Are You Blinded by the Conventional Wisdom?

How did Google manage, for several years, to ignore the rise of social networking? How did Microsoft miss the Internet? And why did it take so long for beverage companies to appreciate that consumers would pay real money for bottled water?

In none of these cases can you blame these big blunders on stupid employees. Nor does the 'rotten apple' theory of corporate blame work here either; simply too many people colluded in the same error to hold any one or two of them to account.

Dangerous Convictions
In fact, as in most fiascos, there are multiple causes. But chief among them is over-reliance on key orthodoxies. These are core beliefs and assumptions which implicitly support company strategy and, in many cases, culture. Orthodoxies are so closely held and - often - so implicit that no one even thinks about them any more; they are just how business gets done. Or not done.

Microsoft didn't see the Internet company because their view of the personal computing world was defined by operating systems and standalone PCs. The whole point of the PC was that it was not connected to a mainframe - or to anything else.

At Google, a culture that celebrate cool, cutting edge technology could look at MySpace and Facebook and see nothing. The engineering lacked brilliance and in some cases couldn't even scale. Obviously not worth paying attention to.

Beverage companies believed you had to make a product (usually with sugar.) Who on earth would pay for something that was, after all, freely available and ubiquitous?

Challenge Orthodoxies
It's easy in retrospect to see how easily smart people can be blinded. It's a lot harder to identify and challenge your own orthodoxies. But everyone has them and it can be a pretty chastening experience to bring them out of the closet and challenge them from time to time. Recently, I've been running a series of workshops with CEOs, helping them to unpack and re-evaluate the key orthodoxies of their businesses and, for all of us, it's been an eye-opener. Key to the process has been questions;

What do you know (or think you know) about your customers? What do they value in your products or services?
What do you know (or think you know) about your market and your competitors?
What if all of this were wrong? What would you start to see - or hear?

All orthodoxies are, in effect, mental models of the way something works. And mental models necessarily can't incorporate everything. The economist and Nobel laureate Paul Krugman compared them to maps: you can't possibly work in every detail. But, he went on to say, what you leave out can be more important than what gets in. "I think there's a pretty good case to be made that the stuff that I stressed in the models is a less important story than the things I left out because," Krugman wrote, "I couldn't model them."

Models, assumptions and orthodoxies crave coherence and once they provide it, they give us comfort. Until they turn out to be wrong. Which is why it's a good idea, on a regular basis, to review them and check they still work.

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