Emre Soyer and
Robin Hogarth write in the Harvard Business Review (May, 2015) how “experience
seems like a reliable guide, yet sometimes it fools us instead of making us
wiser. The problem is that we view the past through numerous filters that
distort our perceptions. As a result, our interpretations of experience are
biased, and the judgments and decisions we base on those interpretations can be
misguided. Even so, we persist in believing that we have gleaned the correct
insights from our own experience and from the accounts of other people,”
(p.73).
It can be one of
life’s most embarrassing moments, when as a leader, you simply go on your own
experience, confident beyond doubt that you are correct – only to find out that
you are wrong – and it’s not just the realization that can be a shock to the
system; but how you deal with the ‘error’ with your team or organization can
have far reaching implications for your leadership long into the future.
Soyer and Hogarth
remind us that “in the business environment, the outcomes of decisions are
highly visible, readily available for us to observe and judge. But the details
of the decision process, which we can control far more than the result,
typically don’t catch our attention. If the aim is to learn from experience –
mistakes as well as successes – acknowledging the process is critical. Where a
good outcome can lead us to stick with a questionable strategy, and a bad
outcome can cause us to change or discard a strategy that may still be
worthwhile. For example, in the NBA, coaches “are more likely to revise their
strategy after a loss than a win – even for narrow losses, which are
uninformative about team effectiveness,” (p.74).
Our attention to
outcomes – and disregard of the processes that create them – make solutions seem
more valuable than preventative actions. A decision maker who solves a burning
problem can be identified and rewarded, while one who takes action to avoid the
same problem is far harder to spot. This common error has a serious implication
on organizational culture that most leaders are totally unaware of – and the
act of unrewarded, unnoticed, pro-active problem solving can lead to long term
problems – as the ‘problem solver’ often moves on to greener pastures and the
organization starts to encounter problems that they are not ‘geared’ to solve –
and a once seemingly well run organization can suddenly look badly run and
unsustainable in its current form.
“Honest feedback –
an unbiased, undistorted assessment of one’s experience – is essential for
improving decisions. Yet decision makers are often surrounded by individuals
who have an incentive to feed them censored and self-serving information – and
these people are not necessarily a crowd of yes-men.” (p.74).
Yet sadly it seems
that too few leaders are genuinely open to receiving honest feedback,
especially when mistakes have been made – and this one trait is ‘core’ not just
to effective leadership, but has a significant impact on employee motivation,
performance and hence overall productivity.
“Censorship is a
powerful tool for influencing opinion. Restricting the information that reaches
decision makers installs a strong bias in their perceptions. Even if we are
aware of the existence of censors, it can be difficult to think beyond the
immediately available information. Our intuitions are often shaped by the
evidence we recall, no matter its relevance – a tendency cognitive scientists
call the availability bias,” (p.74).
The issue of
openness should be a key part of leadership development at the very start of
the ‘talent pipeline’. That means leadership development at the start of an
individual’s career should focus on teaching leaders to understand the
importance of seeking different points of view; not just being open, but
actively seeking ‘different’ opinions, to help them solidify their thoughts and
to make this the rule in their decision making process.
Soyer and Hogarth
remind us that “we can’t place the blame of our distorted view of the world on
the environment and our inner circle. Some of the blame lies with us. Our own
reasoning abilities can sabotage how we collect information and evaluate
evidence. We end up learning the wrong lessons from our experience – even when
it’s possible to learn the right ones. One issue is that we tend to search for
and use evidence that conforms our beliefs and hypotheses, and we gloss over
information that contradicts them – an exercise of selectively building and
interpreting experiences known as the conformation bias” (p.75).
It’s easy to gloss
over articles like this and adopt the ‘yeah, yeah philosophy’ where leaders
‘hear’ the words, but don’t internalize the problem – believing that it doesn’t
really apply to them. Leadership has a very long way to go in the 21st Century, and in my opinion, is lagging way behind other developments in the
last 20/30 years. We need leadership to develop at the same pace that
technology has been developing – and the only way that is going to happen is
for ‘us’ to create a global culture, where we all start being highly critical
of ourselves (before we are critical of others) – whether we are currently
leaders or not.
Sadly the ‘social
media’ scene is one of the greatest barriers against this happening – as social
media encourages everyone to ‘pretend’ that they are brilliant and discourages
them to be open and honest, and to share their failures and fears with the
world.
Soyer and Hogarth identify
six techniques that “can uncover the real lessons experience offers. None are
easy, but making the effort to adopt them can help you base decisions on a
clearer world view” (p.76-77).
Sample Failure:
Failures and the processes that lead to them are doomed to stay in the dark
unless special occasions are created to bring them to light – something that is
not easy for managers to do.
Don’t Miss Near
Misses: Another oft-ignored event is the near miss – a failure that’s disguised
as a success, but only because there are no dire consequences.
Pursue Prevention:
Recognizing a potential problem requires a different approach than solving an
actual problem. One strategy is to harness employees’ collective talents by
allowing people to raise concerns about the firms operations. Many companies
incentive mechanisms work exactly to the contrary, and employees often hesitate
to speak up for fear of reprisal or being labelled a nuisance. Employees should
be made to feel comfortable reporting issues to the very top – even obliged to
do so.
Disagree: As Peter
Drucker wrote, “the first rule of decision making is that one does not make a
decision unless there is disagreement. Ed Catmull, the president of Pixar and
Walt Disney Animation Studios, stresses the importance of building a brain
trust, a group of advisors who will deflate egos and voice unpopular opinions.
He argues in his September 200b HBR article that disagreements in meetings end
up benefiting everyone in the long run, because it’s far better to learn about
problems from colleagues when there is still time to fix them than from the
audience after it’s too late.
Disconfirm: Rather
than finding clues that corroborate your hunch – all too easy in an information
rich world – start by asking yourself how you could know you were in fact
wrong. What evidence would contradict your belief and how likely is it that you
would see it?
Lose Focus: Managers
who acknowledge the role of serendipity and luck have an advantage over those
who have illusions of control and are overconfident about the accuracy of their
judgments. Change is both inevitable and unpredictable. A wide perspective can
help, giving new meaning to our varied experiences and allowing us to learn
from them and draw on them in surprising ways. The result is often
serendipitous discovery and innovation.
These six
techniques are a brilliant first step to becoming a better leader and improving
your decision making processes. Beyond that, simply employing these techniques
so that they become the rule and not the exception in your organization, will
create a significant positive change on your organizational culture that will
be traceable right through to the bottom line and also highly influence your
potential for optimizing your sustainable growth into the future.
Finally as the
late Hillel Einhorn, one of the fathers of behavioral decision theory, asked
“if we believe we can learn from experience, can we also learn that we can’t?”
References:
Sayer, E. and
Hogarth, R.M. (2015). Fooled by Experience. What you think you’ve learned may
be wrong. A guide to figuring out the real lessons. Harvard Business Review,
May Issue, p.73-77.
