In the last couple of weeks, the Chilcot report has highlighted some failings in government. Many of these things also apply to business and can help us unlock sustainable profits and avoid costly mistakes if we learn from those mistakes in our business dealings.
We discuss four key areas in this podcast.
- Cognitive Dissonance
- Confirmation Bias
- First solution Bias
The Government had concluded that there were WMD in Iraq. Evidence that then flowed that suggested they were not there – That creates dissonance, and the discomfort of that can be resolved by reframing the original information, rather than re-evaluating it.
In business too there is a tendency when we conclude something about the market or our business in one context to believe that we understand it well. When further information causes a reframing of the issue, adjusting our initial setting to maintain our original position, then we should be ‘on alert’. Being aware of the tendency to do this may, in itself, be enough to minimise its impact.
The evidence given to the government was in the context of looking for, and finding, proof of the premise made; too often, according to Chilcot without looking for any information that might confirm the opposite.
Without that negating evidence, it is easy to see that the weight of proof can appear to be overwhelming. It is important actively to combat confirmation bias by seeking out the alternatives, the opposites, and the tangential and validating each with equal weight.
First Solution Bias.
It was explicit in Chilcot that both Blair and Bush agreed early on that regime change was the right solution. Once decided other alternatives were either not discussed or dismissed on a much lower level of investigation.
In business too, there is a tendency to ‘latch onto’ the first reasonable solution to a business issue. If you knew there was a better solution, you would not spend the time, effort, energy and money on the first solution, and if businesses never look, they will never know. It is vital to be looking for alternatives, testing the assumptions made and seeking the views of others to avoid the trap of a sub-optimal solution that came first.
There’s a real danger of creating an echo chamber of similar opinions if the time spent discussing ideas is only with a small, like-minded group. Chilcot highlighted how small the cohort of advisors that were sometimes involved and the risks of that.
In business, we should all seek out groups with different experience, and backgrounds to consider and share our thinking. By exposing our ideas to others who can provide independent oversight, challenge and support. Be alert to the possibility of groupthink it seeps into the lives of the unwary when we stop guarding against it.
Listen to the podcast here
The issues and risks Chilcot highlights are manageable in every business with some careful workflow design and a strategic overview. If you would like to know more about how to achieve that please get in touch and we’ll arrange to have an initial no obligation discussion.