Innochat Transcript – 13 August – The Effects of Booms and Busts on Innovation
August 13, 2010 by Andrew (Drew) · 1 Comment
David W. Locke stepped in this week with a great framing post and moderation of the topic: The Effects of Booms and Busts on Innovation. Many thanks to David for his efforts!
A vibrant discussion was had and the perils of commoditization came to light as a pattern that drives down innovation performance due to resultant cost pressures and resource constraints. It was also interesting to see discussion on how companies focused on responding to market cycles need to pay attention to their own product lifecycle management, too.
David Locke’s tweet: “Fast followers don’t innovate. They just drag your price down.” certainly points toward the competitive environment in a post-boom world. Survival outweighs all other factors. Perhaps the most telling tweet he offered was his assessment on the current state of the economy: “It’s not just biz not usual, there is no biz, and will not be any biz for a very long time. Boom ate future.”
Ouch
Innovation & the Status Quo: The perils of groupthink, stereotyping and system justification
August 9, 2010 by Andrew (Drew) · 2 Comments
Everything is in a state of flux, including the status quo.
- Robert Byrne
Effective innovation demands embracing change. Unless you are completely dissatisfied with what you have now, the idea of forsaking some of your present discomfort for the pain of full-blown change not only seems unlikely, it is downright foolish. This is the conundrum faced by those tasked with improving their organization’s innovation culture. (“Wet noodle at the ready? Push! Push, I say!”)
Regardless of whether we choose to embrace it or not, change happens. The rules of participation are frighteningly simple—lead, follow, or get out of the way (with a hat tip to General Patton.) But here’s the issue: what we say we want to do (innovate) is not necessarily what we end up doing (clinging to our known circumstances), because so much in our individual psychology is reinforced when we gather with others in groups. We fall prey to our inability to avoid groupthink, we rely on stereotypes, and we cling to our current circumstances by embracing system justification.
Mine! Mine! Mine!
If you’re not a liberal at twenty you have no heart, if you’re not a conservative at forty you have no brain.
- Winston Churchill
As much as Churchill’s quote above rankles me, I cannot deny it. The young easily seek out and embrace the new, because they have a bias towards discovery. They are “wired” to look for ways they can differentiate themselves from their elders, and even classify themselves as distinct and separate from their peers based on their passing passions.
The young, and perhaps the young-at-heart, are predisposed to innovation. They possess things fleetingly—not with less longing or even covetousness, but simply with the notion that something newer and brighter and shinier will arrive soon. For them, the novelty of the new outweighs the inconvenience of making a change, because it is relatively easy to move on to the next new thing if you haven’t lived with the old thing for very long. (This may be one of the primary reasons why consumerism has gained such a toe-hold among burgeoning middle-class youth worldwide.)
Those older and, if we are casting about for additional generalizations, wiser do seem to slide into conservative patterns. The pace at which they exchange the old for the new slows down. Fads pass by at an alarming rate. Innovations in technology and customs become more elusive. Why? Primarily the status quo, like some extraordinary gravitational object at the center of our lives, begins to take hold and lock things into our personal orbits. This causes habits to form around the objects and ideas that comfort us, including existing products and services. And we hold on to them dearly, as though they were the true bedrock of our existence.
In light of this, is it any wonder that innovations struggle to come to life in organizations where management systems and processes are usually governed by those in place the longest?
The problem with habit-forming
The riskiest thing we can do is just maintain the status quo.
- Bob Iger
We have a cognitive bias for the status quo. People tend not to change an established pattern of behavior unless they have a direct and compelling incentive. Status quo bias is a reliance on the status quo in the absence of supporting evidence in its favor, or even in the case of evidence for not supporting its sustenance. Arguing to preserve the status quo is usually happens when people oppose a large, often radical change. Status quo bias accepts the present situation without the benefit of any inquiry or conversation about its merits.
Hard at work supporting the status quo is system justification. System justification is a theory within social psychology that holds that people not only want to see themselves and their own groups favorably, but they also want to look favorably on the overarching social order (the system they are justifying). A consequence of this behavior is that existing social, economic, and political arrangements across organizations (small or large) are often preferred, and any alternatives to the status quo, if conceived of, are maligned or avoided. System justification works to make the present circumstances unassailable.
The status quo, like a pack-a-day smoking habit, is a hard habit to break.
When faced with a bias-led desire to retain the status quo, newly conceived innovations may face the psychological equivalent of the immoveable object. Breaking through that requires putting the status quo front and center. It means not accepting it at face value, but rather examining it to reveal its deficiencies and incapacities in a public manner. Only by opening up the status quo to analysis can we make room for new thinking and behavior that attends innovation.
But that is only the beginning.
Yes, we’re all individuals
Take your life in your own hands, and what happens? A terrible thing: no one to blame.
