Tuesday, April 21, 2015

Overcoming Cognitive Roadblocks On the Road to Innovation

By: Elliott Wilkins

The Power of Persuasion

Being persuasive, is useful to everybody at some point or another in his or her life. This can often be challenging, whether you are trying to convince your child to brush their teeth, or attempting to persuade an entire business unit to adhere to a new recycling policy. In both these cases the advice is mutually beneficial, however because the reward is not imminently obtainable it can be difficult to get people to listen.

When it comes to implementing innovation at an organisation, there are many people who need to be persuaded, and understanding the psychological mechanics behind this can be very useful. This article will highlight the issues of ‘cognitive bias’ and ‘bounded rationality’ as outlined by Daniel Kahneman, Amos Tversky, and Herbert A. Simon, and discuss how these issues can impede upon decision-making and innovation.

The Storm at Sea

Technological disruptions continue to create waves that are being felt across all vertical markets, and the collaborative economy is undeniably here, however many organisations are less than willing to embrace this natural evolution of communication. Firms that have enjoyed a position of relative market security are less aware of the danger, and it is the management and shareholders at many of these firms who must urgently be convinced to take action.

There are some vessels on the edges of this storm that might be able to stay afloat with a minimal amount of effort. However with effective persuasion, every captain and crew can take action that will steer their respective ships towards safety and prosperity. The most innovative captains already know, that there is always room for an extra sail to be added to the mast of the ship.

All-Aboard! Convincing the Captains

When any problem is noticed, the first people who need to be informed are those is in a position to take action. With regard to business, it is the managers, chief executives and decision-makers who must take the first steps towards making a change. First of all these individuals need to be convinced  that a solution is necessary, however more importantly they need to be persuaded to participate in the solution once it is implemented.

A survey of global business executives from 2007 discovered that a successful innovation initiative is defined by leadership participation; there was a strong correlative relationship between a lack of leadership engagement and a lack of success. This shows clearly how important it is to persuade managers and executives to “jump on board” when it comes to innovation.

Convincing the Crew

Once a solution has been decided upon by management, it almost always relies upon subordinate participation for it to be successful. Employee engagement is an issue that has been well documented recently, and it is an especially crucial factor when instilling a new business process.

Human resource managers are well equipped to prepare employees for changes within an organisation, and these specialists should be fully utilized whenever possible. However, when a HR representative is lacking, it is the responsibility of all managers to lead by example. Ensuring that employees are ready to embrace the change rather than resist will allow an invaluable innovation culture to flourish.

Cognitive Bias: Theorizing Bias

Israeli-American Psychologist, Daniel Kahneman, has outlined over the last few decades a multitude of pitfalls that can pose a risk to anyone who is attempting to make a decision. These pitfalls, which he refers to collectively as “cognitive bias”, are especially relevant in business where decision-making is the crux of both success and failure.

There is no legitimate way to force people into believing that you are right, and it is always worth considering that you might very well be wrong. However there are some psychological roadblocks that it is useful to be aware of, when it seems as though the laws of logic are not being followed.

Combating “Confirmation Bias”

“Confirmation Bias” is a bias towards information that affirms pre-existing ideas or experiences, and causes a distrust of new options. This can potentially occur when describing a new initiative to a colleague or employee for the first time. If there is a pre-existing framework that a new proposal clashes with, then the individual will potentially disregard the new idea without giving it a chance. Many people are subconsciously adverse to disruption, and so this can be a big stumbling-block when it comes to convincing both the “captain” and the “crew."

An interesting way of tackling the issue of confirmation bias is to present an argument “disfluently”. A study at the University of Illinois in 2012, identified that confirmation bias is “attenuated” when the idea is presented to the individual in a way that is difficult to interpret. This might seem counter intuitive, but when someone is required to put effort into understanding a concept, they are sometimes more likely to be objective and rational in their analysis of it.

For example, “innovation” is a buzzword that may cause some people to reject a proposal without fully considering its benefits. However if they were to hear an explanation that does not step on this verbal landmine, then they may well see things differently. This technique is about using diversion to give somebody a new perspective on an idea, and for this reason it can be very effective.

