As a personality/social psychologist, one of the approaches I find very useful is Attribution Theory. Its premise is that people want to make sense of their world and do so by attributing cause to explain why something happened. Given the need to create heuristics – short cuts – to explain behavior, they found that we make common mistakes. One such attributional bias is that if we have only a limited amount of information, we tend to focus on the “figure” – the person we’re watching – and not the “context” – the circumstances surrounding the person top explain his/her actions, even though the person will usually explain his/her actions as a response to something in the context. Clearly such an “attributional bias” has significant implications in management: we blame (or credit) the person because of his/her personality rather than fully appreciate the power of the circumstances.
So you can imagine how interested I was in finding a reference to an attributional study in Joshua Cooper Ramo’s book, The Age of the Unthinkable: Why the New world Disorder Constantly Surprises Us. As Managing Director of Kissinger Associates, a leading strategic advisory firm, he wrote the book to provide a framework to explain why so many policies designed to make the world safer are having the opposite effect. Examples: the war on terrorism is creating more dangerous terrorists, global capitalism, designed to boost the quality of people’s lives, is clawing the gap between rich and poor even wider; Middle East peace plans produce less peace. His central thesis is that we’re looking at the actors, instead of the systems; and by doing so, we’re missing the fact that systems, whether consisting of molecules, viruses or competitors, constantly adjust to a situation and evolve. Moreover, in doing so they grow stronger. So, if we’re still focused on battling what first caught our attention, say the number of tanks or nuclear missiles a country has, we will fail to win the upcoming battle. Our only chance of success is to focus on the forces behind i: the expertise, communication, transportation and other systems. Indeed, he ties this approach to understanding how successful VCs focus less on the product a leadership team is producing than the skills and insights of the team itself, which determines how they’ll adapt to change.
I was reading the book while teaching again at the University of Shanghai this summer (part of my process of appreciating differences in our cultures), and found his reference to an attribution study by Richard Nisbett of particular interest. He had always believed that all people basically think and reason the same ways. But when a Chinese graduate student suggested that there were fundamental differences in the way Americans vs. Chinese think of the world, he wondered what role culture plays. “The Chinese believe in constant change. Westerners live in a simpler more deterministic world. They think they can control events because they know the rules that govern the behavior of objects.”
To test the hypothesis with a number of experiments. In one, he had students raised in China and others raised in the US look at a series of pictures in which there was a large object surrounded by a naturally complex background; for instance, a tiger in a forest or horse in a field of flowers. In between viewing each image, was a white background with a cross and students were asked to focus on the cross. An eye-tracker silently recorded where they looked and for how long. There were 36 such images. When finished a clear pattern emerged. Americans immediately look at the foreground object – the horse or tiger; the Chinese usually looked at the environment around the main object first, probing the complex background of forest or field, and spent less time fixated on the objects. Asked to report on what they saw, a pattern emerged: Americas had better recall of the objects, while the Chinese had better recall of the detailed background.
In other words, the attributional bias that I thought was universal, may not be. Indeed, some people, due to cultural upbringing and/or training, may be able to focus on the context, giving them an advantage when respond to changes in fluid systems. Think about the implications in dealing with competition and changing trends. While in China, the Gap reported closing 175 US stores, because they missed out on key changes in fashion. Companies who focus on trying to sell products and services through existing channels, may be missing out on the disruptive changes that will undermine their efforts (e.g., cable TV operators seeking more viewers while internet streaming cuts the cord).
Can you think of examples where focusing more on the context – the system dynamics – could have helped you make better decisions? Share them with us.