- Erica Jong
Along with the impossibility of shedding an unexamined status quo, we are also faced with unexplored attitudes that provide support to the status quo by reinforcing our thinking about people in our organizations. This stagnant thinking is the result of stereotyping. Stereotypes are insidious, standardized and simplified concepts of classes or groups of people based on some prior assumptions. They are often learned by observing others, and may be highly contagious, and possibly one of the most harmful forms of groupthink pervading social structures.
As much as we might believe we are unique and truly individualistic in our world views it is remarkable how much stereotyping is at play in the life of our organizations. Our familiarity with negative stereotypes in terms of gender roles or race may lead us to believe we are beyond that, but in organizations, stereotyping is rife. Consider the ways in which we stereotype engineers, or accountants, or human resource professionals; how often do we fall prey to the casual shorthand of referring to all members of a business function in the same general terms? By doing so, we prevent our ability to see circumstances clearly, seeing behavior and explaining it away, rather than observing without judgment in order to form true insights.
The peril of stereotypes, especially when buttressed by the warm embrace of the status quo, is that they leave little room for the novel. They dismiss or disregard differences at the expense of perceived uniformity, and cut off yet another path to creativity and innovation.
Look anew with fresh eyes
The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.
- Abraham Lincoln
If ever there was a time that we needed to innovate, it is today. The status quo is not an acceptable alternative. A stereotypical view of the people around us will give us no source of joy, either. We must break our habits and see the world around us with fresh eyes. That might even mean taking a close look at where we stand (or sit) in the world, too.
By moving our position, and choosing to question what we think we know, we can begin to create room for more innovative solutions to the pressing demands of the present. To keep doing what we are doing seems not only foolish, it may be downright dangerous.
What can you see anew?
Innovation Failure & Ownership: What happens when we own our successes and abdicate our failures
July 23, 2010 by Andrew (Drew) · 1 Comment
It is possible to fail in many ways…while to succeed is possible only in one way.
- Aristotle
Innovation is a high-stakes endeavor. Much may be risked on the hoped-for chance of reward. The success or failure of a single innovation may win or lose reputations and careers. In some organizations, the retribution for failure may be swift and harsh, while the rewards for success may be just as fickle. An innovation approach that drives toward internal winners and losers in an organization is not built for long-term success. The trouble with that binary perspective—one in which innovation is a zero sum game—is that it negates the true value of the innovation process. That value resides in the opportunity to rapidly learn and adapt.
Learning as a means of advancing an organization’s strategic intent is nothing new. Peter Senge captured an incredibly useful model for the “learning organization” in his book The Fifth Discipline. He proposed that learning organizations are those in which members continually expand their capacity to create new solutions and obtain the results they desire. Senge saw that by expanding patterns of thinking, where people were able to see the systems in which they were operating from a holistic perspective, organizations could set their collective aspirations free. This required that organizations focus not on individuals but on the larger range of interactions within the organization and between affiliated organizations.
Which sounds like an easy prospect, but is in practice quite difficult. Without care and attention, the learning organization runs hard into the Darwinian determinism of the present-day competitive organization—the kind where only the successful survive and the less than successful are afforded “opportunities for personal growth outside the organization.”
Where has the love gone?
If at first you don’t succeed, failure may be your style.
- Quentin Crisp
Given that we have been exploring cognitive biases, mental models, and the social psychology influences on innovation, it’s fitting that we should leave this subject area with a look at the impacts of success and failure on both individual behavior and organization performance. Organizations, with their competitive pay structures and performance measures, make membership and participation a high-risk game. Those who know how to play the game, sometimes in spite of their relative productivity and output, succeed, while those who struggle to position themselves strategically, or who perceive that “playing” is beneath them, are left wondering “what happened?” as they observe less-deserving peers receive recognition, rewards, and advancement.
What we observe in these circumstances are the results of “adaptive bias.” Adaptive bias is the notion that the human brain has evolved to reason adaptively, rather than truthfully or even rationally, as a mechanism to reduce the overall cost of cognitive errors (misunderstandings derived from faulty perception.) Consider it a higher level of self-preservation. As with many biases, it addresses uncertainty by driving the subject (or subjects) to more concrete action.
Perhaps Oscar Wilde assessed the situation correctly when he offered that, “It’s not whether you win or lose, it’s how you place the blame.” For regardless of the effort expended, if you cannot align yourself with success in a highly competitive environment, you will not receive personal recognition. For some, an organization with this kind of scorekeeping causes them to go to extraordinary lengths to claim ownership of successful endeavors while distancing themselves from failures.
Captain of your own destiny or cruise director on the Ship of Fools?
A man may fall many times, but he won’t be a failure until he says that someone pushed him.
