It Just Ain’t So
When I read a wonderful quote from Mark Twain a few days ago, my mind flashed back to my recent missive Be Curious. The quote started off the current copy of the exceptional newsletter that Paul Sloate, CEO of Green Drake Advisors, sends out regularly. Sloate is a great financial thinker and writer with a wonderful sense of humor and slant on how what’s going on in the world affects financial issues and your investments.
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Mark Twain
Twain has added a twist to my commentary on the poor decision making that comes from thinking you know everything. Those who aren’t caught in the ridiculous conceit that they know everything still can easily wind up with the same problem: poor decision making based on an inability to realize that what you think you know might be wrong.
I’m often struck by the way that experienced and successful executives become so confident in their infallibility that they drive their organization over the cliff. They forget that each decision they make is a unique event. Making some, or even a lot, of good decisions in the past does not mean that all your decisions going forward will be as good.
Often the opposite seems to be true. Taking off on Twain’s thought, too many good decisions in a row leads to your knowing for sure things that are no longer true. Basing decisions on things no longer true is the path to destruction.
Too many become stuck in their knowledge. They become unable to realize that it’s not that it would be nice to learn more, it’s a necessity. What you know that often worked well in the past now leads you into becoming a sad story in the history books.
Too many executives spend their resources trying to hold off the future. Instead of getting in front of the curve and using their extensive resources to lead the way they’re being dragged kicking and screaming down the trail. Being dragged kicking and screaming means letting others race past you, letting others build the future and grab the business and profits going forward.
It reminds me of Blackberry. Knowing that they had the best cell phone in the world led their executives into making horrible decisions and so giving the future to Apple and others.
Giving away the future…a recipe for disaster.
My old Blackberry
Steve – it isn’t so much a conceit as it is a well-known neuro-pyschological phenomenon called the Confirmation Bias. That’s a fancy way of saying that we are all (including both you and me) wired to accept information that reinforces or confirms our existing understanding of how things work, while rejecting (as not possibly true) information that conflicts with this understanding.
There’s a good evolutionary reason for this. We are wired to look at the world around us and find patterns that explain how things work. Without this, we would be living in Groundhog Day – rediscovering everything, every day. So the Confirmation Bias serves a useful purpose. But it also does great damage because it causes us to get locked into beliefs about how things work, and to stick with those beliefs in the face of lots of evidence to the contrary. This is an increasingly severe problem as the pace of change accelerates.
Bottom line – in my strategy consulting days, every client I ever had hired me because the world had changed so much that their established belief system no longer enabled them to be successful. And all any of them ever wanted was for me to tell them that the belief system was still OK and that the reality they were experiencing wasn’t reality. That led to some difficult conversations.
Last thought – best case of Confirmation Bias ever. All cars have the ignition switch on the right side of the steering column. Except Saabs. You drive a Saab (recently impaled by construction equipment). I used to drive one. Saab put the ignition switch on the floor of the center console. They did this because they discovered that when the key was hanging from the steering column, it could cause knee injuries in accidents. So they moved it. Result – safer car. Sadly, this was not enough to keep them in business. One of the funniest experiences ever is tossing the key to a parking valet who has never been in a Saab before. They keep trying to stick the key into the steering column because they KNOW that this is where the ignition switch is. I’ve seen guys jab and jab and jab because it just ain’t possible that the switch could be somewhere else.
Oddly, I wrote about Confirmation Bias in a missive some months ago. Not so oddly, I can’t seem to locate it. Basically…what Dan Wallace said.