Cognitive Bias

Cognitive Bias

 

In this article, Robyn M. Bolton illuminates how our personal bias comes into play with the co-creator syndrome and how it can affect innovation.   

When I was a senior in college, I took a pottery class. 

One of our assignments, before learning to throw on the wheel, was to create a functional piece using slabs of clay.  I designed an Alice in Wonderland-inspired vase and built something that somewhat resembled the design.

Obviously impressed by my innate talent, the instructor offered to teach me a special glazing technique that used highly toxic chemicals to create…well…I stopped listening as soon as I heard “toxic chemicals.”  It was dangerous, so I was in.

The result was a rather misshapen (not Alice in Wonderland-inspired) vase that looked like it was made out of chunks of rusted metal.

I loved it!

My roommate hated it.

She declared it the ugliest thing she ever saw and forbid me from placing it anywhere in the apartment where she might have the misfortune of laying eyes on it.

To this day, she swears it’s the ugliest thing she’s ever seen.

I display it proudly on the bookshelf in my office.

It would be easy to explain our different reactions to my work of art as simply the result of different aesthetic preferences.  And while there may be some truth in it, I suspect the better explanation is the IKEA Effect.

 

Key points include:

  • The Ikea effect
  • Meatballs and lingonberries
  • Objective governance

 

Read the full article, The IKEA Effect is Creating Zombies. Here’s How to Fight Them, on the MileZero website. 

 

 

Karen Barth explains why the majority of consumer products and corporate transformations fail due to cognitive biases. 

Why do 80% of the 30,000 consumer products launched each year and 70% of corporate transformations fail?

Often business leaders are blinded by cognitive biases, which seriously affect their decision-making – and, as a result, the revenues and welfare of their companies. It can be hard to see these biases from the inside.

Take, for instance, one of Britain’s largest food companies. The CEO and other senior leaders were looking to expand into a new market – in this case, the U.S.

I worked with them to gather data, conduct customer research and review every aspect of building a food business in the U.S., from distribution channels to marketing. A key part of the planning process was focus group research, to be held in five U.S. cities.

I’ll never forget sitting in one such city on the other side of a large one-way mirror with two senior leaders who were assigned to work with me and my team on the expansion strategy. Within minutes of the group’s start, I saw expressions of shock on their faces.

The facilitator was trying to get twelve American participants to taste steak and kidney pie, one of the most popular dishes all of the U.K. They saw with their own eyes that the Americans wouldn’t even taste it. I witnessed one senior executive scream at some of the participants, he was so frustrated. “Just taste it you idiots.” he yelled at the Americans from behind the sound-proof mirror.

 

Read the full article, Doesn’t Everyone Think (and Eat,) Like I Do? A Taste of Bias, on the Cognitive Edge website.

 

Umbrex is pleased to welcome Himanshu Sharma with Avolve Group.  Himanshu has 15+ years of experience across strategy and operating roles across both in industry (Citi, Capital One) and consulting (4+ years at Monitor Deloitte Strategy), serving medium-large global clients. Himanshu has particular expertise in financial services and insurance, with a functional focus on strategy, new product solution development, partnerships and product marketing / go-to-market. He lives in Jersey City, NJ with his wife and daughter, performs stand-up comedy in his spare time and is patiently waiting for the New York comedy clubs to re-open.

Himanshu would love to collaborate on digital and business transformation growth projects.

Umbrex is pleased to welcome Mike Mortensen with Tandem Analytics. Mike has advised business leaders at the intersection of strategy and technology for more than a decade. His experience in business transformation comes from three perspectives: business strategy at McKinsey & Company, machine learning implementation at IBM, and as a business executive responsible for growth at a global conglomerate.

Prior to Tandem Analytics, Mike led teams of business consultants and data scientists to support IBM clients in developing analytics and AI transformation programs. He partnered with clients from concept to realization, including algorithm development, pilot program design, technical integration support, and overall program management. Mike has advised business leaders on AI and analytics strategy across industries, including telecommunications, finance, industrials, retail, and health care.

Before joining IBM, Mike was a Director of Strategy & Innovation at Wolters Kluwer, where he led digital transformation for a B2B portfolio company. To improve customer centricity, he launched a portfolio of initiatives, including machine learning for segmentation and customer behavior insights. Early successes with pricing strategy and customer segmentation fueled transformation efforts across digital marketing, as well as increased personalization of sales and service.

 

Sean O’Toole explains why there will be no going back to normal and why the current disruption provides opportunities for companies that can redefine themselves for the future.

The world post-COVID19 will be very different from [the one] we just left a few weeks back!

Each crisis has brought dramatic changes in consumer, business and social behavior. At the time, some of the changes accelerated what was already in motion. Others were entirely unanticipated.

Whatever changes this crisis will wrought will take time to play out. However, there will be no return to business-as-usual.

We Are All Changing Right Now!

