In our sensory-overloaded environment; focus is generally thought to be a good thing; but you believe it can also be dangerous. Please explain.
The problem is, many of us are so focused that we miss out on critical information around us. The key is to remain focused most of the time, but occasionally pick your head up and look around.
Many people who are now in leadership positions came up through more technical, narrow parts of their business, where focus was a good thing because they had a narrow task to complete. But once you become a leader, the ability to notice challenges, opportunities and threats in the environment becomes critical.
Before making any important decision, you believe we need to ask ourselves a key question; what is it?
It’s really three questions: What information do I need to make this decision? What information is available to me? And what else is going on in the environment that I should know about? So often, we show up at a meeting and somebody shows a nice Powerpoint presentation. The problem is, its contents end up having a tremendous influence on what we pay attention to and think about. The fact is, we can never assume that the information we need to make a good decision is right in front of us.
Where should we look for missing data?
The first step is to put this line of questioning on your agenda by asking yourself, What critical challenges, threats and opportunities are facing my organization? What do I wish I knew? and, What additional information would help to inform this decision?
You can also ask your colleagues these same questions. What I find — over and over again — is that when you ask someone about the threats they are facing (and ignoring), they know
the answer: it’s ‘out there’, but in the busyness of daily life, they don’t stop and pay proper attention. This is called ‘inattentional blindness’, and it can be dangerous.
Talk a bit more about our failure to notice. What lies beneath it?
The term ‘inattentional blindness’ comes from the father of Cognitive Psychology, Ulric Neisser, who made what is known as ‘the basketball video’. In his experiment, people watched a video of two teams — one in white shirts, the other in black — passing a basketball to each other. The subjects were asked to count the number of passes made between players in white t-shirts. In the original video, a woman with an umbrella walks right through the middle of the basketball court, and something amazing happens: very few people see her, because they are completely focused on the white-clad team passing the ball. The more famous version of this experiment was done by one of Neisser’s students, Dan Simons, and in his version, the woman was replaced by a gorilla. Again, most people watching the video didn’t see the gorilla.
My colleague Dolly Chugh of NYU and I use the term ‘bounded awareness’ to describe this phenomenon. As the literature on inattentional blindness developed over the years, it really became a perceptual literature: it looked at what we literally see and don’t see with our eyes. What Dolly and I focus on is the fact that, in many cases, leaders don’t notice critical information that isn’t visual.
A tragic example is 9/11. Before it happened, many were aware that there were people out there who hated America, and who were willing to become martyrs for their cause. The terrorists involved had previously bombed the World Trade Center and tried to hijack 12 U.S. commercial airplanes on the same day; and they had tried to turn an airplane into a missile aimed at the Eiffel Tower. And yet, as of the mid-1990s — when all of these things were known to be true — you could still board a flight with small weapons that could effectively be used to take control of the plane. The data was there, but people didn’t notice that there was an enormous threat lurking. As leaders, I firmly believe that it is our job to notice these things and put all the dots together.
Bounded awareness also permeates our personal lives. For instance, patients often accept one of two options that a doctor presents to them. What is the smarter approach?
I borrowed that insight from my colleague Richard Zeckhauser, who teaches at the Kennedy School. I was in the audience a few years ago when he presented the following problem: you have mildly high cholesterol; your doctor puts you on a medicine that has a minor side effect — some trembling of the hands; and the medicine is only working to a moderate degree to reduce your cholesterol. The question he asked the audience was, ‘Do you stay on this medicine or not?’ At first, no one responded, so I yelled out, ‘Yes, you stay on it’. Then he said to me, “Why would you do that, when there are so many other medications that also treat cholesterol and might not make your hands shake? Why wouldn’t you ask to try another drug?”
Doctors — and lots of other people, as well — often frame a decision as, “Should we do A or B?”, when so often, the answer is C. Whenever someone gives us an either/or choice on something that is relatively important to us, we should get in the habit of first asking, “Are those the only two options I should be considering?” That is not a very complex thought, and yet when a problem is positioned as A or B, many of us simply default to answering the question as posed. And to the extent that it comes from an authority figure, like a physician, that only increases our propensity to do so.
In terms of what you term ‘leadership-driven noticing’, you have been particularly tough on corporate boards. Please explain why.
The degree to which very smart people on boards don’t notice critical information astonishes me. There were some very impressive people on the Enron board who should have noticed that something was wrong; and there were smart people on the Satyam board, as well. This keeps happening, over and over.
When people decide to accept an offer to sit on a corporate board, they should realize that they are taking on a serious fiduciary responsibility, and they must go into it with a certain degree of skepticism and preparedness to ask the right questions. Too often, boards are heavily influenced by the CEO. Rather than overseeing this individual, they end up informally working for them. Simply put, it is the job of the board to make sure that the organization is being led in an appropriate way, and alltoo-often, board members shirk their responsibility to provide true oversight.