- Elmer G. Letterman
For our organizations to be more successfully innovative, it is necessary to elevate the competition from the individual play level to the market performance level. If competitive performance systems remain intact inside organizations, then the scramble to claim ownership for innovations will continue. The net effect of that jockeying for position is short-term, escalating, divisive conflict (as opposed to generative conflict) and a long-term erosion of organization trust. Not only are these both an impediment to innovation, they are hazardous to an organization’s health and viability.
An organization that gears itself for driving and supporting competitive internal systems will nullify the collaboration necessary for large-scale and system-wide innovation by fostering another bias in the member population. Known as the “self-serving bias,” its presence means that individuals perceive themselves as responsible for desirable outcomes but not responsible for undesirable outcomes. However, the act of failure avoidance denies us the opportunity to learn, and in attempting to position our failure as someone else’s, we perhaps doom ourselves to repeating it.
A global high-technology company, which shall remain nameless to protect the guilty, would be considered highly successful by most measures. It is big, powerful, and has played a significant role in creating and moving markets. Unfortunately, today that company is beginning to reap the rewards of the competitive culture it has sown. In this organization, ideas must “fight for survival” and only those people who can passionately, loudly, and often angrily argue their case prevail. Those who fail are derided, while those who appear to succeed move into management roles, only to perpetuate this pattern.
The resulting organization is one that is driven by fear and conflict, moving from market misstep to market misstep with little to signal that it can recapture its earlier flair for innovation and success.
The leadership of many an organization falls into this pattern of internal competition without questioning its role in the success of their organization. They repeat what they have observed, learned, and actively supported in their past roles—because if it worked in the past, it must surely work in the present. Their inability to question the value of internal competition results not in a learning organization but one that survives by paying lip-service to collaboration and cooperation, while leaving carnage in its wake as the assignment of blame continues apace.
Failure in innovation is not to be avoided, it is to be embraced.
Success is the ability to go from one failure to another with no loss of enthusiasm.
- Winston Churchill
What we actually need to practice is the art of failure ownership. Unlike the pain of an internally competitive landscape, the process of failure ownership requires that an organization support intellectual curiosity and an inquiry into the nature of how systems operate and interrelate. Innovation thrives on the ever-engaging quest for discovery that often meets with failure along the way. But failure is not an end-point, it is merely a way station. We need to enthusiastically own failures to the extent that we can unpack them, observe their genesis, and understand their triggers. With that learning in hand, we can then advance our innovation intent further by “failing forward fast.”
Innovation Beyond the Average: the challenges of delusions of grandeur and the Dunning-Kruger effect
July 19, 2010 by Andrew (Drew) · 6 Comments
Ignorance more frequently begets confidence than does knowledge.
- Charles Darwin
Innovation is not necessarily a size game. Bigger is not necessarily better. Large organizations keenly focused on innovation benefit from being able to exploit resources, processes, systems, and human intellect in a way that’s beyond the scope of a smaller enterprise or sole entrepreneur. 
Access to a breadth of elements means the possibility of widely divergent outcomes. Unfortunately, with size comes inertia, and one of its causes is the degree to which stable systems create immovable patterns and a certainty that comes with having “seen it all before.”
This kind of organization knows itself. It has a pool of clients it knows well and for whom it meets well-defined, long-term needs. It has access to resources via supply chains it has developed over time, offering little in the way of surprises. You could call this organization “fat, dumb, and happy.” And you would be right. The truth is that it has created a cultural delusion of grandeur, which makes it struggle to innovate.
Dangerous self-satisfaction
There is nothing more frightful than ignorance in action.
- Johann Wolfgang von Goethe
Howard Johnson’s, MCI, Enron, Pan American World Airways, Digital Equipment Corporation, Marshall Field’s, and the litany of the half-forgotten could continue. Whether willful victims of their own misbehavior or ignorance of the changing needs of their customers and markets, these former market leaders have died the most tragic of unnecessary deaths. They thought they were at the far right of their market’s respective performance bell curves, living in gloriously smug self-satisfaction, and they were punished for it.
The problem with that kind of delusion is that the most obvious contrary data will be ignored until it is too late. I’ve seen clients, thinking that they were indestructible, behave in ways that were completely contrary to their best interests because they refused to believe their previously unassailable market position was not only in jeopardy, it had evaporated. They stuck to their old product lines, offering the same levels of distracted customer service, while their industry competitors passed them by, embracing innovations at all levels of their organizations.
There are some in venture capital circles who will tell you, “If you are not growing, you are dying.” They refer specifically to revenues more often than not. For the adage to be true, a more expansive view of growth is required. Growth need not only be found in revenues, it may also manifest in broader service sets, expanded ranges of customers, and wider social impact, among other factors. The self-satisfaction that comes from past success gets in the way of this pursuit because it usually means we don’t seek out those innovations we need to survive and thrive.
Applied ignorance
No one is satisfied with his fortune, nor dissatisfied with his intellect.
