Being bold and strategic in business means allowing your beliefs to be constantly challenged and having an open mind to learn new things. In a post at his blog, risk manager Chris Matts introduces the idea of failure bias—a healthy search for information that might show your beliefs are wrong or your strategies are failing. There are two points to remember in adopting failure bias in business:
- We actively look for information that refute our beliefs. We need to see failure.
- We construct experiments that optimize our learning rather than prove that we are right.
Avoid Sticking to the Status Quo
When we do something wrong, our first natural reaction might be to refute our wrongdoings and find information that rationalizes our behaviors. This is an act of confirmation bias. In doing business, this attitude will not lead you to the top of anywhere, because you are not willing to change when others are adapting to new rules. Successful companies are those who innovate by seeking to change “how things get done around here.” Failure bias might differentiate traditional businesses and modern businesses, and determine who will get knocked out and who will stay.
We also learn the most when our uncertainty is greatest:
We learn the most when the chances of success are 50/50. When developing products we have two phases, the first is to learn about our customers, and the second is to exploit that learning. During the learning phase, the experiments should be focused on learning (50/50) rather than confirming our belief. This is a huge challenge in risk averse cultures where failure is not tolerated. Executives in risk averse cultures should focus to ensure that there is a healthy balance of failure and success. During the learning phase they should ensure that confirmation bias does not obliterate learning. Given the nature of risk averse cultures, they should hold up a lack of failure during the learning phase as the worst kind of failure.
Don’t be stubborn in adhering to old things that don’t work just to keep your ego. It is okay to admit that you are wrong, and it is important to escape your own bubble to see what the world has to offer. People who are not afraid to fail and who are willing to learn to stand up again deserve respect and admiration.
You can view the original post here: https://theitriskmanager.wordpress.com/2017/01/22/introducing-the-failure-bias/