When we succeed at any endeavour and establish that our solution works, we can often batten down the hatches to protect that success. We come to believe that what has worked to get us to the top, will keep us there. Our successes often blind us to the possibility of failure, our victories can defeat us. We slide from an offensive mindset to a defensive one. Our vigilance wanes and we become complacent. Our hunger to go the extra mile to build a business or continually develop competence is replaced by ego and corporate arrogance.
In organisations, leaders enter into leadership positions with high levels of overconfidence. And why wouldn’t they? They must have been doing something right, to get to where they are today. This competence layers upon the existing cognitive shortcomings that we all have. Paradoxically, our success means sound decision making becomes even more difficult to master. In a business, sociopolitical landscape that changes quickly, the phenomenon of being blinded by your past success is even more prevalent.
This thought comes from my book Undisruptable reinvigorated by recent conversations with Micah Zenko on Red Teams and Nadya Zhexembayeva on Titanic Syndrom, but I want to connect it to a bias that blinds successful individuals and thriving corporations, please meet “The Hot Hand Fallacy“.
The Hot Hand Fallacy
(Hot Handed 2.0 by tomikari)
The “hot hand fallacy“ (also known as the “hot hand phenomenon“ or “hot hand”) is a phenomenon, previously considered a cognitive social bias, that a person (or organisation) who experiences an initial success, or series of successful outcomes has a greater chance of success in subsequent attempts. In essence, the “hot hand fallacy” is the notion that people believe that after a string of successes, an individual or organisation is more likely to have continued success.
The concept is often applied to sports and originates from basketball, where a shooter is more likely to score if their previous attempts were successful, i.e. while having “hot hands.” While previous success at a task can indeed change the psychological attitude and subsequent success rate of a player, researchers for many years did not find evidence for a “hot hand” in practice, dismissing it as fallacious.
The Hot Hand and The Titanic
(“Titanic” by intq49)
Last week, I had a conversation with my fellow practitioner in Reinvention and author of “The Chief Reinvention Officer Handbook” and “Titanic Syndrome”, Dr Nadya Zhexembayeva. We discussed what she has dubbed “Titanic Syndrome”, which she defines as follows:
The story of the Titanic holds many lessons for all of us. In a business context, the lesson is one of corporate arrogance. On an individual level, the first officer in charge fell victim to hubris and “The Hot Hand Fallacy”, reinforced by the media hype surrounding the might of this unsinkable ship.
William McMaster Murdoch was the officer in charge on the bridge when the ship collided with an iceberg and was one of the more than 1,500 people who died when the ship sank. (The circumstances of his death are the subject of much controversy.) On the night of the collision, the captain had already gone to bed. First officer Murdoch was in charge. At 39, Murdoch had 16 years of maritime experience and was known for his pristine record of averting ship collisions. Prior to the Titanic, he had served on another ship, “The Arabic“, when a passing ship came bearing down from out of the darkness. Murdock overrode his superior’s command, and instead rushed into the wheelhouse, pushed the quartermaster aside, grabbed the wheel and held the ship steady. As a result, the two ships passed within inches without damage.
The Arabic incident was one of many Murdoch mastered in his career. In the 37 seconds between the first sighting of the iceberg and its collision with the Titanic, the officer fully relied on his past successes to make executive decisions in the present. We all know how that turned out.
Like so many organisations, The Titanic was perceived as “too big to fail” so there was less vigilance necessary and little or no preparation for a possible disruption was required. Those involved read their own press, they drank their own koolade and paid the ultimate price. In organisations, lives are not lost, but lives are impacted heavily. A few years ago (pre-pandemic), I visited the Titanic Museum in Belfast. What struck me was the recordings of those workers who worked so hard to build the ship. They were proud, they felt they were part of something bigger than the tasks over which they agonised. When The Titanic sank, you could hear their genuine sadness, not just for the loss of lives, but because they felt part of that failure. Just as Nokia clung to their titanic product and its associated business model or Blockbuster clung to bricks over clicks (ousting John Antioco, who saw clicks as the future) or General Motors and Ford dismissed Toyota in the 1950s, Titanic failed because of the hot hand fallacy, coupled with hubris.
This is a warning shot for all of us, “History Doesn’t Repeat Itself”, said Twain, “but It Often Rhymes” In a similar way, the business environment is peppered with icebergs and if we do not remain vigilant, they will sink organisations and the passengers on board.
Thanks for Reading
This week’s Innovation Show offers solutions to Titanic Syndrome, Micah Zenko is our brilliant guest sharing insights into his book: “Red Team”.
Micah is here: https://www.linkedin.com/in/micah-zenko-
For those who missed the episode with Nadya Zhexembayeva, she has joined us twice over the last 6 years, both episodes are below.
Nadya is here: https://chiefreinventionofficer.com