- Antoinette Deshoulieres
Self-satisfaction is not the only path to innovation entropy. Success also reinforces a mindset of superiority. Each success reinforces a belief across an organization that the collective choices made and actions taken are the result of superior intellect and application. Which is fine, except the psychological tendency is to ascribe all success to our direct efforts, regardless of actual impact. We all think we’re above average and smarter than the next person in the room, or our competitors, or worse yet, our customers. (Good grief.)
There is a great saying in the USA: “Even the blind squirrel will eventually find a nut,” which highlights how arbitrary and capricious success may sometimes be. Especially if we are not vigilantly seeking ways to improve and extend our success through innovation.
Proctor and Gamble, under its previous CEO A.G. Laffley, recognized the flaw in perceiving that all success could be derived from within the company. P&G had, for many years, actively practiced ignoring ideas from outside the company, literally living the phrase “not invented here.” They refused to consider the possibility of good ideas existing elsewhere. Under Laffley they defeated this mindset by embracing the idea of “proudly found elsewhere,” which meant that they were willing to use the best ideas no matter where they came from.
The self-awareness of the limits existing within a company were neatly expressed by a CEO who, when talking to his staff, said, “The smartest people in the world are not working for us.” The implication being that if you want smart, look beyond the limits implied by the company’s legal and operational boundaries and the intellect it contains. To innovate at home, look elsewhere. (Open innovation, anyone?)
Certain incompetence
One of the painful things about our time is that those who feel certainty are stupid, and those with any imagination and understanding are filled with doubt and indecision.
- Bertrand Russell
Perhaps the most brutal self-deception that undercuts our ability to innovate both at an individual and collaborative level is represented in the Dunning-Kruger Effect. Justin Kruger and David Dunning proposed that, for a given skill, incompetent people will see themselves as heroes in their own story. They tend to overestimate their own level of skill while failing to recognize genuine skill in others. When faced with the extremity of their inadequacy, they also fail to recognize it, often explaining it away due to circumstances beyond their control.
There is relief from this delusion. If a person is able to recognize and acknowledge their own previous lack of skill, they can be trained to substantially improve, provided they have the will to address their shortcomings. This is hard work. Faced with this level of effort, is it any wonder that most people prefer to not change, instead continuing their certain incompetence by ignoring it altogether? At this point a passing reference to the Peter Principle might be warranted, but a trip down that path will only lead us to despair.
Don’t despair. Andy Grove popularized one approach to the vigilance necessary to maintain a posture of innovation-driven success. His book Only the Paranoid Survive offers a reminder of what it takes to be successful. To overcome self-satisfaction, and the over-estimation of our abilities, keep striving to be better, to improve, to transform. In the application of consistent efforts toward renewal, not only might you beat your averages, but you might find that innovation becomes the foundation for your enduring success.
How do you prevent yourself or your organization from becoming too self-satisfied?
Innovation & Memory – Recollection plays havoc with our innovation efforts
May 28, 2010 by Andrew (Drew) · Leave a Comment
The true art of memory is the art of attention.
- Samuel Johnson
The news is shocking, but true. Memories are fictitious! And it seems the more we call on them the more likely they are to bend and shift over time. Most of us have snapshot memories – those memories formed by extraordinary events. For some it might be their wedding day, or birth of a child, or a hole-in-one while playing golf. Unfortunately, for most of us, the most commonly shared snapshot memories are usually formed by catastrophe and disasters widely reported in the media. 
As clear and detailed as these memories seem to us, as we reflect on them and share them with others psychologists find they are surprisingly inaccurate. Our inaccurate recall influences how we respond when facing similar circumstances; which means our memories can be quite detrimental to our ability to effectively innovate.
Hand me my rose-colored glasses
Memory is deceptive because it is colored by today’s events.
- Albert Einstein
When bringing new products to market the stories of success told within an organization often fail to capture the impediments to success along the way. Our tendency is to believe that the decision making processes in organizations are robust and analytical enough to prevent biases. We gather data from a variety of sources and build our product portfolios based on “the facts”. However, even if someone has sought and assessed the alternatives for investment in a neutral manner, they may still remember data selectively to reinforce their expectations. This effect is called selective recall, confirmatory memory or access-biased memory.
There are conflicting psychological theories about selective recall. Schema theory predicts that information matching prior expectations will be more easily stored and recalled. Some alternative approaches say that surprising information stands out more and so is more memorable. Predictions from both these theories have been confirmed in different experimental contexts, with no theory winning outright. What is more interesting is the influence our remembering of past success holds over our current choices.
