How yesterday’s successes inhibit today’s business solutions

16 Jan 2019

How yesterday’s successes inhibit today’s business solutions

How have companies like Uber successfully disrupted the status quo? Alex Thomson, Partner at Odgers Berndtson US, explains how mental set might have a lot to do with it. He begins on the basketball court.

Middle school boys’ basketball is a game of mistakes, and this particular game was no exception. Both teams confused their positions, threw errant passes, and made inexplicable decisions. But then, down two points with just three seconds remaining on the clock, my son’s team inbounded the ball to the smallest boy on the court. Let’s call him Bobby.

Bobby had been left unguarded by the opposing team because until then he had demonstrated little talent for the game. Bobby received the inbound pass, dribbled for an awkward moment, and with .6 seconds on the clock, sank a game-winning three-point shot.

Naturally, the small crowd roared and the team swarmed all over him.

Bobby was a momentary hero. But the consequences did not stop there.

For the rest of the season, Bobby never saw a three-point shot that he did not think he could make. Double or triple covered, from every spot on the arc. Every time he got the ball, Bobby launched it toward the basket, trying to replicate the glory of that earlier win.

The behavior was frustrating for everyone, including Bobby, but no amount of coaching or ridicule altered his course. Whenever he was on the court, poor Bobby performed the same old disaster, trying to make up for his increasingly poor court performance with the same old strategy.

Destined to fail

As a leadership consultant, I often see businesses and business leaders following our friend Bobby’s pattern. Mature companies and proven leaders begin to reflexively emulate their own initially innovative behaviors, and thereby foreclose other methods that don’t fit with their way of thinking.

Don’t get me wrong: I’m not saying that executives are not thinking about new approaches to their business. The problem is that they are instinctually employing outmoded ways of doing that thinking. In other words, the framework with which they search for solutions is unnecessarily rigid or narrow.

This behavior, like Bobby’s, fits a type of cognitive bias called a mental set. Broadly defined, a mental set is a tendency to employ solutions that have worked in the past. As such, it is not an inherently negative trait: all humans unconsciously mine the past for solutions to present-day problems. And an “expert” is someone who has an especially well-developed foundation of knowledge or skills that (at least in theory) makes them uniquely good at building effective solutions.

Fixed thinking

There are times, however, Bobby reminds us, when our mental set recommends a behavior that, though formerly successful, is now antithetical to good decision-making and future growth.

This brings us to a common type of mental set: functional fixedness. Rather than failing to see beyond their own past successes, a person fails to identify a way of using an object that does not resemble that object’s intended use.

Clearly, this is relevant in today’s business environment. Let’s look at the recent past’s most disruptive companies like transportation network companies like Uber, or online vacation rental marketplaces like Airbnb, for example. It’s easy to see that their successes came in part because they defined a familiar object (drivers and cars and empty apartments) in a new, if very basic, way. Uber recognized that any car could function as a taxi, whilst Airbnb saw empty couches and apartments as potential hotel rooms. 

Breaking with the past

Time and again in the past two decades, companies like Uber and Airbnb have disrupted less creative competitors like taxi companies and hotel operators by changing the nature of the supply chain.

But these disrupted companies share a common failure. Like Bobby, they were fixated on the methods that had shaped their previous successes. They could not see that the next phase of solutions would require a break from their own type of thinking.

Seeing a different future

Clearly, it’s important to see beyond our expectations, but how is that best done? Here are five ideas:

  1. Break problems down. One of the best ways of getting around a mental set like functional fixedness is by breaking down problems, tools, or tasks into their smallest word components. To get to the same solution that Airbnb did, you might ask: “What is a hotel room?” The answer: “It’s a place for people to sleep.” “Where else do people sleep?” “They sleep in bedrooms.” Employees across your organization’s structure must be given the platform, leeway, time and permission to think in this way.

  2. Foster entrepreneurship inside your company (aka intrepreneurship). For years, I’ve been hearing that employee empowerment increases employee productivity. Companies should listen to their employees. But to survive in our current business climate, companies need to go further than this, they need to:

    - Actively train employees to think critically about new solutions.

    - Set aside time for team brainstorming.

    - Build an open organizational structure that allows for good ideas to be suggested, built, tested, and experimentally implemented.

  3. Go to the videotape after both the losses and the wins. Teams in business, like teams in sports, need to objectively evaluate their successes: “What did we do well? What could we have done better? And what, most importantly, could we have done that we did not think of trying to do?” By going back and looking at the “tape,” businesses can de-glamorize their successes, and learn to look past them. You want your people to be capable of, but not reliant on, using the past to solve problems in the present.

  4. Get outside perspectives. In general, mental sets make experts better at problem-solving. In circumstances in which the best solutions to a problem lie outside of an individual’s area of expertise, however, experts significantly underperform non-experts. In other words, there are times when an anthropologist consulting for a tech company can provide a very obvious and elegant cultural solution to a problem that the in-house tech experts had been trying and failing to solve. The trick for companies, then, is to routinely look for expertise from outside their industries, either by hiring consultants or employees with new viewpoints.

  5. Build a Diverse Workforce. One thing to look for when looking for “outside perspectives,” is talent diversity. Employees with diverse skillsets and mindsets approach problems from diverse perspectives and thus keep companies from falling into the stagnant cycles associated with mental sets.

If you would like to know more about mental set and how it might affect your leadership team and your company’s future, please get in touch.