“We’re Number one: What could we possibly learn from you?” by Michael Newman

by Didier Marlier on Saturday October 8th, 2011

Our success comes from being smart; yours is simply due to luck. We benefit from our carefully crafted strategies; you just happened to be in the right place at the right time. We are confident; you are arrogant…. Dismissing the opposition is a comforting pastime, but becomes a real danger if they are hungrier than us.

 In the Enablers Network, we are very fortunate in our work. We are able to closely observe people from all parts of the Globe, who represent a rich diversity of cultures, professions and industries. Often we watch teams taking part in business simulations. These simulations can be anything from simple 30 minute exercises to illustrate particular behaviours, to multi-day computer based strategic business simulations. We see intact teams in action as well as mixed groups. Many of the simulations involve multiple teams working in the same room on an identical challenge, sometimes as competitors, and sometimes with the opportunity to collaborate or cooperate. Over the years, we have noticed a fascinating, and worrying pattern of behaviour:

 When participants in a simulation come from a company that is Number 1[*] in their market, they habitually fail to take notice of the other teams in the room doing exactly the same task.

A clear consequence of this introspection is the inability to learn from the mistakes, progress or success of the ‘others’. We have on many occasions seen teams accept catastrophic failure in their task, whilst on the next table their colleagues are delivering world class performance. Or vice-versa, where a winning team smugly refuse to lend support to failing colleagues. The reviews are always interesting, with all sorts of post-rationalisation: “looking would be cheating”, “it doesn’t say we can in the rules”, “there wasn’t time”, “they will learn more if we let them screw-up”, “they wouldn’t have helped us if we were struggling”. Occasionally, masked by humour, some hint of honesty slips out: “Yeah, but they are all idiots anyway, our ideas are far better than theirs” (this normally happens when ‘they’ have soundly beaten ‘us’ in the challenge).  This enables a robust conversation to be had about the not-so-fine line between confidence and arrogance.

 Marcial Losada, (a psychologist and behavioural mathematician) was able to directly relate business performance to this balance between internal and external focus in his groundbreaking work on flourishing teams. He and his colleagues saw that high performing teams spent roughly the same time and energy on their own agenda (he used the term ‘self’) as they did paying attention to competitors, other parts of the business, or stakeholders (Losada defined these as ‘others’). Medium performing teams spent, on average, 1.6 times as much effort on self as they did on others. Finally, the low performers gave a frightening 30 times as much attention to themselves as they did to the outer world. The research supports our intuition; you cannot fly high when you are looking only at your own shoes.

Of course, it is not exclusively Number 1 companies who exhibit these behaviours; most teams have an inward focus when confronted with a new task or context. After all, they have to form a team or adjust to the artificial environment of the simulation. What is relevant is that many teams learn from a tough review and actively seek to gather intelligence / spy on / steal with pride / help, or collaborate with other teams in the following challenges. It is the teams from Number 1 companies that seem to struggle to learn and continue to focus internally during subsequent simulations.

An example sticks in my mind. When I was with one client, who will not be named for obvious reasons, I saw teams continue this destructive behaviour over 7 different hour long simulations, spread over several weeks. We even mixed the teams up, but the parochial mindset was rigid, and the refusal to accept that this was a problem continued. Exasperated, and after having my feedback ignored yet again, I said; “So you are honestly telling me that this behaviour just happens here in the hotel and you don’t dismiss your real competitors when you are back at work”. After a chorus of; “That’s right Michael, it is just here with these games, we are sharp and open-minded back in the real world”, a courageous lady stood up and challenged her friends. She had a specific recent example of how the refusal to acknowledge that a competitor was raising their game had caused the loss of a contract. Even worse, she said; “When I challenged the complacency, I heard exactly the same denial, blame and trivialisation that we gave Michael when he pointed out what we have been doing here”.

What followed was a very insightful, self-critical and purposeful discussion about how the company had got to be Number 1, how it had got rich using its winning formula, how talent was attracted by this identity and how new hires were inevitably being indoctrinated into a blinkered and self-reverential complacency. “If I work here it must mean I am the best, and the company must be the best because we work here”. At this stage, some of you from other companies, professions, or Business Schools may be feeling the warm flush of recognition.

There are several factors that create such environments, one of which is confirmation bias. Wikipedia defines it as follows “Confirmation bias (also called confirmatory bias or myside bias) is a tendency for people to favor information that confirms their preconceptions or hypotheses regardless of whether the information is true.”

Margaret Heffernan’s book ‘Wilful Blindness: Why We Ignore the Obvious at Our Peril’, is full of examples of how confirmation bias causes real harm. In an early chapter, she endorses an explanation from Robert Burton, ex-Chief of Neurology at Mount Zion – UCSF Hospital: “Neural networks don’t give you a direct route from, say, a flash of light straight to your consciousness. There are all kinds of committees that vote along the way, whether that flash of light is going straight to your consciousness or not. And if there are enough ‘yes’ votes, then yes you can see it. If there aren’t, then you could miss it. But here’s the thing; what does your brain like? What gets the ‘yes’ vote? It likes the stuff it already recognizes. It likes what is familiar. So you will see familiar stuff right away. The other stuff may take longer, or it may never impinge on your consciousness. You just won’t see it.”

As individuals we are all susceptible to confirmation bias, but surely that is why we are put into teams. Shouldn’t teams, by definition, bring diversity of opinion and experience? Yes they can, but if there is strong social pressure to conform to a particular culture or belief, the personal bias may even be amplified. Heffernan also shared the findings of Cass Sunstein, a legal scholar and Harvard professor. He and his colleagues found a group polarisation effect; “When groups of like-minded people get together, they do not challenge one another, they make each other’s views more extreme”5

Losada, Heffernan, Burton and Sunstein are just a small cross-section of the people who have delved into the marginalisation of alternative points of view.  What is clear from their findings, from history and from our experience is the scale of the challenge facing a Number 1 company, if they truly want to change behaviour. Individual confirmation bias is likely to be reinforced and amplified by like-minded colleagues operating in a culture of superiority. Emerging evidence of under-performance can easily be (mis)interpreted as a need to ‘go back to what we know best’ or the result of competitors riding a temporary wave of market conditions. Finally, there may not be a compelling business case for change; no ‘burning platform’ or powerful external shock to wake us up. Inevitably a state of denial permeates the workplace and delays necessary action.

It is therefore vital that, through leadership, we create the conditions to challenge ourselves and each other, notice and label our own orthodoxies, and disrupt ourselves before our hungrier competitors exploit our arrogance and eat our lunch.

Thank you to Michael for this excellent new post. Hope you found it useful. Paris ahead for a couple of workshops and meetings. Have a great week all. Didier

[*] Number 1 in this instance means dominant in an important metric that creates a sense of satisfaction or pretension.

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