In remembering our previous successes Karim Nader, a neuroscientist at McGill University in Montreal, has established a theory stating that the very act of remembering can change our memories. This theory runs counter to the established perspective that once a memory is formed it remains largely intact. Even more challenging is his statement that our most vivid memories are actually prone to the most change over time. He believes that it may be impossible for humans or any other animal to bring a memory to mind without altering it in some way. Like an old magnetic audio tape (remember those?!), the more times it is replayed the more degraded the sound becomes, our recollections are “rewritten” back to memory in a different part of the brain and somewhat altered by the way our recollection was triggered.
When we remember the successful delivery of a new product or service to market, we may be miss-remembering the circumstances around that release. Our memories, influencing our present choices about innovation opportunities selected for funding and development, may actually be leading us astray. How we fondly remember our past success may reinforce our positive attention towards products or services we think are similar our past successes. This blinds us to present risks and may jeopardize our intended outcomes.
Refusing to make the mistakes of the past
Many a man fails as an original thinker simply because his memory is too good.
- Frederick Nietzsche
This unwittingly biased view of the world cuts both ways. Where our remembered successes might trigger us to attempt to repeat them, by neglecting the hazards we had to overcome, our remembered failures might steer us away from what might conceivably be future successes. Hindsight bias comes into play and each recall of our failed efforts not only reinforces their impact, and our desire to avoid repeating them, it serves as the basis for predicting future failure. In addition, when we set aside our memories as they are re-written back into our synapses the new research suggested that they are changed. That change is often an amplification of the extent of the remembered failed attempt.
The pattern of confirmation bias is our tendency to prefer information that confirms our preconceived notions of how circumstances might play out, regardless of whether they are true. It may sometimes be used to encapsulate the following three cognitive biases by which people can reinforce their existing attitudes toward their innovation efforts: by selectively collecting new evidence that highlights or exaggerates the risk involved with a new endeavor, by interpreting evidence in a way that is biased towards finding hazards in the attempt, or by selectively recalling information from memory about our past failures and applying that to the present situation.
Where sometimes our memories influence us to see the world as full of possibilities, they can also hinder our ability to take the appropriate risks that are necessary for all innovation. Our fear failure, influenced by our remembered failure can prove just as detrimental to our mistaken memories of success.
Memories are additional data – treat them as such
We cannot change our memories, but we can change their meaning and the power they have over us.
- David Seamands
If the process of creating memories and remembering is so fallible, how can we minimize its impact?
One method is to be clear about the data being used to influence decision making. Make your thinking visible so that inherent biases may be called to account. When conducting an assessment of alternatives, be sure to seek counsel that is external to the decision making team especially if that team is long-term and has a wealth of shared experience. To avoid the undue influence of memory biases seek people who have different perspectives and experience. That experience will be rooted in different memories and may help mitigate over-reliance on our personal and collected recollection of what we think may have occurred.
Another method for combating our fallible memories is to directly address the amount of risk involved in the innovations we choose to pursue; our memories provide context for the risks we perceive in the present. We can address that risk by using short interval delivery strategies. This approach creates milestones that are much closer together (rather than months, usually weeks, or even days in high risk scenarios) and the scope of work being completed is usually more contained. This enables us to keep our focus on the present performance of our innovation efforts
As a practice in innovation, rather than relying on our memories to influence our choices, perhaps it is best to focus on making new memories. What do you think? How do your memories influence how you innovate?
Innovation Perception – the joys and disappointments of expectations
May 19, 2010 by Andrew (Drew) · Leave a Comment
It is one of the commonest of mistakes to consider that the limit of our power of perception is also the limit of all there is to perceive.
- C.W. Leadbetter
The best phrase to capture the spirit of innovation is not, “Eureka!” as some would have us believe. That is more appropriate for the instant of invention. Rather the most fitting phrase for innovation is, “that’s interesting…” 
This fits because it is through the discovery of the unexpected while we work toward solutions addressing our most wicked problems that we begin to tease out the most robust ideas. The willful focus on meeting our expectations is the next cognitive bias that we must address as we seek to build a culture that supports innovation. We are prisoners to perception when we must strive to be open to the possibility of surprise.
Punished for trying
Blessed are they who see beautiful things in humble places where other people see nothing.
- Camille Pissarro
Perceptions are often erroneous. Yet, we base much of our decision making on our perceptions of circumstances. Those perceptions are driven by our expectations. The errors of our perception may be systematically related to interpersonal expectations (what we want from each other or anticipate from each other), our in-the-moment motives (our expectation of need fulfillment), value patterns (what we expect to attract us, repel us, what we prize or disregard), and our personal defense mechanisms (our emotional defenses triggered by our previous experiences brought to bear on current circumstances by our present expectations.) With all this going on, all the time, how the heck do we even get out of bed in the morning?
We psych ourselves up to it. This is a true challenge especially when we expect to be punished for our failures.
