Quick decision-making and steadfast leadership are often praised in today’s dynamic business landscape. But what happens when data, feedback, or market trends challenge long-held beliefs? The resulting tension, known as cognitive dissonance, is not simply an individual psychological phenomenon; This is a pressing concern for businesses and can profoundly impact organisational results. Compared to the age-old myth of the ostrich burying its head in the sand, companies can sometimes choose selective blindness rather than face troubling realities.
The “Ostrich Moments” of the Business World
Business resilience is often evaluated not when things go according to plan but when they do not. Imagine an organisation invested heavily in a product backed by extensive research and development. Leadership has a firm belief in its potential. However, upon launch, the market reception was lukewarm, to say the least. Instead of going back to the drawing board, the company could double down on its marketing strategy, blame external market conditions or even question the credibility of the feedback received. Such reactions, fuelled by cognitive dissonance, can be dangerous.
Think – Microsoft Windows 8: When Microsoft released Windows 8 in 2012, it represented a significant change from previous operating system versions. The company has invested heavily in the product, aiming to create a unified experience across PCs, tablets and smartphones.
However, upon release, reception from users and critics was mixed. Many people found the interface confusing and felt it was not well suited to non-touchscreen devices, which comprise a significant portion of Windows users. Instead of immediately realising the mistakes, Microsoft first doubled down on its design choices, emphasising the benefits of the new interface. In this case, Microsoft’s initial reluctance to respond to explicit user feedback can be seen as an example of cognitive dissonance. They made a significant change with Windows 8, and accepting its flaws meant realising that their big gamble didn’t pay off.
Another popular example is the adoption of digital transformation. Despite mounting evidence showing the benefits of digital operations, many companies remain committed to traditional methods, citing years of success. This resistance to change, fuelled by cognitive dissonance, can put organisations at a competitive disadvantage.
Think – Kodak’s Digital Dilemma: Kodak, the once-dominant company in the photography industry, is a prime example of a company that could not pivot to digital operations quickly enough. As early as the 1970s, Kodak developed the first digital camera but decided not to pursue it vigorously, fearing it would affect its film business. During this time, companies like Canon, Sony, and later smartphone manufacturers made strides in digital photography.
Additionally, cloud-based photo storage and sharing platforms such as Flickr, Google Photos, and Apple’s iCloud have become popular, allowing users to store, share, and edit photos online. Kodak, due to delays in the transition to digital and underestimation of the cloud’s potential for storing and sharing photos, faced bankruptcy in 2012. Although they have since restructured and ventured into different businesses, their foray into the photography business is a stark reminder of the dangers of leaving through significant technological changes in digital operations.
Navigating Cognitive Dissonance in Leadership
For businesses to thrive in a competitive landscape, recognising and addressing these blind spots is critical. This means promoting a culture of continuous learning, encouraging diversity of perspectives, and balancing confidence and humility. Regular audits, open feedback mechanisms and a willingness to adapt are essential tools in a manager’s toolbox to illuminate and address these neglected areas.
Building an environment where employees, stakeholders, and even customers can share candid feedback is essential. This ensures a diversity of perspectives and can safeguard against collective prejudice. In the era of Big Data, decisions must increasingly be based on evidence. While intuition always has its place, it must be balanced with data analysis. Numbers, trends, and patterns provide invaluable information, serving as a reality check against unfounded beliefs. An adaptive business strategy is not a sign of weakness but a sign of foresight. Markets, by their nature, are always volatile. While having a coherent vision is essential, achieving it must be flexible and responsive to new information and realities.
Diverse teams are more than just a checkmark on an inclusivity checklist; they constitute a strategic advantage. By bringing together individuals from diverse backgrounds, industries, and life experiences, businesses can reduce the echo chamber, foster innovative solutions, and reduce the risk of cognitive dissonance.
The Winding Road Ahead
Resolving cognitive dissonance is not a matter of reactive measures but of proactive introspection. This requires leaders to sometimes step back and question their deeply held beliefs. It is about realising that growth often comes from discomfort and that any conflicting information is not a threat but an opportunity. In an age of rapid technological advancement, changing consumer behaviour and global connectivity, businesses cannot afford the luxury of ignorance. As business leaders, the mission is clear: Face challenges head-on, incorporate feedback, and continuously adapt. The future of companies, employees and stakeholders depends on these choices.