We are regularly told in no uncertain terms that social media platforms (and the AI algorithms that underpin them) are perpetuating an echo chamber for our existing beliefs. This process of taking what’s been searched for, engaged with and liked then serving you more of it, plays into a concept called confirmation bias, which is the human tendency to reinforce established beliefs rather than seeking to understand counter arguments.
Now I am sure many of you are thinking “What does this have to do with digital innovation?”.
Well, I recently had a conversation with a friend who said “Why does everyone keep talking about digital transformation? Surely by 2020 everyone has gone through that already’. And therein lies the confirmation bias.
Because what they have experienced in organisations is… digital operations, digital processes, digital back office and digital business models, every other business is the same.
Digital transformation confirmation bias, now that’s a mouthful!
Confirmation bias in action
Outside of the social media example, another example of the damaging effects of confirmation bias was seen during the 2008 financial crisis, where a range of complex financial instruments were packaged up, rated, valued and traded based on the underlying assumption that the housing market ‘always goes up’ and that the risk present in these inter-linked CDOs would or could never be realised.
There were a very small group of individuals who managed to navigate past the group-think and see the real problems that sat very close to the surface that the vast majority of people were ignoring.
They wrote a book and made a movie about those people.
Being able to de-couple yourself from everyone else’s opinion and form your own opinions based on a well-rounded cross section of direct experience, helps you make better decisions whether in life or in business.
The danger of bias in business
In certain industries, businesses think they are in a stable state environment.
Their forecasting says “What happened in the past will happen again”. Their NPS scores tell them that they have an established competitive advantage and financial analysts are projecting success for years to come.
It is easy to tread water in the above situation. Don’t test new things, don’t try and do things differently, don’t rock the boat.
Then a year like 2020 hits you… and problems like: we never upgraded everyone from desktops to laptops, we never invested in digital productivity tools, we never completed a resilience test on a contact centre, we never had to redirect paper-work from offices to employees houses etc. etc. all occurred and in a very short time frame.
The reality of change was upon us before anyone could have predicted it.
If competitors are complacent. It’s your move.
In industries where established ways of working haven’t changed for generations. This is the moment to invest in digital solutions.
The future of business is global, it is inter-connected and it is underpinned by data at the core of the Internet of Things.
Now, my friend would baulk at this reality, but if you still have paper-based processes, a lack of shared data sources, people working on manual, repeatable tasks, discrete customer touch-points alongside a lack of mobile, digital solutions, there is probably a competitor who is part of the way through reducing the resource dependency and time to write new business, who is soon going to have a lower cost base and a better customer experience than you… And it might be best to be a fast-follower, rather than a lumbering laggard.
Waracle deliver work with value for clients with vision. We thrive in collaboration and love working to establish mobile, digital business solutions that start to make headway in your enterprise’s digital transformation. If you know you need to address your research and development pipeline and invest in innovation, we are the right partner for you.
If nothing else, ask us our opinion… to see if you get a counterpoint to your operational echo chamber.