The psychology of being wrong

WrongPerhaps it is the financial crises or the fact that despite our incredible advances we are realising more and more each day that there are lots of things we do not fully understand (Google ‘scientific consensus‘ or read the Wired Article on the ‘What we don’t know‘) but somehow there seems to be a lot more introspection even, in unlikely places like the business world.

Harvard Professor Rita McGrath has written a couple of articles on the topic, covering Tata’s scheme to incentivise failure and Google’s willingness to get it wrong (a lot). Kathryn Schulz’s TED talk ‘On being wrong‘ sums up the issues very well. It is worth a watch.

The world of strategy if famously littered with ‘wrongness’, some we see immediately and at other times we have to wait a while before we cannot believe how wrong things have gone.

Scenario planning when used as part of the strategy process ensures that as Steward Brand said, rather than being exactly right, we are more importantly, not wrong.

In fact right and wrong is perhaps too simple. Carveth Read in 1898 probably said it best when he said “It is better to be vaguely right than exactly wrong.”

To get to the point of not being wrong we do need to embrace the fact that wrong is an option.

Confirmation bias is the tendency to avoid information which doesn’t suit our worldview. Unless we are able to embrace being wrong (even a little bit) when designing strategies we are not looking at the full picture and are likely to be surprised.

Without introspection and challenging our blindspots we are unlikely to find complete solutions to our strategic thinking challenges.

We often believe more analysis and better information leads to better strategies. This is not the case. Strategic thinking is more dependent on the psychology of the people creating the strategies, and their ability to be both right and wrong in their thinking.

What Google can learn from Microsoft about strategy

Microsoft’s filing last week of a complaint against Google with the European Competition Commission is somewhat cynical considering their own competition woes and their failed strategy to thwart the accusations of the competition authorities on both sides of the Atlantic. In the end they paid billions of dollars in fines and their reputation was damaged.

By attacking Google through the European competition authorities Redmond is acknowledging that despite their strong business position they are worried enough about Google to take their fight into the regulatory space, a bit like a child running to the teacher to report the unfairness of another when things aren’t going her way.

Google would do well to think strategically about their approach to both the Microsoft attack and the European competition authorities. Perception is reality and at the moment Google still holds the perceptual high ground. They can hold onto this high ground by thinking through how their approach will impact both perceptually and legally.

As Microsoft found out, a purely brute force legal denial of the accusations did little to alter perceptions and in the end they nearly faced break-up at the hands of the authorities. Google are in the fortunate position to be able to learn from Microsoft’s mistakes and to take a strategic approach which helps them not only survive the attack but also maintain the perceptual high ground.

Customer driven CSR

Customers have become somewhat cynical about corporations attempts to give back to their communities through CSR programmes. Leading CSR thinkers like Wayne Visser of CSR International have even said CSR is dead.

This makes US based Home Depot’s decision to embrace their customers in their giving campaign particularly gutsy. The companies 260,000 Facebook members can vote on their fan page for the projects that they want the firm to fund in their “Giving Back” campaign.