Tag Archives: fallibility

Do you have Status Quo Bias?

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This blog is a reprint of something I’ve written inside the walls of IBM (where you may not be able to go as you are likely not an IBM employee).  I hope you enjoy the thoughts. . .

A great book on the market is the book “Nudges” by Richard H Traylor and Cass R. Susstein. Both men appear to be professors for the prestigious University of Chicago. The book is a wonderful exercise into the thought patterns of people and they propose a basic philosophical approach called libertarian paternalism.

Now before you choke on those two last words, please note the authors used those words in a cautious way, knowing that in today’s world those two words individually carry a lot of baggage with them that we as people may reject based on the “guilt by association” principle.

The authors sum up the simple idea that libertarianism stands for “freedom of choice”. This is powerful thought which we as Americans have a long history of choosing as a tenant of the good life. Paternalism here is more of a calling to be responsible for whatever is within our personal direct control. Put another way, the authors call us to see that we are truly architects of choice.

This makes a great deal of sense in the work that I do for IBM as I am rated in my ability to be a thought leader as it pertains to our customers. This for me is the enormous change I have seen happening from my yesterday certification as a professional consultant where I studied team work, professional messaging and how to assemble a powerful point of view to answer questions for my customers. The change for me is moving from being a software expert to someone who brings value to the customer by helping them see new possibilities and ways of doing business due to the global reach and expert research provided through the work of IBM. I would say this is a daunting task as it means I must constantly be thinking and absorbing the moving marketplace. On the other hand Traylor and Susstein are only concerned about what really works when you are trying to help people make decisions.

Traylor and Susstein have some deep insight into the fallibility of the human mind and constantly demonstrate this idea through exploration of the two sides of thinking: a) our intuitive model of thought and b) our more studious side where we find ourselves intellectually ascertaining the more scientific approach. They have a lot of fun exploring assumptions, myths and basic instructions on how to improve our way of thought.

One of the interesting readings is from William Samuelson and Richard Zackhausser’s (1988) work where they make the observation of the “status quo bias”. “Most teachers know that students tend to sit in the same seats in class, even without a seating chart. The status quo bias can occur even when stakes are much higher, and it can get us into a lot more trouble.

For example, in retirement savings plans, such as 401(k)s, most participants pick an asset allocation and then forget about it. In one study in the late 1980s, participants in TIAA-CREF, the pension plan of many college professors, the median number of changes in the asset allocation in the lifetime of the professor was, believe it not, was zero. In other words, over the course of their careers more than half of the participants made exactly no changes to the way their contributions were being allocated. Perhaps, even more telling, many married participants who were single, when they joined the plan still have their mothers listed as their beneficiaries.

Status quo is easily exploited. Many years ago American Express wrote Susstein a cheerful letter saying that he could receive, for free, three month subscriptions to the magazine of his choice. Free subscriptions seemed like a bargain, even if the magazines were rarely read, so Susstein happily made his choices. What he didn’t realize is that unless he took some action to cancel the subscriptions, he would continue to receive the magazines, paying for them at the normal rate. For about a decade, he has continued to subscribe to magazines he hardly ever reads. He keeps intending to cancel those subscriptions, but somehow never gets around to it. . . .”

Here we are in the midst of Innovation and Collaboration and what has Status Quo Bias to do with our team? When we look at some of the positive sides of innovation and Collaboration the truth is smart folk see there is a great deal of distance between where they are today and where they’d like to be. A fellow colleague put it to me this way, “Al I believe in the end result, I’m just stuck with where my team is at today.”

I’ve seen this same frustration in another blog presented by Gia Lyons when she asked, “Why is it so hard to get smart people to share?”

Traylor and Susstein have some thoughts here when they discuss how inertia is a very powerful force in people’s lives.

How is it with you? Are you still stuck in the status quo? Are you waiting to be rescued?