Ignore Your Ignorance at the Cost of Innovation and Growth
Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.
~ Daniel Kahneman
In business, you ignore your ignorance at the cost innovation and growth.
Just as psychoanalyzing oneself if fraught with peril, in business, a deeply experienced leadership team makes it almost impossible for the organization to comprehend the risks of NOT transforming the business.
Experience makes one really great at assessing the risk of doing it, but horrible at assessing the risk of NOT doing it.
In order to grow, innovate and accelerate, experienced leadership teams need to turn to outside support to expose opportunities and innovations hidden by their ignorance and blinded by their knowledge.
As Thomas Oppong points out in his article Make Tough (And Smart) Decisions With These Timeless Principles
An impressive amount of empirical research backs up this observation. Taking an outsider's perspective has been shown to reduce decision makers’ overconfidence about their knowledge (Gigerenzer, Hoffrage, & Kleinbölting, 1991)
Blind to Disruption
There are countless discussions about how startups like Uber, Airbnb or Netflix disrupted huge entrenched leaders. We are enamored with these stories, as we should be. They prove there’s always progress being made.
We love these entrepreneurial category-killer stories. But at Room 214 we’re also fascinated by the anti-hero in these stories – Organizations like Marriott, Hyatt and Blockbuster.
How, with all their resources, experienced leadership and high-profile board members did they not see, recognize or capitalize on those category disruption opportunities themselves?
One could chalk it up to confidence bolstered by their industry knowledge and a lack of humility shown by ignoring their ignorance.
Finding Humility
Talking to newly won and lost customers is the fastest way to shatter knowledge-based ignorance.
As much as a company thinks they know about customer motivations, as much as the data and analytics tell them, there’s no single digital data source to reveal the social, emotional and societal trends pushing customers to make progress in purchasing or seeking new solutions.
Understanding the progress new customers are trying to make, how they're using or hacking your product/service, what societal pressures they're working against and why they're switching gives insight to new customer or product categories.
Stop staring at the data. Pick up the phone and talk to a customer.
Assessing Risk
Think about the risk of not talking to your customers. Because the person developing the next disruptive category is trying to solve a problem or find a solution your company isn’t offering.
Would you put $100K on advertising and customer acquisition, or a 100 hours talking to customers to find out where the new customers are going to come from?