I had another late night meeting last week, where my firm was involved in helping a company evaluate a decision to an upcoming product launch. Sorry for not being able to provide details; maybe one day. While we presented data, evidence, and insights in a ‘compelling’ (the client said it, really!) way, the resolution to their rather big pricing decision was still fuzzy. That’s because what they needed to do to move forward, was to revisit whether the current ways of thinking still made sense for the future.
At any conference table in business today, there’s the execs and leaders who themselves represent any organization or function. But always there – yet invisible like the childhood friend of early years — is the creature called the ‘organizational bias’. It’s a little gremlin of sorts.
It might be burly and prickly, or soft and cuddly. It might known be entrepreneurial, or stuck in control systems, or even the NIH syndrome. But any organization has a gremlin of its own. In my 6 years of doing this consulting thing, I’ve observed that the gremlin is typically tied to a company’s history, and what makes it tick. It’s fundamentally the set of things that have helped it be good at what it’s good at (if they are successful) or not. Without acknowledging this little gremlin, most companies can’t move forward. Because the organizational bias is part and parcel to what decisions get made and in what direction.
An example: When I worked at AutoDesk, the inherent bias of the organization was that AutoCad (their main product) was central to design processes of engineers worldwide, and effectively couldn’t be displaced. “It was and always shall be.” But the reality was that other good companies (SolidWorks, etc) were doing more features built on the design usages of a particular set of customers. And there were companies doing a ‘light’ version that solved 90% of what most engineers and designers needed. And so, slowly but surely, existing customers were ‘trying out’ the new solutions either because it was simpler or it was more robust. If AutoDesk (and specifically Carol Bartz, the CEO) hadn’t been open to testing the fundamental ‘assumption’ that they would always be the base, they could have been displaced. That aha moment as they say led to a deep vertical strategy that caused Autodesk to not only get better for many customer sets but make sure their existing product continued to offer a base set of services. At the same time, they developed a light version themselves so they could ‘eat their own’ so to speak. They also stopped taking for granted the continued revenue stream of upgrades by people who didn’t necessarily need to keep buy a new package, and moved to a subscription model. All good decisions made by a wicked-smart CEO but one that required a large portion of the company to give up their old way of thinking.
At another company I worked with, they valued financial controls so much that they won’t make investments over $10M without understanding ‘with complete confidence’ the market model that could unfold. The COO demands a spreadsheet and demand forecasts for a new customer trend. For them, then, it’s important to pursue markets only after early entrants have established it is real. Many a person inside this company get frustrated for the lack of ‘entrepreneurial spirit’. They vent, they get mad. And they wonder why they can’t get things adopted by the management team. Remember that the gremlins are hiding. They don’t stand out on the street corner with a sign. Without noticing and working this organizational bias, it is nearly impossible to drive a decision forward.
Some companies and execs never do come to grip with their gremlin friend. The fact that they have one, or what it is. And until they do, they really can’t move forward. Because at all times, it’s this organizational bias that has led to a set of decisions up to this point. And sometimes, perhaps even usually, that’s not the same thing needed to go forward. Ironic, isn’t it?