When Smart People Feel Exposed: Innovation in the Digital Age

In today’s digital economy, it is more crucial than ever for managers and leaders to be able to integrate customer-centric strategies across several departments and silos. As industries evolve at a never-before-seen rate, knowing how to navigate this shifting landscape effectively is critical to fostering both development and a sustained competitive edge.

Embracing New Methods in the Digital Economy

This shift to a digital-first approach has resulted in a plethora of new strategies that require us to reevaluate our interactions with customers and technology. In this digital revolution era, we have to be open to new ideas and ways of thinking and challenge the status quo. For leaders, this includes fostering an environment where innovation is not only promoted but also the primary consideration in all choices.

Getting Over the Curse of Expertise

Even if expertise in a particular sector is essential, it may also inhibit innovation in a rapidly changing digital environment. Leaders commonly find that they rely too much on tried-and-true methods, leading to “hardened” thinking that is resistant to new information. In customer-centric strategies, where understanding and meeting customer needs is crucial, being receptive to unlearning and relearning is crucial. We must encourage our teams to question preconceived notions and venture outside of their areas of expertise in order to see broader patterns and customer insights.

Why Experts Embrace and Harden the Org Chart

Traditional organizational charts have long been a standard tool for illustrating a company’s hierarchy and structure. These charts clearly define the many departments and their responsibilities, frequently displaying ranks and linkages vertically. In addition to defining reporting lines and responsibilities, this structure fosters a segmented approach to operations management and gives people a reason to become experts.

Let’s face it: In times of change and stress, the org chart is hugely comforting, especially to experts. It anchors people within their comfort zone, not leading them to step outside it.

The Organizational Structure of Yesterday Doesn’t Foster the Customer-Centricity Required Today

Dr. Brian Lambert

This siloed approach worked well for straightforward activities in stable conditions in the 1800s, but it causes significant problems in today’s evolving market, especially when pursuing customer-centric strategies.

Conventional Organization Charts’ Drawbacks

I understand the need for org charts, especially from a management and finance perspective. But I think it’s worth taking a step back to realize their natural limitations so we can create strategies that work to move up, down, and across them.

The strategies that leaders (especially middle managers) need to employ must address the following:

1. Innate Silos: By design, organizational charts separate duties and knowledge into distinct departments. Departments include sales, marketing, product development, customer service, and others who complete their specific tasks with little to no contact. This divide may obstruct the efficient flow of information and collaboration in order to understand and fully respond to customer requirements and behaviors. Collaboration likely happens “within” the silo, and not “across the silos.” As another example, consensus happens across silos, and retrenchment happens within silos. More on that later.
   
   
2. Complexity and Change: In a work environment where things are changing rapidly, the rigidity of traditional org charts may make it more challenging to be flexible. When new technologies or market trends arise, it can be difficult for organizations with rigid structures to reorganize their operations effectively through cross-functional teams and customer-centric initiatives. Departments must coordinate changes, which can lead to misunderstandings, lost opportunities, and delays. The org chart becomes an isolated “area of complexity” to cope with change. Individual departments divide processes, tools, and norms that handle that complexity in their silo. While this may help the team feel more comfortable and able to work more quickly, it creates a lot of jargon, unspoken rules, and complexity that other departments feel and don’t quite understand. The group then becomes “easy” to work with or “hard” to work with, which facilitates informal relationships and a lot of internal politics to get stuff done because groups don’t know how to collaborate across silos. More on that later.
   
   
3. Innovation vs. Retrenchment: Companies must continuously innovate to be relevant as markets and customer expectations shift. However, when each department in an org chart is focused on optimizing its specific tasks and ensuring it’s specific team is happy, the overarching goal of innovation for customer delight may be neglected. Departments may withdraw, defending their established practices and processes rather than seeking out novel solutions that can enhance the overall customer experience. For those brave enough to put the customer first, they find their views not well supported and are often identified as “hard to work with” because they encourage the opposite of retrenching — empathy.
   

Experts within each department may develop tunnel vision, focusing only on their domain of knowledge and failing to consider how cross-disciplinary collaboration may enhance customer-centric outcomes. This leads to conflicting organizational objectives and strategies, which complicates the process of putting a cohesive strategy into action.

