Dear Colleagues! This is Asrar Qureshi’s Blog Post #882 for Pharma Veterans. Pharma Veterans aims to share knowledge and wisdom from Veterans for the benefit of Community at large. Pharma Veterans Blog is published by Asrar Qureshi on WordPress, the top blog site. Please email to asrar@asrarqureshi.com for publishing your contributions here.
The Inside View
Daniel Kahneman, the renowned psychologist and Nobel laureate, introduced the concept of “Inside View” in his groundbreaking book, “Thinking, Fast and Slow.” The Inside View is a cognitive bias that occurs when we make judgments and decisions based on our limited and often inaccurate understanding of a situation. We tend to overestimate our knowledge and abilities, leading to flawed assessments and suboptimal outcomes.
Generally, all businesses prefer to keep their information within the organization, disregarding its sensitivity. Various reasons are forwarded in the defense of this behavior. For example, the commonest in that it is our data, and we must guard it; or that we don’t want to share with anyone; or that everyone keeps their data with them, and we must do the same; or that the competitors must not hear about our plans; on and on and on. Being a Pharma Veteran myself, I know what exactly happens in pharma industry, particularly in the local corporates.
Here is an actual scenario from my own experience. I joined a local corporate after working for multinational company for several years. At the MNC, we were not just competing, but fighting with the generic companies to protect our brands. I found many differences between the two sectors but more on that on some other occasion. As Divisional Head at the MNC, I had redesigned the entire brands and sales teams structure; the resulting performance improvement was almost as per expectation. The deviations were minor and manageable. After about a year in the local corporate, I felt the need to restructure sales teams. I talked to the executive management, got their approval, and set to work. I took the sales and marketing management onboard and designed a three-team structure in place of two. Obviously, some brands and people were moved from their existing places. After finalization, we reviewed it and considered it to be perfect. The plan was then presented to the executive management who agreed, and the change was launched. It backfired rather quickly, and we were perplexed. Being marketing head, I took up the responsibility and lead, and urgently started work to control damages. The fact is that we could not control all damages and incurred some losses. We did recover ultimately, but the episode required soul-searching and analysis.
Here is my analysis of the above situation. It was a classic case of Inside View. I did not have enough experience of generic market and I did not realize the basic difference between the two sectors: the MNCs business stood upon their brands; the local corporates’ business stood upon their people at that time, and even now. Taking brands from some team members and giving these to other team members led to loss of business. I kept my own Inside View of previous experience. None of my team members working on this project had any prior experience of doing such a thing, and they relied on their feelings rather than hard evidence. It was a new thing for the executive management also. If we had consulted few people from outside, the situation would be different. We could talk to a veteran of the generic industry to get insight on market and brands; we could find someone who had similar previous experience in the generic market and picked from his experience; we could talk to a more senior person to have his analysis. We did not think about taking any ‘Outside View’ and just went by our ‘Inside View’. The result was loss.
Implications of Inside View
The Inside View may have far-reaching implications across various aspects of our work and lives, from personal decision-making to organizational behavior.
Individuals overestimate their ability to control outcomes, act overconfidently, think that they can control all factors, and it leads to risky decisions and a lack of preparedness for setbacks.
Organizations make unrealistic projections and fail to consider external factors, resulting in missed opportunities and wasted resources. Too many projects are launched with great fanfare and fall on their faces rather quickly.
The underestimation of potential risks and the overestimation of resilience can lead to catastrophic failures.
The communication first becomes terse and then beaks down as problems mount. Individuals and teams fail to consider diverse perspectives, leading to misunderstandings and conflicts.
Suggestions to Counteract Inside View
Overcoming the Inside View requires conscious effort and a shift in perspective. Here are some suggestions to counteract this bias.
Seek External Perspectives – Consult with experts, gather diverse opinions, and conduct thorough research to broaden your understanding.
Embrace Uncertainty – Acknowledge the inherent uncertainties in the world and avoid making definitive predictions.
Consider Historical Data and Past Experiences – Not just your own, but of others also. Analyze past events and trends to gain insights into potential outcomes.
Utilize Simulations and Modeling – Employ simulations and modeling techniques to test hypotheses and assess risks. It is now quite easy because of the digital support.
Foster a Culture of Openness and Feedback – Encourage open communication, challenge assumptions, and welcome constructive feedback.
Accept Mistakes – Have the moral courage to accept mistakes, own their damage, and take responsibility.
Embrace Continuous Learning – Most importantly, continuously seek knowledge, update your understanding, and adapt to new information.
Sum Up
The Inside View is a pervasive bias that can have significant consequences. The issues are not just related to workplace, they are similarly common in everyday life.
By recognizing its limitations and adopting strategies to counteract it, you can make more informed decisions, manage risks effectively, and achieve better outcomes in various aspects of work and lives.
Concluded.
