Some say, innovation always holds the key to a vibrant business. Their evidence – Google for instance, is so successful primarily because of its innovative culture. How then, did Brawn GP (now Mercedes) win the F1 circuit in 2009 with deliberately low innovation, average tech and an average driver (Jensen Button has finished 18th the previous year).
Maybe it was plain luck – maybe a good year for the driver? Nope, say researchers in Sometimes, Less Innovation is Better.

That’s confirmation bias at play – the father of all thinking fallacies. Also, called myside bias, it is the human tendency to seek, interpret and recall information that reinforces what we already believe – as evidence. We also reject or explain away information that is contrary as “exceptions“. It is our attempt to simplify the world and make it confirm to our expectations and beliefs.

The reasons for the fallacy to exist are both cognitive and motivational. Often, our brains feel at ease by reducing the cognitive load of processing new information and constantly testing our beliefs. At other times, we’ve imposed our desires onto our beliefs. We thus reject information that is contrary to our desires.

“The question is not what you look at, but what you see.”

~ Henry David Thoreau

Confirmation bias clouds our judgement

Such extremities are most easily visible in politics, religion and philosophy. Early Ayn Rand fanatics anyone? They are abundant at work too. Whether you believe your boss is inherently good or bad, you will find abundant proof to support your belief. Same when you believe that someone is inherently smart and competent. Or not.

One obvious way this bias affects business leaders is through business journalism. To quote Rolf Dobelli from the Art of Thinking Clearly, “No professionals suffer more from the confirmation bias than business journalists. Often, they formulate an easy theory, pad it out with two or three pieces of ‘evidence’ and call it a day. For example: ‘Google is so successful because the company nurtures a culture of creativity.’ Once this idea is on paper, the journalist corroborates it by mentioning a few other prosperous companies that foster ingenuity. Rarely does the writer seek out disconfirming evidence, which in this instance would be struggling businesses that live and breathe creativity or, conversely, flourishing firms that are utterly uncreative. Both groups have plenty of members, but the journalist simply ignores them. If he or she were to mention just one, the storyline would be ruined“. Add availability bias to the mix and it is remarkable how business press influences our decision making.

Unless we are aware of this bias, we can’t factor for it, given that when presented with disconfirming evidence, we reject it. Lee Ross and Craig Anderson in their study on Belief Perseverance, state “beliefs are remarkably resilient in the face of empirical challenges that seem logically devastating[…] People simply do not keep track of the justification relations among their beliefs. They do not understand that the discredited evidence was the sole reason why they believe as they do. They do not see that they would not have been justified in forming those beliefs in the absence of the now discredited evidence. It is this rather than the difficulty of giving up bad habits, that is responsible for belief perseverance.”

Let’s explore the “innovation is the panacea to all our business problems” belief. Sometimes it maybe a naive belief in a truism that hasn’t yet stood the test of your own experience, but at other times it is backed by success pursuing a strategy of innovation. Naturally, we don’t remember the underlying justifications or the context.

Scott Berinato says, using the F1 race research, “In 2009, F1 announced that teams could compete using hybrid technology. This was exciting but generated great uncertainty. No one had raced a hybrid at the F1 level before. But most teams dove into reengineering their cars to take advantage of hybrid technology. There was deep investment in innovation.

The team that didn’t invest in radically new technology won the championship.

We think it has to do with the environment around the innovation. If you have a complex product, like an F1 car, and are in a turbulent market, your instinct might be to innovate—to invest in getting ahead of all the change. But your chances of failing with an innovation in a dynamic, uncertain environment are very high. Often, it seems, it’s better to wait until things are more stable and let others who are busy innovating during times of turmoil fail.

But how do you know you’re in a turbulent environment?

“A time of turbulence is mainly defined by three factors. One: the magnitude of change. How much is the industry changing compared with other times? Two: the frequency of change. How often are changes coming at you? And three: predictability. Can you see changes coming? The most important of these is predictability. You can absorb almost any change you can see coming. But if predictability is low, and either frequency is high or magnitude is large, you should scale back innovation until things get more stable. Certainly if all three are working against you, you should innovate less.”

Compare the mental effort involved in researching, understanding such a framework and applying it to your context, versus sticking to your belief. Some of us see ourselves as “innovative” and creative and don’t want to purse a boring strategy of “increasing efficiency” for motivational reasons too.

Facts don’t change, just because we don’t believe them.

So Seek out the fault lines

A professor presented his students with the number sequence 2-4-6. They had to identify the underlying rule that the professor had written on the back of a sheet of paper. They needed to provide the next number in the sequence, to which the professor would reply ‘fits the rule’ or ‘does not fit the rule’. The students could guess as many numbers as they wanted, but could try to identify the rule only once. Most students suggested 8 as the next number, and the professor replied: ‘Fits the rule.’ To be sure, they tried 10, 12 and 14. The professor replied each time: ‘Fits the rule.’ The students concluded that: ‘The rule is to add two to the last number.’ The professor shook his head: ‘That is not the rule.’ One shrewd student tried a different approach. He tested out the number -2. The professor said ‘Does not fit the rule.’ ‘Seven?’ he asked. ‘Fits the rule.’ The student tried all sorts of numbers -24, 9, -43?. . .?Apparently he had an idea, and he was trying to find a flaw with it. Only when he could no longer find a counter- example, the student said: ‘The rule is this: the next number must be higher than the previous one.’ The professor turned over the sheet of paper, and this was exactly what he’d written down. What distinguished the resourceful student from the others? While the majority of students sought merely to confirm their theories, he tried to find fault with his, consciously looking for disconfirming evidence.

“In the back-and-forth of a self-made contest, both sides have a shot.”

Adam Gopnik

Charles Darwin was an epitome of using this strategy, to quote NYTimes journalist Adam Gopnik on Darwin’s seminal book

“The book is one long provocation in the guise of being none…. the […] great feature of Darwin’s prose, and the organization of his great book, is the welcome he provides for the opposed idea. This is, or ought to be, a standard practice, but few people have practiced it with his sincerity — and, at times, his guile.

A counterargument to your own should first be summarized in its strongest form, with holes caulked as they appear, and minor inconsistencies or infelicities of phrasing looked past. Then, and only then, should a critique begin. This is charitable by name, selfishly constructive in intent: only by putting the best case forward can the refutation be definitive.“

Conclusion

Ask yourself this

• How aware am I of my own beliefs & motivations?
• Which important decisions in the past were clouded by confirmation bias, without me realising?
• How did I react to the points which I agree or disagree with?
• Do I have the presence & confidence to find the fault lines in my own thinking? Why or why not?
• How often do “exception” creep in? What if I thought the opposite of those ideas?

Being cognizant of confirmation is not easy, but with practice, it is possible to recognize the role it plays in the way we interpret information. You need to search out disconfirming evidence.

If the word “exception” crops, prick up your ears. Often it hides the presence of disconfirming evidence.

Rolf Dobelli, in the Art of Thinking Clearly