When a large organization tells me that they have "confirmed their strategic position with research" I am immediately skeptical because that sentence doesn’t provide me with enough information.
I dig a little deeper by asking a not so simple question: Was this research conducted after you decided on your position or before?
This question is important because when it comes to research, I have found that organizations, and individuals, tend toward a confirmation bias. Once they have decided that something is true, or they have selected a position, they tend to seek research that confirms that position and eliminate research that contradicts it. We see this regularly in the debate on climate change. Last week’s issue of BusinessWeek (September 5, 2011) discussed this topic in great detail as it examined various political positions on this topic and found that the most honest response to the debate has come from the insurance industry which has now factored in significant climate change to their risk models, as well as to their advisory positions go so far as recommending recovering wetlands. I don’t know for a fact, but given my work with insurance companies, I doubt that they went into their analysis with a bias toward confirming the "truth" of climate change because an incorrect bet either way, hurts them.
Politicians have been known to dissemble about risk because voters don’t generally like to hear bad news. The insurance industry makes its money telling it to you straight—how long you’ll likely live, what price your home will fetch, whether to repair or trade in your car. For this reason it’s worth noting that insurers already factor climate change into their models for measuring, pricing, and distributing risk. Insurers have no incentive to lie. If they are more scared than they should be in pricing risk, shareholders will punish them. If they aren’t scared enough, nature will do the job. (from Bloomberg View: On Climate Change, the Market Has Spoken; Alan Krueger’s Assets – September 5, 2011)
If an organization does, as the scientific method prescribes, explore their positions as a set of hypotheses to be tested, proven, and often disproven, then they are more likely to at least be open to alternative positions prior to claiming one. And even after claiming one, they will be aware of the tentative nature of that conclusion because some of their hypotheses may not have been disproven, just set aside. Unlike scientific hypotheses that are either right or wrong based on experimental evidence (we can leave M-Theory and cosmology out of this for the moment) strategic positions against an uncertain future don’t have a right or wrong answer until some future time. This means that it is critical that research be continuously conducted in order not to confirm, but to track trajectories.
As a scenario planner, I also insist on context. Any research that supports a one dimensional exposition of the future is not meaningful. I don’t want to imply that organizations should not own an official or hero future against which they execute, what I suggest is that part of the execution is a feedback loop that provides early warning as to assumptions in the hero future that may not be playing out as presumed. Focused on pure execution, an organization may miss the subtle hints and noise in the signal that offer insight into changing conditions, and perhaps even foresight into how those conditions may eventually manifest, at least for a time.
Research needs to challenge rather than simply inform. Research needs to be a feedback loop, not a reinforcement of position. Above all, research needs to be empowered to look at the edges for incoming change, rather than an inward facing wall to protect the status quo. If the status quo is right and necessary, challenging assumptions will reinforce and strengthen positions because any position that can survive such a challenge will prove its robustness through the process. If however, and this what many organizations seek to avoid with the confirmation bias, their assumptions about the world may not be correct, that they need to reimagine and adjust priorities, investments and strategies—then they have tough work ahead that will transform the people doing the work as much as the external forces are reshaping the industry in evolution. Those who realize this early will be able to assert competitive advantage through anticipation and differentiation – and even though it may be expensive, it isn’t as expensive as catching up later.
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