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Innovation in the shadow of anchor bias: New paths for creative solutions


Wichtigkeit des Innovationsmanagement

Brain anchor ahoy. Is your thinking in innovation free, or already too firmly anchored?


In the world of innovation, a subtle challenge often emerges: the anchor effect or anchor bias. This article is dedicated to analyzing this phenomenon, shedding light on its impact on the innovation landscape, and presenting approaches to loosen the anchor and create space for groundbreaking solutions.


What is the anchor bias?

The anchor bias is a psychological tendency to cling to fixed reference points when making decisions [1]. In the realm of innovation, this often manifests as a reliance on established concepts, ideas, or overrated technologies, with alternative paths being consistently overlooked. A particularly critical dimension arises when dominant voices in the innovation team fail to fully grasp the true needs of users, leading to solutions that ultimately nobody wants [2].


Anchor bias in innovation history

A glance at the history of innovation reveals many moments where the anchor bias slowed down or even prevented true innovation [3].

From persistent refusal to deviate from known technologies to ignorance of emerging, often superior and simpler solution ideas, this bias affects innovation. This is especially true when blindly adopting the opinions of the highest-paid individuals (HiPPOs) without addressing the needs of users.

Hyped technologies that appear on the technology radar in foresight and are then driven by the board of directors or management are also often at the center of the anchor bias. It has repeatedly blocked the path to real progress by hindering genuine innovations and delaying change.


Impact of anchor bias on innovation culture

The fixation on untested ideas and approaches has profound effects on the innovation culture within companies [4]. Waterfall innovation undermines dynamic collaboration within the innovation team, focusing on producing evident results for still unknown users, problems, and solutions.

Holding onto a dominant opinion (hypothesis) hinders the ability to discover and validate true problems. It also impairs the identification and implementation of new solutions that create a genuine problem/solution fit. Anchor bias additionally destroys creative and divergent thinking within the innovation team, preventing users, their "jobs to be done," and solution approaches from being considered and discussed from a broad perspective.


Overcoming anchor bias in innovation

Overcoming anchor bias requires a paradigm shift towards an open and solution-liberated innovation culture [6]. Companies and individuals should consciously integrate different perspectives, humbly acknowledging that they do not know everything, meeting on equal terms, and actively freeing themselves from entrenched thought patterns.

This transformation is achieved through highly diversified teams that actively involve future users and partners in the process. Additionally, a methodology is required that makes assumptions and creates evidence through iterations. In the absence of validation, alternatives should be sought immediately and boldly. It is crucial to make a new assumption or pivot and continue the process with iterations.

Only through a willingness to change and the promotion of creative thinking can space for innovative solutions be created.


The role of diversity and inclusion

Diversity and inclusion play a crucial role in overcoming anchor bias [7]. Diverse teams that bring different perspectives and experiences break the chains of established thinking.

Only when a neutral and learning organization is created can risks in innovation be systematically reduced. Building on facts instead of relying on preconceived opinions allows for a gradual process. This begins with identifying users, their "jobs to be done," and condensing them into a clear use case in the form of a problem statement. This is followed by the development and validation of solutions.

These steps help shape the go-to-market process with a clear and representative user profile and a defined relevant use case. This is done in pursuit of a product/market fit, ultimately leading to validating the business model. This process starts with the first paying customers in the go-to-market phase and subsequent scaling.

An inclusive culture fosters the emergence of genuine creative breakthroughs.


Conclusion for overcoming anchor bias

The future of innovation requires a profound rethink in dealing with anchor bias. Companies and society as a whole must muster the courage to break free from fixed thought patterns. An open, diverse, and inclusive innovation culture will not only overcome anchor bias but also pave the way for continuous progress to successfully meet the challenges of the future.

Yetvart Artinyan

P.S: Do you want to know more about how to make your innovation project successful and avoiding typical pitfalls?

  1. Extend your team and knowledge on a temporary or permanent basis: Contact me for a conversation.  

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Sources:

[1]: Tversky, A., & Kahneman, D. (1974). Judgment under Uncertainty: Heuristics and Biases. Science, 185(4157), 1124–1131.

[2]: Payne, J. W., Bettman, J. R., & Johnson, E. J. (1993). The Adaptive Decision Maker. Cambridge University Press.

[3]: West, J. (2003). Bicameral Mind, Anchoring, and the Political Science of Consciousness. Politics and the Life Sciences, 22(2), 29–39.

[4]: Brown, S. L., & Eisenhardt, K. M. (1997). The Art of Continuous Change: Linking Complexity Theory and Time-paced Evolution in Relentlessly Shifting Organizations. Administrative Science Quarterly, 42(1), 1–34.

[5]: Christensen, C. M. (1997). The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business Review Press.

[6]: Chesbrough, H. W. (2003). Open Innovation: The New Imperative for Creating and Profiting from Technology. Harvard Business Review Press.

[7]: Cox, T. (1994). Cultural Diversity in Organizations: Theory, Research, and Practice. Berrett-Koehler.

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