Pride of ownership skews evaluations and demands drastic measures for big decisions.
Swapping lines in basketball and hockey is a given. Even though the transition costs a loss of rhythm before the new line hits its full stride, fatigue would cost far more in the long run. CEOs should consider “swapping lines” during major strategic initiatives such as acquisitions or big dollar capital expenditures. Trade-out folks working on the business case – their strength isn’t ebbing, but their objectivity is.
Business teams are regularly ensnared in the common trap of proving their instincts are correct. I regularly work with teams that develop convictions for which is the best solution far too early in the evaluation. It’s surprisingly hard not to!
Pride of Ownership
At its root, we’re fighting the sentimental attachment that naturally forms when I have when an idea is mine – a pride of ownership. I tilt toward wanting to see my idea succeed. In the Lake Wobegon stories, every parent believes their child is above average. It’s the same with business teams and their ideas. Whether they see it or not, they can’t be completely objective… none of us can.
We’ve covered many counter-measures to manage the inevitable biases that creep into business teams, but sometimes the stakes are simply too high to trust those measures are foolproof. It may be big dollars on the line, it may be the company’s reputation at risk, but the company can’t afford to get it wrong.
In these critical situations it’s worth calling in a fresh team mid-way through the business case development. Yes… hand it off after the primary business case team has surveyed the opportunity or problem, generated alternatives, and done a cost analysis of each alternative.
Unlike fatigue that coaches can see from the sidelines, biases are tough to spot. While not every team is biased every time, we won’t detect most biases. It has to simply be made a standard operating procedure to let fresh eyes tally-up the benefits and assess the risks.
For big decisions, the minor delay as the primary team hands their ideas over to the fresh team pales in comparison to the thousands or millions of dollars could be wasted because of a faulty business case. CEOs require and deserve objective information and insights and only fresh eyes can guarantee that.