Tough economic conditions have left many organisations fighting for survival. In this complex, volatile climate, businesses will need to consider all the information available and fully understand the context of the situation if they are to survive and achieve long-term success.
The reality, however, is that businesses are dealing with an enormous amount of pressure and are often quick to rely on information already available to them or that they can easily obtain. For example, what made our competitors successful? What was their secret recipe for surviving the first wave of COVID-19? And what lessons can we learn from them to reinforce our business?
In fact, we are often so fixated on surviving that we overlook a host of important things.
This is a well-known cognitive bias referred to as “survivorship bias”: the logical error of concentrating on the people or things that make it past a selection process and overlooking those that did not, typically because they lack visibility.
For example, music from the past is often thought of as better than contemporary music. This could be because only the best music from the past is replayed, while today’s music, good and bad, is far more accessible. Thus, survivorship creates perception bias.
But what does this have to do with business and making better decisions?
To explore this, we need to go back to World War II when the US recognised that countries didn’t win battles with bravery alone. The victors were usually the side that made marginal gains by receiving 5% fewer hits or using 5% fewer resources at 95% of the cost.
To achieve this, the US founded the Statistical Research Group in 1942 – a classified project consisting of the brightest statisticians to help in the war effort. Enter the scene, Abraham Wald, the son of a kosher baker from a small Transylvanian town who possessed an exceptional talent for mathematics.
The US army knew that they needed to protect their planes from a highly efficient anti-aircraft weapon called the ‘The Flak’ but they didn’t know how. After mapping out the damage, the initial recommendation was to strengthen the planes’ vulnerable areas. In particular, the tail, body and wings.
Seeing beyond the data, Abraham made a game-changing observation: they were only analysing the damage on planes that returned. To be fully informed, they would need to consider all the places where no bullet holes appeared. From this, they quickly surmised that the planes that went down were hit on the cockpit and engine.
By looking at the bigger picture, they were able to reinforce the most important areas and save countless lives.
We see the same perception bias in business: an organisation tries to replicate a product, process or structure that worked well for a competitor but for some reason fails. Why? Because we only have half of the picture. By focusing on the successful outcomes, we discount the barriers and failures along the way.
So, how do we move beyond survivor bias in business?
There is no secret recipe to business success. Building a high-performance company requires discipline, continuous improvement and growth in marginal increments. Identifying and reinforcing the vulnerable areas in your business is essential. However, it is equally important, if not more important, to know what you are good at and what is going well, and to consistently build these value drivers.
At 2Collaborate we have designed an effective and easy-to-use High-Performance formula that can assist you on this journey – underpinned by nearly 30 years of application and testing. Built on the notion that performance is a culture, not a programme, this formula acts as a blueprint to create your business’s Way of doing things. Adjusted to your needs, it can help you identify and improve areas of vulnerability while reinforcing the value drivers that will ensure your long-term success.
About the author: Hennie Brittz, Director and Head of Marketing and Technology at 2Collaborate
Hennie has spent 12 years in business and consulting conceptualising, designing and implementing large-scale performance improvement processes.
An entrepreneur at heart, he founded the design and internal communications agency, Elevate, in 2019. Shortly, thereafter he co-founded GameChangers, a business consultancy that brings you the best from the sports field and boardroom.
Get to know more about Hennie on LinkedIn https://www.linkedin.com/in/henniebrittz/