Some years ago I saved an article from the Wall Street Journal about the biggest mistakes doctors make. I hung on to it because I wanted to write about it. My note got lost and just now resurfaced. So, this comes under the heading of “better late than never.”
The article reminded me that the reported errors doctors make are very similar to mistakes made by marketers. True, marketing people aren’t in the life or death business — even if it seems that way sometimes. However, recognizing pitfalls than can lead to bad outcomes should be a life-skill for marketers — as well as doctors.
The article cites 13 common mistakes. Two of them are particularly useful reminders to marketers. As you work to make good decisions, keep at least these two pitfalls in mind.
Bad Decision Pitfall: Overconfidence Bias
The article explains, “A tendency to act on incomplete information, institutions or hunches. Too much faith is placed in opinion instead of carefully gathered evidence.”
So, who among us has not regretted an impulsive decision, one with reverberating effects? For example, who has not heard, hundreds of times, a seminar presenter tell the story of General Motors’ failure when they introduced the Chevy Nova in Spain. We’ve been told, over and over, that “Nova” means “no go.” Ironically, this story is false. It never happened. It, itself, is a “no go.” Thus, the presenter is guilty of overconfidence bias, that is telling the story as truth when a 5 minute Google search would prove otherwise. (These ill informed presenters are doing the very thing they accuse GM of doing: acting without careful research. See how sneaky overconfidence can be?)
Bad Decision Pitfall: The bandwagon effect
This is defined as “The tendency for people on a medical team to believe and do certain things because many others are doing so.”
We’ve all seen this happen a bunch of times. Most recently companies have launched major-big-time Facebook programs, mostly because one of their peers have done one. So, off they go with not a scrap of strategy in sight. Typically, the program bombs and all around the company you hear Facebook being roundly condemned. (This is an example of the article’s “Fundamental Attrition Error.” As in, the failure was Facebook, not us.)
I remember a bank client of mine once decided, without any advance notice to customers (this was before the TISA regulations), to convert all their free checking accounts to $4.99 per month. This decision was made in reliance upon a profitability consultant with no consultation with anyone else — least of all the marketing department. My client put the change into effect within 24 hours of the decision. In the first 7 days, the bank lost 30% of those accounts, taking $7 million in deposits with them. Did I tell you the bank was a $400 million bank? Yes, a clear cut case of overconfidence bias.
What is needed is more careful, analytical thinking and less headlong decision making. Before pulling the trigger, take a break and ask yourself, “Have I really thought through the implications of what I’m about to do? Have I carefully considered all the outcomes? Am I prepared to live with the consequences (loss of market share, wasted resources, etc.) that may ensue?
We have to make decisions every day. Let’s take a moment and be sure we’re making good ones.
SOURCE LINK: The Wall Street Journal (circa 2003)
