A couple of weeks ago I found myself talking with three school teachers. They were young – 22 and 23 years old. Two were finishing their first year of teaching and one was finishing her second year. 

I enjoyed listening to their excitement and consistent theme of caring about their students and wanting them to succeed in life, whatever they decided to do.

But, there was another consistent theme in this conversation: Frustration.

They didn’t want their enthusiasm to slowly drift away. They felt that their ideas and ways of teaching were not getting attention, or worse, being ignored, and they were being excluded in the education process for current and future educational needs and development. 

According to these young teachers, burnout among new young educators usually comes within their fifth year of teaching because of the reasons mentioned. Keep in mind, these are adults. By 2020, they will represent more than one out of every three adults (36 percent). They are ethnically diverse, socially tolerant, and technology savvy.  This generation’s unique blend of civic idealism and astute pragmatism will hopefully enable them to overcome the internal culture wars and institutional malaise. 

Executives, managers, teachers, healthcare providers sometimes experienced bad luck or poor timing, but a large body of research suggests that may be by cognitive and behavioral biases. While techniques to “debias” decision making do exist, it’s often difficult for these individuals, whose own biases may be part of the problem.

There are tools and techniques that can help flag times when the decision making process may have gone awry and interventions are necessary. 

Early researches suggest this is the case roughly 75 percent of the time.  (McKensey Quarterly, April, 2015, Phillip Meissner, Oliver Sibony and Torsten Wulf.)

Sibony says, “We have looked at this zoo of biases and tried to sort out what really matters.  When people ask me what will make a difference as they build decision processes, I emphasize three things:

• “First, recognize that very few decisions are one of a kind.  Lots of projects happened before, and you can learn many things from these experiences.
• “Second, recognize uncertainty-have alternatives, prepare to be wrong, and have a range of outcomes where the worst case is real and not ‘best case minus 5 percent,’ which is very common.  Creating a setting where it’s ok to admit uncertainty is very difficult.  But if you can achieve that, you can make headway.
•  “Third, create a debate where people speak up.  It’s the most obvious but also the most difficult.  If you’re the decision maker, when you get to the debate you’ve already got an idea of where you want it to lead. And if you’re an experienced executive, you’ve already influenced your people, consciously or unconsciously.  A good intervention point is to ask subordinates if anyone disagreed with you about a recommendation they bring to you.  If everybody agreed, that’s a sign that many may have been ‘groupthink.’”

Soras Sarasvathy, a professor at the Darden School at the University of Virginia, has researched the difference between how entrepreneurs and very good senior managers at Fortune 500 firms think. She gives them a scenario about a new-product introduction.  The typical Fortune 500 manager will run projections from the market data.  But the entrepreneur’s reaction is, “I don’t trust the data. I’d find a customer and try to see the product.” The entrepreneur’s reaction is, “I’m gonna experiment. I’ll find my way into it.”  The entrepreneurs’ impulse to experiment is right. We need to breed more of this type of thinking into decision making.

Two particular types of bias weigh heavily on the decisions-confirmation bias and overconfidence bias. The former describes unconscious tendency to attach more weight than we should to information that is consistent with our beliefs, hypotheses, and recent experiences and to discount information that contradicts them.  Overconfidence or bias frequently makes executives misjudge their own abilities, as well as the competencies of the organization. It leads them to take risks they should not take, in the mistaken belief they will be able to control outcomes.

The combination of misreading the environment and overestimating skill and control can lead to dire consequences. Consider a decision made by Blockbuster, the video-rental giant, in the spring of 2000. A promising start-up approached Blockbuster’s management with an offer to sell itself for $50 million and join forces to create a “click-and-motor” video rental model. Its name? Netflix. As a former Netflix executive recalled, Blockbuster “just about laughed [us] out of their office.” Netflix is now worth over $25 billion. Blockbuster filed for bankruptcy in 2010 and has since been liquidated. 

In retrospect, it is easy to ascribe this decision to a lack of vision by Blockbuster’s leadership. But at the time, things must have looked very differently. Netflix was not the the video-on-demand business it has since become. There were practically no high-speed broadband connections of the kind we now take for granted, and widespread use of video streaming would have seemed like a futuristic idea. In Blockbuster’s eyes, Netflix, with its trademark red envelope, was merely one of several players occupying

a small land thus far unprofitable mail-order niche in the video business. Kind of like the Sears, Roebuck & Company catalogue of the past vs. online ordering now.

In an environment of change and disruption, many leaders fear – correctly – that their organizations do not take enough risks or will fall prey to “analysis paralysis” and let opportunities slip away. Hence the popularity of start-ups as role models of fast, iterative decision making. As Reid Hoffmann’s often said, “If you are not embarrassed by the first version of your product, you’ve launched too late.”

While this “better safe than sorry” mindset characterizes many successful startups, it may not be the best inspiration for the strategic decisions of mature organizations.  Some risks are worth taking, such as those taken knowingly, in pursuit of commensurate rewards. But some risks are taken recklessly because the risk takers are blind to their own overconfidence or have failed to consider alternative viewpoints.

As the founder and president of J William Appling LLC, healthcare and management and consulting firm, I have greatly tweaked my business model.  Have you? 

Bill Appling, FACMPE, ACHE, is founder and president of J William Appling, LLC.  He is a national speaker, presenter and a published author.  He serves as an adjunct professor at the University of Memphis and is on the boards of Hope House and Life Blood.  For more information contact Bill at j.william.appling@outlook.com.