Business Blog: Hoover’s Business Insight Zone

(Like yesterday’s post on Howard Schultz’s return to Starbucks, this item is really about confirmation bias. But let’s start with a little refresher on Greek mythology. I promise I’ll make the connection in the end — after some quick detours into the Vietnam War and modern astronomy.)

Procrustes, you’ll recall, was the mythic figure who would measure out his guests on his iron bed: if they were too tall, he’d lop off parts of them; too short, he’d stretch them on a rack. All well and good (for a murderous sadist, anyway) until Theseus ended his career by giving Procrustes a taste of his own medicine.

I hadn’t thought about Procrustes for ages — probably since I read D’Aulaires’ Greek Myths to my son — until I came across this stunning 1968 article from The Atlantic Monthly:

How Could Vietnam Happen? An Autopsy

In my non-Hoover’s life, I’m working towards a doctorate in U.S. history, with a specialty in the Cold War. Consequently, I’ve read a lot about the Vietnam War and the policy decisions that surrounded it. The reason I call ex-White House staffer James Thomson’s article “stunning” is that it presages, in April 1968, so much later discussion on decision making in the Johnson White House. (It’s also exceptionally well-written.)

Set aside any political views on Vietnam, and you’re still left with the reality that LBJ and his lieutenants kept upping their bets on the same basic positions during the escalation of the war there — a policy that, by 1968, Thomson was able to classify as failed.

Ah, but what about Procrustes? Here’s the linkage from Thomson’s article:

[M]ore recent events have been fitted to the Procrustean bed of Vietnam. Most notably, the change of power in Indonesia in 1965-1966 has been ascribed to our Vietnam presence; and virtually all progress in the Pacific region—the rise of regionalism, new forms of cooperation, and mounting growth rates—has been similarly explained. The Indonesian allegation is undoubtedly false (I tried to prove it, during six months of careful investigation at the White House, and had to confess failure); the regional allegation is patently unprovable in either direction . . .

Thomson was writing out of disgust over a failed Vietnam policy that costs tens of thousands of American lives (and many more among the Vietnamese themselves). But on a less life-or-death level, I see the same thing all the time in the business world:

• “Strategy X hasn’t worked so far, which means we should invest more in it.”
• “Things are looking up, therefore Strategy X has worked!”
• “Things worked back when Schultz was CEO, therefore we should bring him back as CEO to get things working again.”

We could expand the list from there. The point is, once we become invested in a decision — emotionally, financially, in terms of reputation, and so on — it’s the easiest thing in the world to find reasons why that decision is correct, and it’s tough-tough-tough to think about the ways that the decision might not be right.

This is all the more so, I think, given that business executives, like entrepreneurs, must show great chutzpah if they’re to be successful. Sometimes projects work out in large part because their leaders invested great personal will in making them work out, and in getting the team to believe that the project was a good one.

In the case of Vietnam, Lyndon Johnson didn’t believe that he could afford to back down, not with U.S. troops in harm’s way, and not when he was so busy marching the Civil Rights Act and the Voting Rights Act through the Congress. It became crucial for LBJ that the country believe in his ability to reform society at home while fighting Communism abroad. And so he kept pursuing his policies in Vietnam, even though he had rightly called the situation hopeless even during the early months of his presidency.

In situations like this, we come at last to a point where rationality collapses, obviously or subtly, and we’re left thinking, “But it’s just got to work! Why? Because . . . it’s just got to!” Which is hardly an effective strategy, in business or in statecraft.

What we need is a sort of corrective lens to keep us from falling victim to confirmation bias in ourselves. Do you remember the mission that fixed the giant corrective lens onto the Hubble telescope? The telescope was too valuable to let die, but its flaws were insuperable without that sort of correction. So NASA went to great expense to fix it. The result has been a trove of space images unlike any before it.

The trouble is, you and I don’t have a team of engineers and astronomers to tell us that, by the objective record, our view of our personal cosmos is distorted. No, you and I are more likely to think that the distorted view is reality because, heck, I’m looking at it with my own two eyes!

But savvy students of business from Kathy Sierra to Charlie Munger have taken pains to alert the rest of us to the tricks our brains can play on us as we carry out our work, and we ignore their advice at our peril. When we correct for these known deficiencies — which affect not just you and me, but humans generally — we have much better chances of success.

Maybe you’re not running a country or even a company, but you are running at least your own business life. And if you’re not taking active steps to thwart it, you’re probably running that life with more than a little confirmation bias even as we speak.

Or is it just me?