In a recent Q&A session conducted by the good folks at 800-CEO-READ, Mark Frauenfelder the Editor in Chief of Make Magazine talked about how the current education system is designed to prevent discovery through failure. His approach is to throw oneself directly into the path of failure, as often as possible in order to be “effective.” Frauenfelder sees that the inability to make mistakes is tied directly to the expectation of poor marks unless perfection is attained…
Students are afraid to make mistakes in class because errors result in bad grades. Striving for a “perfect score” takes your mind off the real goal, which is to learn and to be effective. In organizations we are afraid to make mistakes because a mistake is a convenient way for others assign blame. A fear-based workplace discourages risk-taking and experimentation. The worst mistake is to punish people for making mistakes in the pursuit of doing something in better way.
In innovation, if we tie our efforts only to an expectation of success, then our efforts will become smaller over time. Each attempt will have less at stake. We will risk less, because the anticipated blame associated with any failure is too much to bear. And who likes to be punished for trying?
Say…what’s a mountain goat doing way up here in a cloud bank?
People only see what they are prepared to see.
- Ralph Waldo Emerson
Our perception can also make it difficult to see the circumstances around us. There is a classic Gary Larson cartoon drawn from the perspective of looking over the shoulders of two pilots out the cockpit window. The caption reads: “Say…what’s a mountain goat doing way up here in a cloud bank?” Funny and frightening. But this is also emblematic of how our expectations can cause us to miss large perceptional indicators. Our minds are unable to wrap themselves around such a disconnection between what we expected to see and what we actually see.
Rather than seeing that something is different to what we expect, we develop a blind spot to it. This perception bias has been identified for many years. One of the earliest examples was in research conducted by Seymour Smith, an advertising researcher from the 1960’s who saw that people were screening in and out what they were seeing and hearing based on what their expectations were. He noted that,
“They do so because of their attitudes, beliefs, usage preferences and habits, conditioning, etc.” People who like, buy, or are considering buying a brand are more likely to notice advertising than are those who are neutral toward the brand. (Source)
More recently this research was bolstered by the work of doctoral student Alison Jing Xu and her research partner Robert Wyer of the University of Illinois, College of Business. Their research focused on the examination of the power of puffery. Scott Berinato brought this to light in his recent post at Harvard Business Review, The Power and Perils of Puffery, in which he described their experiments in assessing the influence of the perception of their subjects in relation to subjects about which they were familiar or not. As cliché as it might seem, they structured their questions for men around beer and for women they focused on a personal care product, a cleansing gel.
In both situations where the subjects felt they were familiar with a particular product, they were less likely to be influenced by puffery in support of that product. Unsubstantiated claims were a turn-off. But when they were unfamiliar, they were more accepting of the unverifiable claims. It seems expectation, derived from past knowledge and experience, determined what was acceptable or not. When there were greater unknowns, puffery won the day.
How is this reflected in innovation?
Innovation is the attempt to create a new solution where none are known. It seems that when we are faced with the unknown we are more inclined to rely on our unquestioned perceptions, which rest on our expectations, rather than seek to push and explore to seek a deeper understanding. Unquestioned perception is an impediment to innovation because it limits possibilities.
It seems, as with so many other cognitive biases forewarned is forearmed. If we know we are predisposed to perceptional bias that is half the battle. Our awareness of that bias is a signal to dig a little deeper, question a little harder, and fail a little more a little more often. After all innovation is not about any single eureka moment, it’s about the next interesting discovery just beyond the horizon.
If the doors of perception were cleansed, everything would appear as it is – infinite.
- William Blake
Innovation Framing – the challenge of blinkered thinking
May 10, 2010 by Andrew (Drew) · 1 Comment
Two quite opposite qualities equally bias our minds – habits and novelty.
- Jean de la Bruyere
The life of the mind has such a significant bearing on the ability to innovate. We know that a fruitful mind is fundamental to the applied creativity and invention of innovation. Our time and attention are studiously focused on the creative spark, the genesis of new ideas, and the process of ideation. In this effort the mind can be stubborn, unwilling or simply distracted. 
Recently we explored the power of anchoring and the ways it can prevent us from abandoning an idea that is past its prime, or how it might prevent us from seeing the value in a different perspective, or the usefulness of another’s fresh take. Unfortunately that is only one of many ways in which our minds can prevent us from being truly, madly, deeply…innovative.
It’s my hilltop and everything looks fine from here
We don’t see the world the way it is. We see the world the way we are.
- Anaïs Nin
We think we are broad-minded and open to new ideas; actually, we look where we’re told and think in circles. Now, I’m not saying that we are all sheeple. But a little deluded about our good selves? Absolutely. There is a whole world of marketing that is based on self delusion.
Consider the concept of “green washing” – essentially the habit of nefarious companies painting a thin film of environmental friendliness on their products in order to appeal to our better natures. Oh, and sell more of their stuff. It’s objectionable. It’s dishonest. And it works a treat.
Why?
