Why do we fail to act on major trends that are “hidden in plain sight”?

The centerpiece of corporate innovation is to a large extent the ability to differentiate from competitors delivering value in unprecedented ways to a large segment of customers. This could be the result of a technology edge, a well-oiled innovative business model or even a culture that translates into always better service than competitors. To be successful leaders and companies need to have insightful reading of the environment and major trends and act on large opportunities.?

This is easier said, than done. I have developed both a skeptical and a respectful awe when I hear predictions about the evolution of a technology, business, or economics. Predicting the future and acting on it at the right time and with the right amount of energy is one of the key predictors of successful innovators. However, most people end up being followers or storytellers. Working with innovation takes courage, as very few emerge as clear winners, while most are followers or, even worse, big losers in the competitive game of business.

With the abundance of information that every individual has at its fingertips with the internet and social media how is it possible to differentiate and make “smarter” moves before everyone else in your field? Why are some people and companies able to predict a future that few foresee and act upon? These questions occupy my mind often. We, as society, often marvel at the entrepreneurial geniuses that surprise us all. Then collectively and even explosively through social media tales, many of the stories about these entrepreneurs become legends that go from fact-based to pure fiction. After a while it′s not even possible to distinguish the truth from fake news.

Let′s go back to the root causes of why we often get things so wrong even if many people, particularly in the corporate world, have a reasonably good ability to analyze information, facts and data. From my days as an academic in knowledge management, I call attention to traditional biases that most people have in their mental process without thinking much about them. These are the most obvious ones:

• Past as predictor of the future bias: It′s almost impossible to escape this bias. In a way, and for most things, this processing saving mechanism developed over millennia has helped humans avoid dangers. We apply this to business more often than we think, without self-questioning.
• Hindsight bias: Or Hindsight is 20/20 basically states that most people, and I must say, often academics, make it very simple to explain something after it has happened, ignoring how hard and complex are the decisions when one is in the middle of tough challenges and decisions.
• Confirmation bias: It′s so interesting to see this bias across all aspects of life. Maybe, the most visible one is related to politics, news, and social media. We, if few exceptions, are drawn to information sources that confirm or reinforce our own beliefs. In the world of social media and news agencies, TV shows, etc, this becomes evident with captive audiences. In business, however, the same biases clearly exist as most people tend to rely not only on information, but people that think like themselves, creating a vicious circle or even bubbles of understanding of reality.
• Anchoring bias: Another bias that I have seen at play over many years is when people select one piece of information that drives most of their predictions about the future and base their decisions on this first (anchor) piece of information, not given credit to how such variable might change over time or how other variables are as important as their first anchor point.
• Statistical biases: “Lies, damn lies”. Results from statistical analysis can often bring in many biases. The most trivial is the difference between correlation and causation. Often though, many other biases are part of the model: sample representation of reality, key variables are not considered, emerging variables are considered not significant, data gaps, mistakes or even fraud, among many more. Many people, however, are impressed by very simple descriptive statistics, particularly if shown in beautiful graph in a slick power point presentation.
• Overconfidence bias: Maybe a synthesis of all biases, this bias refers to the fact that many people overestimate their ability to predict future outcomes based on their limited personal experiences, relationships, and access to data.
• Danger vs Opportunity bias: It′s well-known that humans have ingrained a strong reaction to danger, but not so much in terms of opportunities. While disruption is often “hidden at plain sight”, most people and many leaders do not feel personally threatened by technology disruption. Often, they see, comment, discuss in meetings, but not very significant commitments are made to steer the big ships, i.e., corporations.

With all these biases and others, it′s no wonder that only very few leaders and innovators can overcome them convincingly and push ahead major transformations in their industries. We stay in awe when we hear the successful stories of giants such as Bill Gates, Steve Jobs, Jeff Bezos, and Elon Musk just to mention the most famous ones. As said above, Hindsight is 20-20 and after these amazing entrepreneurs break new ground and create their stories most people recount them with analytical precision and logic. However, when one is in the middle of transformations reality is much messier.??

These amazing innovators that we see at various levels of society seem like stars that float among all others. The question most of us should ask is not whether we can learn to be them. The question for me and I guess for most people working with innovation should be: can we become much better at overcoming our bases, forecasting the future and acting decisively upon our insights? What kind of traits, behaviors and leadership styles can increase the chance that our organizations will, somehow, become more innovative and maybe, even disruptive? It′s certainly no easy task and standard recipes and formulas are bound to fail as do most attempts at radical, disruptive innovation. Thus, even with this caveat, I′d give it a shot on a list that we could aspire to emulate.

The first trait most innovators have in common is an amazing ability to be comfortable with uncertainty. Nobody likes uncertainty, but many people avoid it at all costs. Some dread it. Innovators, however, display a certain confidence that no matter what the challenges, solutions will be found, and human ingenuity will prevail against all odds. And this self-confidence, true or not, is spread and drive the energy of their followers: investors, peers, employees, suppliers and so on.

Curiosity and Action-driven Learning also seems like a general trait of most disruptors. Predicting the future is super hard. One way to overcome this challenge is, somehow, not to predict, but kind of interact with the future as it unfolds. It′s like the famous phrase “the man in the arena”. Innovators not only have great curiosity and insatiable desire to learn, but also an eagerness to explore and experiment. They learn about the world and with the world. The study, they act, they reflect almost in a continuous feedback loop. I would describe this as action-driven learn. They don’t just learn as a separate task. Acting is part of learning.

The tales of invention, research, innovation, and entrepreneurship share how often the early results were disappointing and how huge obstacles and direct oppositions had to be overcome. The trait that comes to mind in this context is summarized in the word Resilience. Innovators often shown an amazing display of patient, grit, perseverance to keep pushing ahead, probing and testing ways to overcome initial poor results. In the world of entrepreneurship sometimes this is referred as “pivoting”, an ability to, sometimes, make a wide turn on strategy to achieve the desired objectives.

One last trait of large-scale innovators I′d like to highlight is both an individual and a group trait. Innovators do not mind being challenged in their thinking. In fact, they thrive in groups that include cognitive diversity and where vigorous debate is the norm, not the exception. As part of their lifelong learning pursuit, they tend to be open-minded and always seeking either confirmation or rebuttal of their convictions. It′s easier to say than to enjoy this kind of organizational environment. It can bring discomfort. Depending on how it′s done or received debates can be hard to sustain while maintaining mental health.

?Referring to the initial questions of this short article, my point here is that major transformation opportunities are kind of “hidden at plain sight”. How many articles, reports, social media postings and many other sources of information do we receive about Emerging Technology Trends, Emerging Social Trends, or Major Economic Shifts? Everyone seems to be overinformed these days. Having information or even knowledge is no longer such an important competitive advantage. It seems to me that the ability to filter the clutter, select a niche or a large-scale opportunity, and put an ambitious plan into action seem to separate the giants of innovation. These famous innovators seem to do this with a level of easiness that leave most of us in awe looking from the sidelines. I am often in disbelief of how they do it. How do they actually do it? What about you?

#innovation #knowledgemanagement #cognitivebiases #leadership #entreprenuers #learning