David Chinsky founder of the Institute For Leadership Fitness a leadership thought leader and my friend created a post that we shared on this site last week that focused readers on Mistakes Were Made (But Not By Me): Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts, author Elliot Aronson.
David reminded us of:
• Our tendency to look for only confirming evidence of what we already believe.
• Our strong tendencies to protect ourselves.
• Distorting our own memories to justify our views of almost anything we find important in our lives.
• Individuals employ self-justification, allowing them to express their true beliefs (whether it is a study result or a prejudice).
• Individuals employing self-justification continue to feel they are moral and good.
And reminded us of a lingering example from the recent past:
The Lancet, a respected medical journal, reported in 1998 that a positive correlation had been found between autism and childhood vaccines. As a result, many parents stopped vaccinating their children, at great risk to their children and to other children in the herd. Six years later, most of the scientists involved in the original research that led to this finding retracted their conclusion and identified the lead author as having had a conflict of interest he had not disclosed.
In the world of a Chief Revenue Officer (CRO) applying Revenue Science™ the “Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts” is the two-edged sword with one edge that cuts away those obstacles that seem impossible to overcome to all but those who have the “Foolish Belief” of ultimate success. The sword, when swung the other way, makes Myths, Bad Beliefs and Business Bubbles solid foundations to build on and then suffer from.
To overcome the Confirmation Bias in the world of “Revenue Generation” is no different than other parts of life. When a CRO is practicing Revenue Science™ in the real world the most important tool in disrupting the Confirmation Bias is the frame of reference used.
Our tendency is to use our know and comfortable frame of reference to justify and then to look for confirming evidence for what we already believe we know. When a next step is important but not clear decisions will be driven by fear, competition, selfishness, scarcity, or hate vs. when the focus starts with an objective or third-party frame of reference – like an ideal customer’s frame of reference. Being open to the frame of reference of others (customer’s, staff and partners) about what they believe is true and/or best, is an element of innovation and growth. When emotions like fear or selfishness are the motivation, outcomes based on abundance are excluded. If the driver for decisions and actions is to protect ourselves, we must build a “self-view” as a person of integrity who is RIGHT. In business, this creates a Confirmation Bias, which is always dangerous and often fatal. The following are examples where the HQ (Head Quarters) Confirmation Bias should be replaced by transparency, scientific methods-based research and continuous learning (CRO Thinking) – in other words the application of Revenue Science™ is the “Safest Way” to limit or eliminate Bias in the short-term and the long-term.
*HQ Thinking exists in organizations from one person to thousands. It is thinking based on myths, partial truths, “common sense” or any other thinking that starts at the center of the selling organization’s leadership of historic culture rather than starting at the “Ideal Buyer’s Frame of Reference.” The most dangerous HQ bias comes from a singular focus on the seller making money “from” the buyer rather than “with” the buyer.
Three examples of HQ (Head Quarters) Confirmation Bias
Customer Intimacy – is an HQ Myth where smart people in an HQ organization develop self-serving technology, products, pricing, go-to-market business models, services and support systems that create the greatest value for the customer (without the customer even knowing it). Part of the bias is that all customers in a niche buy the same way and since they receive the same value, they will pay for the same level of value imagined by the HQ organization, without consideration of the problems, buying preferences or goals of the buyers.
Then when the customer is not responding to the HQ offer it is because the product was not explained to the customer fully or there needs to be pricing incentive to launch the relationship.
Revenue Science™ separates customer intimacy from customer’s frame of reference. Customer Intimacy is understanding how to motivate the buyer to buy based on fear, bubbles, myths or emotion. The customer frame of reference is thinking like and feeling like the customer to clarify best options “with the customer” in order to fashion offers, products, and business relationships that are not just about fulfilling a fad or spec but make the buyer’s world better (safer, more profit, faster growth, goal achievement, etc.) than any other choice.
Market Strategy – is another Confirmation Bias Myth driven by HQ thinking. When an HQ organization is in a bubble where buyers are buying based on scarcity, fad or herd mentality HQ thinking says fulfillment and customer value are the same. This bias impacts most strategic planning. The thinking goes that HQ knows what offer the buyers want to buy (the buyer bought it in the bubble), what offer fulfills the buyer best interest and how much that offer should cost the buyer. HQ then builds a strategy to deliver that offer to the buyer and pitches this offer explaining why this is what the buyer needs no matter what the buyer thought.
Today customers get to choose between what HQ thinking offers, which makes the most money for the HQ organization or those organizations who commit to and offer the customer a partnership earning both organizations the best (more profitable, safer, etc.) outcome possible for now and for the long-term.
Business Planning & Execution – HQ thinking is fueled by the fact the organization has been successful. The organization has made money and grown, which confirms the HQ strategies of the past must have been based on good logic and well implemented. HQ is sure the past success is that combination of good logic well implemented by the bus full of handpicked “best people”. These “best people” have been placed in their seats (silos) and given budgets, resources and activities to execute for achieving the silos part of the strategy. Based on HQ’s confidence that they know what to do and what will be achieved by the “best people” executing in their silos. If the silos don’t achieve their goals someone got on the bus who should not be there.
Technology (Google, social media, digital marketing, etc.) has given the market and buyers transparency into HQ organizations. When HQ organizations are thinking and executing to advance their organization, they plan on receiving more value from the customer by upselling, cross-selling, greater wallet share, etc. The buyers in today’s market will separate that organization from one with a “worthy intention” and commitment to make their buyer’s world “better” with a business promise supported by observed execution.
As the technology continues to support a buyer’s ability to make more informed decisions about who brings them the greatest value today and for the long-term as well as who is a committed partner vs. a transactional vendor focused on the most profit that bias based HQ business model, will be harder and harder to sustain.
Confirmation Bias in general and HQ thinking specifically will remain a challenge for organizations and buyers. Applying CRO Thinking and Revenue Science™ provides buyer value judged by the buyer’s problem solved. Myths, bubbles, fears and self-interest will always be the enemy that feeds the confirmation bias for some both driven by and resulting in Foolish Beliefs, Bad Decisions, and Hurtful Acts or in the language of Revenue Science™ “Dumb Stuff”.
Revenue Science™ is the “Safest Way” to avoid “Dumb Stuff” and the damage from confirmation bias of all types. Go answer the Five Revenue Strategy questions which will align you and the value you bring to your ideal buyers and the problems they are compelled to solve, then keep your buyer’s frame of reference as your True North. Then follow Revenue Science™ the “Safest Way” to continuously improve your buyer’s world and yours at the same time.
You still may make a mistake but never from the “wrong frame of reference” and buyers who are your partner will not only forgive you but help you fix it.