Humans Project in Straight Lines

by Ron Potter

“It’s difficult to make predictions, especially about the future.” ~ Mark Twain

A friend of mine who recently retired and is now fighting cancer said to me the other day:  You said something to me years ago that has helped me tremendously through these hard times.  I immediately wonder what I might have said years ago that is having that kind of impact today.  He then explained.  You once said to me that the human mind projects in straight lines but nothing in the world runs in a straight line.  I do remember learning and saying that.  If things were going well, my mind assumed they would continue to improve.  If things were going poorly, my mind assumed things would continue to get worse.  It never works out that way.

Straight Line Projections

  • K&E Company (the makers of high-end slide rules) did a visionary study on their hundredth anniversary in 1967.  I was a sophomore in college and did all of my calculations on a K&E slide rule.  Their study missed the coming electronic calculator.  K&E shut down their slide rule engravers in 1976.
  • A late 60″s prediction was cheap energy forever.  The oil embargo happened in 1973.
  • By the late 80’s economic growth based on new industries and discoveries looked dim.  Netscape went public with their internet browser in 1995.
  • People tend to overestimate what they’re experiencing at the moment and undervalue the possibilities in the future.  This reinforces Mark Twain’s quote that it’s difficult to make predictions, especially about the future.

Straight Lines Tend To Be Short

It’s OK to make predictions and decisions based on how things are going today.  The mistake that most leaders make is assuming that the trajectory they are on (up or down) will last longer than it ever does.

I’ve seen many examples of this during my consulting career.  I’ll have to be careful telling about one example because if people know that industry, they’ll know which company I’m talking about.  In this example, the particular company had been the industry leader for over a hundred years.  They made the best and highest quality product within the industry.  They assumed that trend would continue and made plans and decisions based on the fact that the public would always purchase the highest quality product available.  But the buying public is finicky.  They actually changed their behavior and started purchasing less expensive products in large numbers.

I watched another client struggle with losing customers.  When the leaders asked some of their key employees why they were losing market share, the answer was “customers don’t see us as a nutritious option anymore.”  The leaders discounted their own employees by proclaiming that their products have been seen and promoted as a nutritious project for over a hundred years.  That couldn’t have changed overnight.  But it had changed overnight while the leaders were still projecting in straight lines based on the past.

This last example is not about a particular company but an entire industry.  Many of my clients through the years have been in the pharmaceutical industry.  The pharma industry may be one of the riskiest industries in existence.  They will often take several years and invest nearly a billion dollars bringing a drug to market only to have it fail to pass human trials or FDA approval at the last minute.  I can’t think of any other industry that takes that kind of risk.

I’m going to make a political statement here that I often avoid.  There has been a lot of discussion from our government on price controls.  It’s not a price control issue, it’s a trade issue.  Nearly all other countries in the world do put price controls on drugs.  This leaves the United States carrying the burden of the cost of development.  If the US also puts price controls in place, there will be no further development of new drugs.  Let’s fix the trade issue and have other countries pay their fair share of development.

Once a new drug has been accepted and makes it to the marketplace, there are a limited number of years left on the original patent for the company to earn back the high cost of development.  Once a drug goes off-patent and becomes generic, I’ve seen many companies assume that the brand name drug sales still have a life that will tail off slowly.  It never does.  Once a generic is available, sales of the brand name drug drop to zero almost immediately.  Thinking in straight lines can be deadly.

What’s a Leadership Team To Do?

It can be difficult for leaders and leadership teams to not get caught in the straight line syndrome.  Here are a couple of ways to avoid that issue:

  • Listen to the outlier.  When there is an outlier on the team their opinion is often discounted.  It’s just easier to go with the majority rather than reconcile the outlier’s thoughts.  Don’t do that.  Listen to what they have to say.  Listen with the intent to understand rather than reply.  Don’t try to fit their thinking into your view of the world.  Listen to how they see the world differently.
  • Nurture new and inexperienced employees to look at things differently.  People from different disciplines view things differently.  Listen to how they see the issue.  Inexperienced employees often have the freshest views on things.  They don’t know what they don’t know yet.  They often ask interesting, novel, and surprising questions that experienced people have forgotten.
  • Listen to experts carefully. “Experts”  know the answers they’re looking for and discount new ideas and outliers.  We need our experts.  But don’t just assume that their answers and opinions are right or the final answer.  They know what they’re looking for and discount answers and opinions that don’t agree with their preconceived ideas.

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