Competitive Intelligence: How to Avoid Interpretation Bias - dummies

Competitive Intelligence: How to Avoid Interpretation Bias

By James D. Underwood

It is important to avoid bias in competitive intelligence. Unfortunately, while people like to think of themselves as rational human beings and objective thinkers, few actually are. The rest of us are more selective.

A majority of the population is receptive only to information that confirms their existing views, a phenomenon known as confirmation bias. If something doesn’t fit into their existing matrix of understanding, they reject it. For example, conservatives gravitate toward conservative media and reject liberal views, and liberals tune in to liberal media and reject conservative ideas and ideologies regardless of whether a certain view has any merit.

In addition, people tend to interpret facts in a way that supports their existing point of view. Congressmen, for example, have been known to completely change their views on raising the debt ceiling depending on which party is residing in the White House.

In the world of business, the CEO may dismiss a serious threat posed by a new competitor simply because that competitor hasn’t yet claimed a significant market share. That’s not objective thinking. That’s interpretation bias.

Interpretation bias is the result of emotional thinking, which almost always overrides logic. Any change in thinking from a familiar paradigm is rejected roughly 80 percent of the time.

Here are some ways to increase awareness of interpretation bias and overcome it.

Basics of interpretation bias

Interpretation bias is a lot like alcoholism in that those who have the condition are the most likely to deny having it. Also, as with alcoholism, the first step in overcoming interpretation bias is to admit that you have it. You probably have interpretation bias if you do any of the following:

  • Have strong opinions on certain issues that are unlikely to ever change

  • Actively seek out information that confirms your viewpoint

  • Have strong reactions to any information or perspectives that challenge your beliefs

  • Hang out exclusively with people who share your views

  • Often dismiss or ignore the suggestions of others

Observe yourself and others (specifically the leaders in your organization) to look for signs of interpretation bias. As you witness the signs on a daily basis, your awareness of your bias and others’ begins to grow.

Training resources for overcoming interpretation bias are readily available. Joel Barker is one of the leading thinkers on paradigm blindness, and any of his books can increase your awareness and understanding of this issue.

In addition, “Gunfire at Sea: A Case Study of Innovation” by Elting Morison (The MIT Press) reveals just how counterproductive interpretation bias can be. Another good case study is “The Lab That Ran Away From Xerox” by Bro Uttal (originally printed Fortune magazine).

Tap the power of your CI cluster, which should have a number of pathfinder and listener personalities who can be helpful in exposing and overcoming bias, especially if some of the guilty parties are senior-level executives. If the culture is politically charged, your sponsors may not be willing to go public with their support, but they may be willing to counsel you and help move information to the right people.

How to anticipate interpretation bias so you can nip it in the bud

One way to battle interpretation bias is to always assume that you’re going to encounter it and plan accordingly:

  • Whenever you’re presenting an issue, point out how it’s likely to affect the bottom line. Whenever possible, show a five-year breakout of the impact an issue is likely to have on the bottom line. Revealing possible outcomes may help those with interpretation bias look at the intelligence from a different perspective.

  • Include a scenario or other information that focuses on the potential success that a competing company would likely achieve by acting on the intel. In other words, pose the question, “What if our organization doesn’t do this but one of our competitors does?”

When presenting intel and possible outcomes, you need to present a compelling case for implementing a change. Otherwise, you’re unlikely to overcome the natural resistance to change.

How to sidestep bias

Sometimes the best way to overcome interpretation bias is to step around it by starting with people who are less likely to be blinded by bias and more likely to see the opportunity and urgency of your intel. Here are a few paths that may help you avoid the pitfalls of bias:

  • Take it to the top. Assuming that your CEO is open minded, he’s always the best sponsor.

  • Enlist the assistance of your CI supporters. The CI team and its sponsors and internal customers can rally around the intel and possibly make suggestions on how to present it and to whom to improve its chances of being accepted.

  • Involve internal customers whenever possible. A division leader who realizes that an issue can create success or failure for his or her division may become your strongest ally.