Well, many of us like to think of ourselves as being good stewards of the environment, as long as it doesn’t require too much effort. Those who recycle everything, have taken to growing their own food bio-dynamically in their backyards and have forsaken their cars for other communal or less aggressively carbon-footprint-enlarging forms of travel are among the minority. A vocal group, yes, but small. The keen but passive majority wants being “green” to be easy.
Willing and eager companies meet that need by framing their products in ways we immediately relate to. They use terms like, ‘eco-friendly’ and ‘energy efficient’ and use colors that evoke Spring days and clean lines. The contents of the packages are not so different as their ‘bad’ alternatives but because of the way these products are framed for us, we buy them. Often that purchase is at a premium. Because “it’s good for the environment” and we want to do good.
When it comes to how we see the world, we are the heroes of our own stories. We consider ourselves immune to marketing and yet statistically we fall prey to the same well-positioned point-of-sale display in the supermarket as the next person. We like to think we are open minded, but as was illustrated in the movie “Crash” we have deep-seated biases and prejudices that flash to the surface without us realizing it.
You really want to see the world the way it is? Really?
Bias and prejudice are attitudes to be kept in hand, not attitudes to be avoided.
- Charles Curtis
We don’t want to see the world the way it is. In fact we have a whole series of techniques, cognitive biases, which we have developed to help us not see the world the way it is. They are there to help us cope. To help us sort through the nearly infinite number of sensory inputs we experience each day so that we can make meaning of our surroundings. Framing is simply one other dominant device in the bias tool kit.
If anchoring locks us into a particular perspective, preventing us from seeing something differently, framing has an opposite effect. Framing is a set of personal filters, emotional, psychological, and intellectual constructs that we use to gather, sort, organize and analyze information about the world around us. Frames are our mental blinkers. The shades that focus us on what we think we really want to be thinking about. Framing influences the background context of our choices, often as simply as in the way in which a question is worded.
Framing enables us to act with ‘pseudocertainty’. It eliminates or lessens doubt as a way of short-cutting our need for analysis. The old saw originated by Mark Twain, that there are “lies, damned lies, and statistics”, is another representation of the way in which framing occurs as it reveals the persuasive power of numbers. A key issue with framing is that it may be acted upon us, via marketing or through a desire to influence, or we may frame issues ourselves through our beliefs, education, ethics, etc.
How does framing influence innovation?
As a process of short-cutting our need to analyze or explore a situation or issue more deeply, especially our understanding of the immediate context, framing blinds us to possibilities and options. We simply don’t ‘see’ alternatives because of the influence of framing. We look where we’re pointed or only where our blinkered perspective will allow.
A classic example of this is from the work of Nobel Prize winner Daniel Kahneman and his partner Amos Tversky. (We’re big fans of Kahneman and Tversky at Primed Associates!) They offered a group of research subjects two scenarios, both with essentially the same data but framed differently. In it, the subjects were asked to make a choice between two alternatives. Due to the way the scenario framing changed, the majority of subjects flipped their choices. Same data, simply re-framed meant a very different result.
I am committed to my strategic focus on…Oh look! Kittens!
When you change the way you look at things, the things you look at change.
- Max Planck
Framing is a psychological version of the Heisenberg Principle in action. In quantum mechanics, the Heisenberg uncertainty principle states “by precise inequalities that certain pairs of physical properties, like position and momentum, cannot simultaneously be known to arbitrary precision. That is, the more precisely one property is known, the less precisely the other can be known.” For the lay person – when you focus and look at one aspect of a situation, other aspects become less clear. Framing positions us to understand one perspective which lessens the impact, influence or even visibility of another alternative. We get blinkered.
We need to fight being framed. (Or stop taking our own framing at face value.)
In innovation, it is necessary to see things we haven’t seen before. To combat the influence of framing, to expand the range of possibilities, it is necessary to call it out. Questioning assumptions is one way of addressing the undue influence of framing. Another way is to literally take the opposite position on data. If we reverse our position previously unseen options might be revealed. As our perspective greatly determines what we see, changing that perspective means we see things anew. Finally, we can often build our way out of how we are framed by exploring new approaches through design thinking and prototyping. A prototype is a great tool for helping us reframe our view of a challenge.
What’s your perspective? How blinkered are you?
Innovation Anchors – How unwitting fixation blocks delivering new ideas to market
April 30, 2010 by Andrew (Drew) · Leave a Comment
What people want isn’t always what they really want.
- Andrew Ellis
Using focus is a powerful technique for getting things done. It narrows our efforts and gives us a specific target to meet. A dancer, who has been asked to spin in place uses a technique called 
“spotting” to provide a stabilizing point of focus. Spotting has several benefits: it keeps a dancer oriented and aware of the movement, direction, and location of their body in space; it can prevent disorientation caused by lack of visual focus; it increases the overall speed of the rotational spin; it can make the spin appear faster than it is; and it also aids in reducing the dizziness associated with spinning. All of which are excellent goals that serve a purpose during particular sections of a dance that require that motion.