Consumers, employees and businesses are adopting to this our new reality at speed. We have no choice.

 

Read the full article, COVID19 is Your Permission To Shift To The Future, on LinkedIn.

 

 

Luiz Zorzella shares key points that can help leaders evaluate and address their approach to change to ensure better outcomes. 

Strategy & Value

For the past 10 years, financial services firms have publicly acknowledged that they needed to change.  Chances are, your organization was one of those.

Commoditization meant a systematic erosion of margins for banks; reduction in interest rates has been challenging both interest and non-interest income sources of banks and investment firms as well as the economics of insurance; and technology has posed a constant threat of disintermediation and radical value-adding substitutes.

However, just like the proverbial frog in the heating water, most business leaders have responded incrementally – aiming at matching the pace of change they observed in the market and improving their results within the parameters of their existing business model.

The problem is that change has arrived and it does not look like we expected.  While COVID-19 ravages lives, economies and markets, clients and stakeholders alike are looking at financial service firms and asking that they help them weather the storm. They are calling you to change with them.

 

Points covered in this article include:

  • Find you calling
  • Evolve and decommodotize
  • Reforge your ways of working
  • Take the technology plunge

 

Read the full article, Is this Crisis Your Strategy Crucible, on the Amquant website.

 

Umbrex is pleased to welcome Rezzan A Kose. Rezzan is an operations, organizational design, and strategy leader and the founder of Ares, a boutique advisory and consulting firm. Before starting her own practice, Rezzan was the business product owner of an AI-based technology platform at Citadel, a global hedge fund.

Prior to that, Rezzan was an Engagement Manager at McKinsey & Co. focusing primarily on business transformation, process redesign and operations across different sectors including financial services, insurance and pharmaceuticals. Along with client services, she was also the deputy COO for McKinsey’s internal advanced analytics center, overseeing day-to-day operations and execution. Earlier in her career, Rezzan worked as a research fellow at Goldman Sachs covering energy sector and commodities.

She lives in New York City and plays polo competitively.

 

Luiz Zorzella shares a survival guide to Clay Christensen’s opus, including impressions, recommendations, and thoughts on how business leaders can use his ideas to drive success, growth and transformation.

If you work with innovation and strategy and are responsible for the future of your business, you probably read Clayton Christensen’s 2 most famous opi: The Innovator’s Dilemma and Competing Against Luck (aka the “Jobs To Be Done” book). 

If you have not, do it and you will improve your chances of not going extinct.

Over the years, I had the chance to see some of the concepts described in these books applied in real-life situations.  Some of these applications were successful and rigorous and confirmed my admiration for the amount of impact compacted in such simple concepts.  

However, more often than not, I have seen the concepts, approaches, and terminology he formulated deformed, mutilated and distorted into grotesque parodies – both intentionally and unintentionally.

 

Content in this article includes:

  • Competing against luck
  • Agree on what is an useful insight
  • Know thyself and avoid mirages
  • Think 2 steps ahead
  • Find the heart of darkness

 

Read the full article, Survival Guide to Clay Christensen’s Opus, on the Amquant website.

 

 

Robbie Kellman Baxter shares a story about her favourite bookstore and how it provides a great example of the Membership Economy in action.

When a Menlo Park bookstore was economically threatened, the community stepped in and created a membership program to improve long-term sustainability. 

Founded in 1955 by peace activist Roy Kepler, Kepler’s Books is a large independent bookstore. After its founding, it quickly became a center for intellectual thought and community discussion for the people living in the suburbs surrounding Stanford University. Over the years, the bookstore moved to increasingly larger locations, until it found its current home in downtown Menlo Park, California. Kepler’s is a neighbor to many of the Membership Economy pioneers featured in this book. After its move to Silicon Valley, many of the most innovative and successful investors and entrepreneurs frequented Kepler’s as a favorite browsing destination. 

By 2005, however, the bookselling landscape had changed, due in large part to the innovations of online retailers like Amazon. On August 31, 2005, Kepler’s Books closed its doors.

 

Read the full article, Kepler’s Books – A Story of a Local Business and the Membership Economy, on LinkedIn.

 

David A. Fields explains why correct assumptions can quickly become wrong, and how to test the assumptions of your consulting practice to create new opportunities.

You throw your best efforts into delivering value for your consulting clients, improving your consulting firm’s marketing, and creating a rewarding consulting environment. Then you find your work was off by a bit. Or more than a bit. Or completely wrong. Pickles-in-peanut-butter wrong. That’s no fun.

Alas, I have bad news for you and me: we’re mistaken. About everything.

I also have good news: our mistaken assumptions represent a huge opportunity for our consulting firms.

 

The article identifies nine signals that could transform your consulting practice, including:

-Unexpected success signals

-Unexpected failure signals

-Closely held belief signals

-Two transformative questions

 

Read the full article, Signs Your Consulting Firm Is Operating on Faulty Assumptions,  on David’s company website.