There are many reasons organizations avoid creating a strategic plan and even fewer that follow one or bother to update it, but a major reason is what economists call “outcome bias.”
At its most dysfunctional, this is reflected when attention-deficit executives and/or governing boards follow instead of lead.
They seemingly prefer to frenetically leap from “parade” to “parade” hoping to claim credit by appearing to be in lead, no matter how short-lived the trend or short-sighted the outcome.
Sounds a bit comical, but it is surprising how common this is and how undiscerning many policy-makers and news outlets are. Perhaps the Chaplinesque frenzy more closely resonates with their own daily reality.
Enablers include a world view free of historical memory, context or self-appraisal.
A clue to the behavior is found in studies of what makes some school children thrive and succeed while others don’t. Key is that the latter’s mindset places far too much emphasis on looking good and appearing right vs. striving to be good by accepting and learning from mistakes.
In decision-makers, to paraphrase business researcher Dr. Gad Saad, this is often manifest in an overconfidence, “a proclivity to attribute events to internal vs. external factors” which severely hinders one’s ability to learn from mistakes.
Related is a study published last month by three economists at my alma mater Brigham Young University. It presents an overview of “outcome bias” and a new model making it easier to examine.
Essentially, “outcome bias” drills down into “how people hold themselves accountable for success or failure unrelated to the quality of their own decisions.”
Of course, those I describe above don’t hold themselves accountable. They are much too busy looking good and taking credit for reflection or self-appraisal, a key to achievement called metacognition.
This is why so many who are well-intentioned in community development come to unwittingly destroy the very inherent appeal and distinct sense of place crucial for a community’s strategic differentiation and sustainable success.
They also aren’t likely to read, or are just resistant to the reflection evidence which other perspectives might inspire.
The study conducted at BYU notes how “outcome bias” leads us not only to inflate the accuracy of our judgments and decisions (thus the title in the journal Management Science - “Sticking with What Barely Worked”) but it leads to “complacency after narrow wins and excessive switching after narrow losses.”
Researchers first labeled “outcome bias” the year before I was recruited to Durham, NC in 1989 to jumpstart the community’s destination marketing organization.
Then, the year before I retired more than twenty years later, researchers linked it to “ethically-questionable” decisions including choices people make that “benefit one while causing harm to another.”
As a study of Major League umpires by management school researchers found recently, even when not deliberate, we’re all subject to making unconsciously biased decisions.
But an inability or refusal to reflect on one’s decisions is an indication of zero-sum, either/or thinking and an early warning that if someone hasn’t strayed over the line, they probably won’t hesitate to do so, especially if they interpret fortune and misfortunate as deserved.
The BYU economists studied NFL teams and more than 5,000 games as an extremely valid stand-in to analyze “outcome bias” in other management pursuits.
The more consistently successful teams were less likely to jump from strategy to strategy in part, because they factored in the role of luck in both losses and wins.
Policy makers as well as community organizations, especially change agents such as where I spent my career, often overlook or neglect the strategic importance of preserving a community’s distinctiveness and authenticity of sense of place.
This is often because they delude themselves into thinking it will hamper change.
But they miss, to paraphrase Dr. Michael Porter, the world’s foremost strategy expert, that strategy is all about differentiation, it is in essence about choosing what not to do.
Strategy is about continuity and paradoxically “the ability to change constantly and effectively is made easier by a high level of continuity.”
Continual and never-ending improvement and adaptation is essential to communities. One of my favorite lines by singer-songwriter Bob Dylan, from when I first heard it in his 1965 masterpiece, I’m Alright, Ma (I’m Only Bleeding)” is:
“…he not busy being born is busy dying.”
But the importance of preserving a community’s inherent sense of place and authenticity is the strategy upon which a community can change and revitalize without losing its soul and sacrificing its distinctiveness.
Clouding the issue is that so many organizations and agencies have merely relabeled tactical plans as strategic plans.
If accredited, as fewer than 17% in North America are, the organizations charged with spearheading visitor-centered economic development (DMOs,) stand out when it comes to strategic thinking, especially compared to other forms of development organizations.
At the essence, the job of a DMO is to strategically safeguard and leverage a community’s distinctiveness, its “there-there,” what’s real and genuine about it, in places where it may still survive.
But standing firm to strategically preserve and promote community sense of place can be a lonely pursuit in the face of so many powerful commercial forces aligned to homogenize it instead.
Even when they fall short or are overrun, those on the front lines of sense of place should take heart from a stanza in that song by Dylan:
“While one who sings with his tongue on fire
Gargles in the rat race choir
Bent out of shape from society's pliers
Cares not to come up any higher
But rather get you down in the hole
That he's in”
The litmus test of each decision is to determine if this will differentiate my community or make it the same. “Down in that hole” of mediocrity “misery loves company” but blissfully never learns from it.
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