Biases come in all sorts of flavours and they’re the equivalent of supermarket ready meals – it’s food, sure, but the inside never lives up to the promises on the outside.
Our brains are designed to run sprints and avoid marathons. That’s why we have cognitive biases that are designed to bypass the cumbersome thinking process and jump straight to conclusions that are based on prior knowledge.
Biases are a double-edged sword.
They’re not all bad, though. It’s a bias that saves you from a miserable night on the toilet when you decide against eating food that looks off or smells funky.
Biases also help us understand a situation quickly and enable swift action – and while this works well with simple things (e.g. look both ways before you cross the road) the disadvantage is that decisions made under bias are mostly wrong (e.g. people with dark skin are disease carriers and should be avoided).
We’re often blinded by what we know.
And we end up making poor decisions when we have too much information (hubris) or too little information (ignorance).
Have you ever caught yourself (or others) obsessing over what the competition is up to when you know full-well that you should be obsessing over your customers to keep them happy instead?
There are only a few things worth obsessing over
Your customers, your product or service, your people and when you’re making a strategic decision.
Why strategy? Because that’s the one thing with the purpose of giving you an edge over the competition.
The challenge, when in the process of making strategic decisions, is to find accurate, consistent and meaningful data on your competitors and benchmarks.
Time to play some serious games
No process of strategy creation can be completed without playing some serious games.
Now, when I say games I’m not talking about the leisurely, for fun kind (although Flo’s Diner is the best MBA I ever bought for $9,99, no joke!).
What I’m talking about are strategy games, such as the premortem. (Bear with me, this is going to get a little Back to the Future-ish.)
A premortem (yes, “before death”) allows you to exercise prospective hindsight – imagining that an event has already happened – and you can improve a project’s chances of success by examining “what went wrong”.
It’s a process by which you make it safe for dissenters who are knowledgeable about the undertaking and worried about its weaknesses to speak up.
When you discuss what might go wrong (pre-launch risk analysis), you’ll often see that everyone ends up at the conclusion that for whatever could go wrong, you already have a solution (go Groupthink ?).
You start a premortem by announcing that a big strategic move has failed miserably.
Moment of silence. Now, let’s figure out how we got here.
The project has failed and your only job is to now figure out the most likely scenario that caused it.
- Over the first few minutes, everyone in the room independently writes down whatever reason they can think of for the failure. Especially encourage people to write down the kind of things they usually wouldn’t bring up for fear of being impolitic.
- Then each team member, starting with the project manager, reads one reason from their list. Everyone states a different reason until they’ve all been recorded.
- When the session is over, the project manager reviews the list and looks for ways to strengthen the plan.
Plan your scenarios right, or it’s all for nought.
As with any other experiment involving time travel, you need to get the settings just so.
Here’s some sage advice from McKinsey on the dos and don’ts of scenario planning.
- Review all trends that affect your business, especially those related to technologies, regulations and markets.
- Stay objective when picking the trends most and least likely to affect your business. Look for real-world examples, benchmarks and expert input where possible.
- Build scenarios around known-knowns and known-unknowns to actively challenge your long-held beliefs.
- Always assess the impact of multiple scenarios and develop solutions for dealing with the top three most likely outcomes.
- Most important of all, take this exercise seriously.
Still with me in 2020?
The premortem’s approach of prospective hindsight offers benefits that other methods don’t.
It helps teams to identify potential problems early on, but it also reduces sunk cost fallacy (another one of those pesky biases) that can plague those people who are overinvested in a project.
Besides, team members will feel valued for their intelligence and experience when they can describe weaknesses that haven’t been mentioned already (anyone managing millennials, take note!) and allows them to learn from each other.
This exercise also makes your team more aware of all the moving parts and makes them more sensitive to early signs of trouble when you finally launch the project.
Doing a premortem is the best way to avoid having to sit through an uncomfortable and potentially painful postmortem.