ABCs of Innovation: H is for Hindsight
Updated: May 24, 2020
As we rush headlong into a new decade, it may make some sense to recall two truths:
According to Harvard professor Clayton Christensen, of the 30,000 new products launched every year nearly 95% will fail.
This depressing dynamic persists because innovation is uncertain by definition; even the most successful practitioners can’t predict what will succeed or fail. And that, in fact, here as elsewhere, hindsight is 20/20.
The iconic image above was first made famous by philosopher Ludwig Wittgenstein. Because it can be seen in two ways he used it to express his view on what’s called aspect-perception; two different ways of seeing the same thing. Here it helps illustrate that while the success or failure of any product is clearly either/or after the fact, at the moment of truth, when literally forced to place our bets, it’s both. You weigh all the available data, see what you think, and pick the one you’ve most confidence in. And off you go.
For every new product the question resolves itself in the marketplace. And you find you’ve either created a quick off the mark, ready to run rabbit – or you’re stuck, after so much time, effort, and resource, with, well, a dead-duck…
Clearly, no one really knows, or can know, for certain in advance. Yet it appears at the moment of truth innovators almost always see the rabbit. Correctly predicting the 5% of products that succeed, while also confidently launching the staggering 95% of failures. Of course lots of product ideas die well before approaching their moment of truth and many others are rejected in that moment. But still and all, acknowledging the number of internal dead-ends and discards, how and why does the abysmal launch pattern persist?
Why are so many smart people so wrong so often?
Hindsight bias is a psychological term to explain our all too common tendency to over-estimate our ability to have predicted an outcome that could not possibly have been predicted. In discussing the biases that contribute to bad decision-making, Nobel Prize winner and Princeton emeritus professor Daniel Kahneman says: “What hindsight does is blind us to the uncertainty with which we live. That is, we always exaggerate how much certainty there is. Because after the fact, everything is explained. Everything is obvious…”
Great innovators accept failure as a matter of course. More importantly they enjoy dissecting and learning from their serial mistakes. They set high standards and approach the problems in achieving them scientifically. And they welcome uncertainty as the norm. They’re keenly familiar with hindsight bias and know they simply can’t know it all; they won't always be right. They get risk and reward and are open to surprise; sometimes spectacularly so. Consider the remarkable patience and fortitude driving the origin story of Amazon’s Echo, dubbed Project D in Lab126 which after years of concentrated effort became the “next billion dollar business no one saw coming”.
So, what do you and your team see coming in 2020; more rabbits or more ducks?