Financial data are lagging indicators. Corporate myopia consists of obsessing about them and failing to see the Tsunami or the (Blue!) Ocean of opportunity ahead.
Companies therefore seek to identify and work on “leading” indicators.
During a recent meeting in Brussels with colleagues and friends (N. van Heck, M. Newman, N. McRoberts and F.D.C. Professor D. Sardenberg) the notion of using “Cognitive Dissonance” as an indicator came up.
Wikipedia provides the following definition of the phenomenon: “an uncomfortable feeling caused by holding two contradictory ideas simultaneously. The “ideas” or “cognitions” in question may include attitudes and beliefs, the awareness of one’s behavior, and facts. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance.” (http://en.wikipedia.org/wiki/Cognitive_dissonance).
In other terms, when there is dissonance, our brain has learned to rapidly build a bridge over the contradiction to reduce our malaise. A simple example is about smokers: They all know their habit to be deadly but have each found more or less consciously a way to pseudo-rationalize a justification it so that they may enjoy each cigarette instead of feeling torn between two opposite ideas in their mind.
As we see, this very useful “coping” mechanism (enabling us to live with apparently contradicting ideas) can also be deadly and lead to dangerous blindness: recently, the CEO of a much respected consumer electronic goods manufacturer appeared in the press, blaming it and the consumers for failing to see the superiority of his company’s latest product against the much celebrated one of a competitor. He added that his company was now going to go head to head against the enemy. My first feeling was “Sell short!” followed by: Could this be cognitive dissonance? A well intentioned and passionate CEO believes in his firm ability to produce superior technology and finds it hard to cope with the enthusiasm generated by a lower technology competing offer. Unfortunately, the way to cope with it (denying markets feedback, blaming the press and attacking the competitor) will probably not help him regain users’ affection nor market share.
Recognizing Cognitive Dissonance and its potentially dangerous coping mechanism is a very rich mine of information for leaders in their firms. The stronger their reaction “against” the dissonant comment coming from the outside, the deeper their rejection from the maverick’s suggestion coming from within their organization should be a leading indicator that they risk falling into corporate blindness.
We welcome your comments and reactions to help us progress in that promising filed.