldie 2015