Recognize the Potential of Horizontal Collaboration

The traditional siloed organizational structure of many businesses can work against a customer-centric approach by stifling innovation and information flow. Facilitating horizontal collaboration between departments fosters a more thorough understanding of the customer experience. People will say they collaborate, but they really don’t. They collaborate within their team but not outside it. They focus on getting things done, not figuring things out for customers. This makes it difficult for leaders to facilitate more robust and integrated strategies where several departments give diverse points of view, leading to more prosperous, more effective customer interactions and solutions. Because questions and approaches to accomplishing these will push people outside their comfort zone.

Distinguishing Between Consensus and Collaboration

Consensus and collaboration both include collective decision-making, but they take very distinct approaches and have very different outcomes.

• Consensus typically aims to come to an understanding that all sides can live with, leading to less-than-ideal solutions that please the majority. This can potentially lead to a “lowest common denominator” approach that is ill-suited to the possibilities or needs of the circumstance.
  
  
• Collaboration, on the other hand, promotes diverse perspectives and vibrant dialogue, leading to innovative solutions that would not have been conceivable through consensus. Collaboration is to bring together the diverse viewpoints of all members to produce a unified and effective outcome that advances group goals, particularly those that are in line with customer-centric objectives. When people work together, their contributions are valued. And, it doesn’t mean they don’t experience friction. Friction is a normal part of the creative process.

Questions to Assess the Culture’s Preference for Consensus or Collaboration

To determine whether the culture of your organization prioritizes consensus over true collaboration, consider the following questions during meetings and strategic planning sessions:

• Are decisions often made with the goal of avoiding controversy rather than considering diverse points of view?
  • This might point to a tendency toward consensus, where maintaining peace takes precedence over challenging ideas and methods in order to achieve the best outcomes.
    

• Do team members often hold back their unique ideas or opposing opinions during meetings?
  • If people are scared to express their differences, it may be a sign that the environment promotes consensus and is stifling original thinking.
    

• Is there a tendency to conclude rapidly to reach a consensus?
  • Hasty agreement and lack of transparent dialogue frequently compromise the originality and depth of the solutions to problems, which is the exact opposite of what collaborative techniques are designed to achieve.

• Do genuine ideas that were kept to themselves during the official meeting usually come up in the after-hours chats?
  • This could mean that larger, more collaborative discussions are shifting to less formal settings where people value consensus more.
    

• Do meeting outcomes frequently have a predetermined result based on the leadership’s suggestions or preferences?
  • This pattern may suggest a top-down approach where consensus is sought around leaders’ views rather than really collaborative strategies that incorporate input from various levels of the organization.

These questions can help leaders and managers assess whether their current environment encourages a truly collaborative culture or emphasizes reaching a consensus to foster more dynamic and innovative team interactions.

Everyone, even Experts, Has Cognitive Biases.

For managers and leaders in the digital economy to maintain a competitive edge and foster a truly innovative, customer-centric culture, it is crucial to understand and reduce cognitive biases utilizing a digital-first principles approach. This method enhances collective decision-making across departments by breaking down silos and merging diverse opinions into a single approach.

In the ever-changing world of the digital economy, where innovation and rapid change are the norm, cognitive biases may seriously hinder our ability to adapt and flourish. Owing to these biases, experts—who typically find themselves at the forefront of evolving technologies and strategy shifts—may feel more exposed or vulnerable when faced with new challenges. Experts can use a first principles approach to get rid of these biases and rebuild their decision-making processes to make them more efficient and rational.

Knowing Your Cognitive Biases

Cognitive biases are systematic patterns of judgemental deviation from rationality or standards. They often result from the brain’s desire to simplify information processing. However, especially in fields where we believe we are experts, they might distort our thinking, leading to poor judgment. Breaking down a problem to its most fundamental facts and rebuilding from there is the first principles approach, which is used to address these biases. This makes it possible for an evaluation to be more objective and free from the effect of illogical arguments and preconceived notions.

The First Principles-Based Cognitive Biases Approach

• Find the Bias and Name It: Indicate exactly which cognitive bias is at work. This can manifest in a variety of ways, such as giving undue weight to the first piece of information you encounter or favoring data that confirms your beliefs.
• Break it down. Breaking down the problem into its most basic components will help you analyze it. What are the underlying reasons? Which suppositions are true?
• Investigate Every Part: Evaluate the validity of each part. Why is it regarded as accurate? Is it just a commonly held belief, or does evidence back it up?
• From the Ground Up: Using the data acquired from this interrogation, reconstruct the decision-making process such that it is only based on impartial, verifiable information.
• Implement the new approach, monitor the outcomes, and make any necessary modifications depending on the results.

Top 5 Cognitive Biases That Expose Experts: A List

Because I do so much work with a hyper-focus on customer-centricity, I run into a lot of people who have cognitive biases.