Heuristics: Bounded Rationality

“Most humans are only partly rational” is the postulation of Cognitive Psychologist, Herbert A. Simon, who also argues that making the “correct” decision is almost always inhibited by one of three factors: Cognitive ability, information availability and temporal availability. He argued that to make decisions in circumstances such as these where rationality is bounded, many people use shortcuts which he referred to as “heuristics.”

The term “heuristic” was borrowed by H. A. Simon from the field of computer science, where it is used to describe a problem solving technique that prioritizes speed over accuracy. While this methodology may be useful in computer science, its application in matters of business should be drawn into question.

Contagion Heuristic

When making a decision, people will often look at the history of the person, item, or company in question and reach illogical conclusions based on this information. For example in sport, it is very common to make judgements about players based on their association with a certain team, rather than their actions. While this has come to be expected considering the competitive nature of sport, it is undeniably an irrational way of formulating an opinion.

This guilty-by-association fallacy can swing both ways, as something can also be great-by-association. When discussing the merit of a company, it is common-practice to look at their previous customers and form an initial judgement based upon that list. While this can sometimes be a useful way of ascertaining the strengths of an organisation, it is not necessarily indicative of a superior or inferior product.

This issue can be complicated, as sometimes a great-by-association heuristic can work in your favour. However if you take advantage of this circumstance in order to promote an idea that you are personally invested in, then you yourself are committing a form of cognitive bias by allowing your idea to evade rational evaluation.

Availability Heuristic

The “availability heuristic” affects millions of people across the world every day; some of them are afraid of sharks while surfboarding, some believe that is worth buying a lottery ticket. The theory is that an event seems a lot more likely to occur, when you perceive examples of someone experiencing the consequences of the event.  People are often more easily persuaded by the cognitive availability of a single relatable story, rather than statistical probability.

This technique might not always be easy to incorporate into a business proposal, however if it is possible then it can be very effective. So while it is always good to also have numbers on your side when preparing an argument, it is wise to remember that humans innately prioritize emotional evidence over numerical evidence.

Weathering the Storm, Revolutionising Sailing

In 1902 a German ship called “The Preu├čen” revolutionized sailing by utilising steam power to assist in the handling of winches, hoists and pumps. This made every process much easier and reduced the required number of crewmen from 257 to just 48. This is comparable to the benefit that can be achieved through the company-wide use of an innovation management platform.

Innovation software such as this does not act as an extra sail on the ship itself, but instead identifies potential new sails that can be added, while simultaneously increasing the efficiency of all existing sails and crewmen upon the ship. The benefits can be far reaching; whether the platform is utilised to exploit technological disruption and identify new revenue streams, or to make crucial cost-savings through incremental process improvement.

Cruising to Safety

There are a variety of initiatives that organisations can undertake in order to combat market disruption and achieve continued success. Consultants can be hired, strategies can be made, and funds can be redistributed; but the results of these actions are usually confined to a specific department, business unit or geography. Innovation management can provide universal benefit.

Innovation is invariably at the source of the turmoil that is leaving many companies bankrupt, so the logical solution for organisations who are in danger is to fight fire with fire, and develop innovative practices themselves. Innovation leads to maximized productivity, efficiency, and profit, and an innovation management platform facilitates this by harnessing the collective intelligence of any target audience.

Whoever needs to be persuaded, and whatever they need to be persuaded of, it is useful to bear in mind the theories and techniques outlined in this article. This is not intended to be a cheat-sheet to getting what you want, or a 101 in hypnosis, but instead a propagation of objective rational decision-making and healthy discourse. If everyone is able to understand and overcome these hurdles then the world will be a much happier, healthier, and wealthier place.

To discover more about “cognitive bias” see here.
For “bounded rationality” see here.
For “innovation management” see here.

About the Author: Elliott is a Commercial Manager and Marketing Assistant at Qmarkets; a company that provides fully configured Innovation Solutions to organisations across the globe. Born in Birmingham, he graduated with a degree in Journalism and Media Studies from Bangor University in 2013, and is passionate about communication, culture, and “the great outdoors.” He can be reached at ewilkins@qmarketsglobal.com or @Qmarketsglobal on twitter.

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