Remember all the things as a young child that you knew to be fact but later on found out weren't quite so true?
Things like, every night a monster lives under my bed. When I grow up, I'm going to be a movie star. If I wish upon a star, all my dreams will come true.
Conventional wisdom says that as we grow older and wiser in the world, we lose the ability to pretend, that by the time we reach adulthood, we forget all about how to make stuff up and spend the rest of our lives in dull reality.
As adults, we have an even greater capacity to make stuff up. And we use this enhanced capacity all the time. The only problem is that we tend to use our imaginations in negative ways as well as in ways we don't recognize as fantasy.
In the business world, we constantly make stuff up based on deep-seated beliefs and assumptions we hold about our customers, competitors, markets, employees, and the business world in general. In a stable world, this doesn't pose much of a problem. In a world where constant change represents the norm, it can wreak havoc on our businesses.
The problem is not that we have assumptions and beliefs; it's that we rarely take the time to examine them. In today's world, if the information that we "know to be true" has been in our heads longer than six months, there's a good chance it is no longer valid or is only partly true anymore. So we go around acting and making decisions based on information that may or may not be true.
MSUs (making stuff up) occur in every organization. But at no time do they have more impact than during the strategic planning process. Here are some of the most common and harmful MSUs I have encountered:
- Ambiguity effect: The avoidance of options for which missing information makes the probability seem unknown.
- Bandwagon effect: The tendency to do or believe things because many other people do the same.
- Confirmation bias: The tendency to search for or interpret information in a way that confirms your preconceptions.
- False consensus effect: The tendency to overestimate the degree to which others agree with you.
- Herd instinct: The tendency to adopt the opinions of others and follow the behaviors of the majority in order to feel safer and avoid conflict.
- Hindsight bias: The inclination to see past events as being predictable.
- Illusion of transparency: The overestimation of others' ability to know you and your ability to know others.
- Information bias: The tendency to seek information even when it cannot affect action.
- Mere exposure effect: The tendency to express undue dislike for something merely because you are not familiar with it.
- Planning fallacy: The tendency to overestimate task completion times.
- Projection bias: Unconsciously assuming that others share the same or similar thoughts, beliefs, values, or positions as you.
- Self-fulfilling prophecy: The tendency to engage in behaviors that elicit results that will (consciously or unconsciously) confirm your beliefs.
- Status quo comfort: The tendency to like things to stay relatively the same.
Keep in mind that MSUs operate at the unconscious level. People don't stand up in meetings and say, "Hey, even though I disagree with everyone, I'm going along with the crowd because it avoids conflict and makes me feel comfortable!" But the MSU is definitely there, lurking just below the level of conscious thought. And it has a real impact on people's behavior.
When MSUs rear their ugly head, goals get set too low or too high. Opportunities are missed. Changes in customer needs and expectations get overlooked. Planning assumptions are made that have no basis in reality. People choose the status quo over change that needs to happen. Strategic initiatives get launched that have no chance at success. The list goes on and on.
How can you avoid, or at least minimize, the impact of MSUs? And how can you support your clients in recognizing and minimizing their own MSUs?
Start by becoming aware that MSUs exist. Acknowledge that you, your clients, and employees still have very active imaginations that you use all the time. Then make your thinking process transparent. During the planning process, put everyone's beliefs and assumptions about your customers, competitors, and markets out on the table and challenge them. Ask, "What do we think we know to be true? Is it still true? If not, what has changed and how do we need to respond to that change?"
Turn the dial on your MSU meter from negative to positive. Strategic planning involves imagining a future for your company and planning what needs to happen in order to get there. Instead of focusing on problems and what you can't do, turn your imaginations toward what you can do. Instead of saying things like, "We can't do that," or "That will never work," try asking, "What if our assumptions are wrong? What if we did it this way...?"
In today's business world, it may seem like monsters are everywhere, just waiting to steal your customers and devour your business. But in reality, they live inside organizations, feeding off the MSUs that leaders and employees make up every day.
The question for today's business leaders is not, "Are we making stuff up?" It's, "What are we making up and how does it impact our decisions and actions?"
So, what are your business "fantasies"? What are you making up?