The top five I repeatedly run into are:

1. Confirmation bias is the tendency to search for, read, favor, and retain information that is consistent with one’s hypotheses or preexisting beliefs. Experts who reject new information that contradicts their previous views are more susceptible to this bias.
   
2. Authority Bias: This bias occurs when a specialist lends disproportionate weight to the viewpoint of an authority figure or overvalues their own opinion owing to their position or degree of expertise. It could lead to a loss of ability to learn new ideas or to restricted thinking.
   
3. Status Quo Bias: The propensity to sustain previous decisions or maintain the status quo. Experts could feel frightened by changes that go against their “tried and true” approach.
   
4. Not-Invented-Here Bias: An expert’s resistance to ideas, products, or solutions from outside their group. This bias might prevent experts from putting new, perhaps more effective solutions into practice.
   
5. Dunning-Kruger Effect: This cognitive bias can lead to the illusion of superiority, in which individuals with only a tiny amount of expertise in an area believe their knowledge and ability are higher than they actually are. Experts may become apparent when faced with complex challenges that are beyond their understanding.
   

Below is a cognitive bias codex. People can have over 150+ different biases. It’s important to recognize this and be open-minded, as bias exists, and experts often have many biases that can lead to blind spots. This was eye-opening for me.

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The Critical Role of Culture

The key to successful integration across silos and enhancing customer focus and customer-centricity is the culture you foster within your team and your organization. A culture that values constructive disagreement and encourages diverse opinions will be more innovative and problem-solving. This is why it’s critically important to distinguish between actual collaboration and consensus-building, which often leads to a compromise that no one is happy with. True collaboration combines diverse ideas into strategies that genuinely resonate with customers. If customer-centric and customer-focused people don’t feel like they can truly collaborate and “focus on the customer,” when working together, they will either go silent or go to another company.

Within that culture, people’s reactions to new ways of working and thinking can be unpredictable and might be challenging to adjust to. Even in a great culture with a lot of focus on diversity and inclusion, people will still react in unpredictable ways if they feel exposed.

How might they feel exposed?

When they recognize they are not as “customer-centric” as they think.

Because they are asked questions about customers, and they cannot answer them.

Leaders need to be able to spot these behaviors and understand how to foster more favorable reactions. Experts may respond differently when faced with new challenges or when they perceive their expertise is “called into doubt.”

For example:

1. Adverse reactions include retreating or a “fight” reaction when individuals battle against new ideas or changes that jeopardize their way of life.
2. Positive Responses: Showing a growth mindset, on the other hand, may lead to viewing challenges as opportunities to learn new abilities and widen one’s horizon.

Negative Behavior to Watch Out For:

• Defensiveness: Being protective, such as ignoring criticism or new ideas right away.
• Withdrawal. A lack of willingness to engage in discussions or decision-making actively.
• Rationalization: Making excuses or blaming others for mistakes or gaps in performance (deflecting instead of owning)

Good Habits to Encourage:

• Accountability: Owning up to one’s mistakes and learning from them.
• Engagement: Actively engaging in and directing forward-thinking discussions is what is meant by constructive engagement.
• Transparency: Being open and honest about challenges and successes while putting new strategies into practice.

Leading in the Face of Opposition

When faced with resistance or other unpleasant reactions, leaders need to do the following:

• Align Actions with Organizational Values: Discuss the company’s fundamental values with the staff, particularly those that emphasize innovation and customer satisfaction.
• Support each other. Ensure that each team member feels valued and understood to create a safer environment for the flow of ideas. Be kind.
• Avoid confrontations. Recognize resistance as a typical reaction to change and take a patient, gentle approach. Keep inviting participation.
• Create Positive Energy: Encourage and recognize people who demonstrate adaptability and a passion for a customer-centric approach.
• Reach out to HR: When group dynamics turn challenging, having HR present can ensure conversations remain constructive and aligned with organizational goals. Perhaps help them lead training sessions that emphasize collaboration, customer empathy, and communication across departments. Or, if there are particular questions you intend to ask in a group setting, make sure HR and your management team are aware of what you intend to ask.

Not only are breaking down silos and fostering customer-centric approaches desirable, but they are also essential for businesses that want to remain innovative and competitive. In order to succeed in the digital economy and not only adapt to its demands, it is our duty as leaders to guide our teams through these changes. By fostering an environment of openness, collaboration, and ongoing learning, we can effectively meet and surpass the evolving expectations of our clients.