How is it possible that so many companies fail to react while they are being disrupted?
It may come down to a cognitive bias called the Normalcy bias.
The normalcy bias is the tendency of people to ignore the probability of a large negative event or a disaster happening to them, just because it has not happened to them before.
This results in people and companies refusing to plan for things which could impact them negatively, such as another company disrupting them, even after they have been warned or the event has even begun to happen.
The normalcy bias is therefore closely related to the status quo bias (where people prefer to not change things) and the ostrich effect (where decision makers want to avoid bad news).
Ironically, humans have a strong negativity bias, so one might expect them to want to react strongly to threats to their survival.
However, the human brain also has a tendency to value immediate things more than things in the future, and if there is currently no disaster it is therefore easier to believe there will be no disaster in the future either.
Unfortunately, this bias may result in company decision makers ignoring the need to react or change, even in the face of a major change or disruption which faces the survival of the company.
Nick Skillicorn
Latest posts by Nick Skillicorn (see all)
- Self-Serving bias: Why you think nothing is your fault - August 9, 2023
- We are all sheep - August 2, 2023
- Planning fallacy: Why we are so bad at predicting how long something will take - July 27, 2023
- Pygmalion effect: The self-fulfilling prophecy - July 24, 2023
Being part of actual change starting in HS. The first words I heard starting in college. I understand we need change just as long has what you change has no impact on what I do or how I do it and the benefit to me and my support system. Only it was unsustainable long term. Sometime I had to let them find out the hard way. It it always took time and in some cases had to play administrative baseball. Understood they need my unique abilities to fix what their experts with 💲had already proven could not. Understood once fixed their old formal training would make them return to their old ways I so would step in a fix what they were & tell them why they could not do that, if they did not listen. They did not have enough $ or power to fix it a third time. But I did suggest how they could do it on their own. Those that listen liked the result, those that did not learn the hard why they should have listen. At my age & retired. You learn. The universe has only one rule you cannot break & we broken it big time. It’s called BALANCE. When we humans do by allowing 💲💲💲in tge hands of a privileged few and believe they are not accountable to a Sustainsble Global community. The “Tide of Chang” will show up. Ne of two ending. Allow the imbalance to destroy what ever it’s attached to or apply innovation & community collaboration to restore the balance for a sustainable future for all the community, or become a note in history. As those that understand that become part of the solution & time always remove the barrier to change Or the community learn the hard why their kids now have a limited future or seen as a disposable pawn to maintain the future for a privileged few. History shows. if you try to live in the past, which as some benefits that have value, but the young well see little value in remaining there & with innovation & collaboration. Build a more sustainable future the old see as change & like most humans fear change. So require time to show them the benefits. But a reality what works for one problem always require innovation to address what does not work in that situations reality. To maintain the balance.