Using spotting to anchor yourself at other times while dancing may not be appropriate.
Find a spot then [re]turn to it
The challenge with focus is that once established it can be hard to break off, even when it might be best to turn our attention elsewhere. We have become anchored to an idea, such as, sticking with a new product in the marketplace when all indications are that it will not be successful. Or, always using the same criteria for selecting services to be developed even though market conditions and customer expectations have changed.
For those who seek to innovate this pattern of anchoring is deadly. For the oft-quoted but rarely ascribed comment bears truth of the matter, “if we always do what we have always done, we will always get what we always got.”
Falling in love with your own idea
Often during decision making, people anchor, overly relying on a particular piece of information or a specific value. This anchor then influences the way they account for other variables in the situation, regardless of any specific relationship between them. Usually once the anchor is set there is a bias toward that value. And each of us is prone to this pattern.
In organizations where ideas battle it out for supremacy, we can find ourselves furiously defending our position when the alternative may be better. We have fallen so in love with our own idea that we cannot see the power of another and perhaps we cannot see the power it holds over us.
One recent example of a whole industry becoming anchored (in the belief that the good times would continue to roll) was the financial services industry with regard to credit default swaps. Much has been written on the subject, such as the great post at Psychology Today is by Eric Jaffe. A great line boils down the entire sorry episode quite neatly, “…that our bubble wasn’t just one of bad investing, it was a bubble of bad thinking.” Rouler less bon temps, indeed.
The process of becoming anchored is not hard work either. We fall into anchoring with relative ease. It is one of our shortcuts for managing the large amounts of data with which we have to contend everyday. And once we anchor on a specific data point it is very difficult to change as Dan Ariely describes in his instant classic, Predictably Irrational. Early on in his book Dan describes an experiment with some students in which he asked them to take the last two digits of their social security number and write them beside a list of objects he provided on a sheet of paper. The objects were wine, chocolate, etc. Nothing of special significance. He then asked the students if they would pay more or less than that number (as expressed as whole dollars) and to indicate that on the paper. Finally he asked them to write down what they would be willing to pay for reach object.
We simply keep coming home
The end result of the Ariely experiment was that those who’s social security end numbers were 0-19 offered the lowest price points while those with social security end numbers from 80-99 offered the highest. And everyone in between offered graduating prices! When asked if their social security end numbers had any influence on the prices they offered everyone said absolutely not. Yet those very numbers anchored each group of students as surely as if they had been classified as such from the outset.
The students couldn’t help themselves because they didn’t even know what had occurred.
But even if they had known about the concept of anchoring another classic aspect of this behavior is that even if we do change our perspective and re-orient ourselves we fall back into an anchored state. We switch one anchor for another. Essentially clinging to our need for a mental shortcut.
Fighting the good fight
I am like a book, with pages that have stuck together for want of use: my mind needs unpacking and the truths stored within must be turned over from time to time, to be ready when occasion demands.
- Seneca
For those focused on innovation, willfully introducing changes into existing stable systems, anchoring is one of many behaviors that needs to be addressed. Because at its heart an anchor is a habit we have created for ourselves. Either through repetition or proximity we have placed ourselves under its influence.
To tackle the effects of anchoring you have to call it out. Unless we do highly rational people will make decisions based on the highly illogical. Past experience, ill-considered under present circumstances. According to social psychologist Tom Pyszczynski, “when our livelihoods are threatened we lock into our current mindsets, ignore open discussion, and view those with opposing ideas not as different but as enemies.” When we seek to innovate, to explore new concepts we need to give ourselves the permission to leave old mindsets behind. This takes practice.
One excellent way to practice is the use of design thinking. Design thinking provides a structured way to explore new ideas to pressing challenges in a manner that is low-threat, yet high yield enough to push the envelope. An excellent recent explanation of design thinking as a model and practice comes in IDEO President and CEO Tim Brown’s book, Change By Design. Full disclosure: I now a reseller of a business simulation based on the design thinking approach developed by IDEO and ExperiencePoint. More on that later.
So, when you stop spinning are you dizzy or ready to weigh anchor to focus on the next new thing?
Twitter: DrewCM
- Last few days in Australia before returning to the USA. Great trip.
- Greetings from Uluru / Ayers Rock! Where it is raining but the views and surroundings are spectacular. (And the internet access is spotty!)
- Better late than never: #innochat Transcript – 19 August – Innovation Backwards? With thanks to @CASUDI & @Renee_Hopkins http://ht.ly/2tOe3
- For those looking for #innochat transcript this weekend - it is coming - just a little slowly due to the time difference! (mine, that is)
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