You have also accused the auditing industry of blindness’. What needs to happen in this arena?
I actually view the Big Four auditing firms as playing a significant role in preventing us from getting to auditor independence. Certain steps have been taken, but these have typically been very small, politically-compromised steps focused on keeping the government from taking action to create true auditor independence.
Think about it this way: if you ask a parent, How smart is your child?, nobody assumes that the parent is an objective source of that information. At the same time, no one assumes that the parent is evil if they give you a more positive response than is warranted. When we care about the data that we’re reporting on, it is human nature to see that data in a positive way.
What has happened is that auditing firms — and particularly the Big Four — have developed consulting practices alongside their auditing services, and they have developed governmentapproved processes that allow corporations to make the decision as to whether or not they are rehired — as either consultants or auditors. When someone leaves an auditing firm, where are they most likely to go to work? For one of their former clients. And when you create this kind of relationship — where the auditor has lots of incentives to make sure that the firm is happy — I would argue that they are no longer capable of independence.
This discussion has been going on since 1997, when my colleagues and I wrote a paper called “The Impossibility of Auditor Independence”. We appeared before the SEC as early as 2000, and various agencies and panels have since talked about how the Big Four have done a highly effective job of being political players in this arena.
If we want truly independent audits, what needs to happen?
The answer is obvious to me: auditing firms should only audit. They should not be allowed to sell consulting services, and firms should not be allowed to hire individuals who have audited them. These very simple actions would be in the interest of society and investors. True, they would create short-term technical difficulties for the client firms, and they would be very upsetting to the Big Four; but without taking these steps, it is misleading to call what these firms are doing ‘independent audits’. Everything we know about psychology suggests that they are providing biased auditing, and they will continue to do so until we make the required regulatory changes.
Is it possible to be involved in unethical behaviour and not even realize it?
Definitely. If we continue with the auditing theme for a minute, imagine an auditor who has lots of incentives to keep her client happy, and imagine that this person is a perfectly nice, honourable person — kind of like the parent I described earlier. What I’m arguing is that even this nice, honest person is likely to see the data in a biased way, without knowing that she’s doing anything wrong. I’m not talking about crooks here — I’m talking about human beings, and when people have a desire to see the data in a particular way they are no longer capable of independence.
We also have extensive literature showing that people can behave in a sexist or racist manner without any intention of doing so. They might have nothing but good intentions, but still, they implicitly act in ways that favour their own in-group. My colleagues and I have spent a lot of time identifying some of the predictable ways in which perfectly good people engage in bad behaviour without recognizing that they’re doing anything wrong.
Is motivated blindness an inevitable fact of life in the corporate world?
While it is pervasive, I do believe that it is surmountable, as countless whistleblowers indicate. More and more people are realizing that effective decision making — and consequently, effective leadership — can hinge on overcoming motivational blindness.
How can we turn this into common practice? First, as individuals, we can learn to more fully notice the facts around us. Second, we can make decisions to notice and act when it is appropriate to do so. Third, we can create clear consequences for leaders when they fail to act on facts that indicate unethical behaviour. And fourth, leaders can provide decision makers throughout the organization with incentives to speak up.
What is Sherlock Holmes’ trick of ‘hearing the dog that didn’t bark’, and how can we learn it?
In Arthur Conan Doyle’s 1892 story, “Silver Blaze”, Sherlock Holmes solves an alleged murder case, not by deducing what happened, but by noticing what didn’t happen. In this case, a dog relevant to the crime scene mysteriously did not bark when he should have. To acquire the power to notice means learning ‘to hear the dog that didn’t bark’ and noticing the outlying fact that doesn’t seem to fit.
Here’s a real life example: I’m 59 years old, and my alternate career path in life — which I turned away from at age 22 — would have been as a card player. When I think back to my life at that time, playing cards was definitely a demanding cognitive task, and I’m certainly aware at age 59 that my mind does not work as well as it did when I was 20. So, I probably would not be as good of a card player if I did return to it. However, one thing I could do a far better job of is to make observations and inferences about the other players at the table — not based on what they do in a particular round, but on what they don’t do.
The same is true in a corporate context: leaders can — and should — make inferences about the competition, about what other companies or countries are thinking about, not only based on the actions they take, but also on the actions they don’t take.
What does a ‘first-class noticer’ look like?
That’s a term that Warren Bennis first brought to the leadership literature, and I think it is something that we should all strive to be. First-class noticers are people who make an extra effort to identify what information is needed and available with more effort. They notice when something seems ‘off ’, and rather than ignore it because they don’t know what it is, they work hard to figure out what it is. In an organization, it’s the person who makes sure that the incentive structure isn’t driving people to not notice things — which is what auditing firms are currently doing. It’s also the person who thinks about what norms are being created within their organization for speaking up, because so often, the way we can notice is through the eyes and minds of the people around us. In the end, understanding what is at work when we fail to notice is crucial to learning to pay attention to what we’re missing.