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The status quo bias in innovation: The hurdle of clinging to the familiar


Wichtigkeit des Innovationsmanagement

Image: Not acting in response to changes and persisting stubbornly is an unfavorable, if not deadly, decision.


In the dynamic world of innovation, the status quo bias plays a central role when it comes to advancing new ideas and accepting change. This psychological inclination to cling to the familiar can hinder innovation and impede progress. In this article, we will take a closer look at the status quo bias, analyze its impact on innovation, and explore strategies to overcome this hurdle.


Definition of the status quo bias

The status quo bias refers to the tendency of people to cling to existing conditions, habits, or decisions, even when there are signs indicating the need for a change. This psychological tendency is rooted in the uncertainty and discomfort associated with the new, even if it could mean positive changes.


The most damaging phrase in the language is "We’ve always done it this way."

Grace M. Hopper


Psychological background

Research from behavioral economics suggests that the status quo bias is based on cognitive biases, such as the loss aversion effect and the fear of uncertainty. When making decisions, people tend to disproportionately weigh potential losses more heavily than possible gains, often preferring the security of the familiar.


Impact on innovation

The status quo bias can significantly impact the innovation process. Companies resistant to change risk falling behind and sticking to outdated business models until it's too late. New ideas and technologies may be rejected or not experimented with, even if they have the potential to revolutionize the industry.


Examples in practice

A prominent example is the decline of some traditional retail companies that resisted e-commerce, dismissing the trend as a passing fad or only adopting it very late.


“Why question the existing when we know it has worked very well in the past?”

Anonymous


Sticking to the old business model is based on outdated facts. However, those who create new knowledge can actively engage with changes and understand the fate of the old business model over time. The lockdown during the COVID-19 pandemic has accelerated this trend.

Companies like Amazon, Zalando, Digitec/Galaxus, Brack, Migros, Amorana, etc., have shown traditional physical retail businesses that the willingness to engage in permanent change experiments and the introduction of innovative business models with technologies are crucial to becoming, being, and remaining competitive.


Strategies to overcome the status quo bias

Open thinking and innovation culture

To overcome the status quo bias, an open thinking and innovation culture are crucial. It's not the companies themselves but the people within them who resist new ideas. Teams should be composed of individuals dedicated to these issues because they want to, not because they have to.


Clear company vision

A clear company vision, comparable to a North Star, is needed. This vision should clarify what is likely to change in the market and what is not. It should define the company's DNA, describe the long-term orientation, outline planned innovation activities, identify areas that do not belong to the DNA and should be shut down to free up resources, and explain how innovation collaborations can be shaped in an ecosystem.


Agile working methods

Agile methods in innovation, especially in the search and discovery of new business models through experiments, as well as a constructive culture of learning from mistakes, can help reduce the fear of change. These methods also enable sharing the learning curve with the early majority of employees, motivating a shift in the company's mindset.


Encourage all employees

Companies should encourage all employees to bring forth new ideas and create a space where innovation can thrive daily. Innovation should not be limited to specific departments but should be a collaborative effort embraced by all levels and areas of the company.


Positive examples of innovation despite resistance

Companies like Apple have shown that it's possible not only to establish oneself in fiercely competitive markets but also to overcome the status quo bias and consistently take innovative paths. Through a novel vision of technology, a unique user experience, continuous product improvements, and the introduction of new technologies, Apple has positioned itself as a industry leader.


Conclusion: Alignment and looking to the future

Overcoming the status quo bias is crucial for long-term success in a constantly changing world. Organizations that boldly open themselves to new ideas have the opportunity to leverage the dynamics of innovation and establish themselves as leaders in their industries. The ability to leave the familiar behind and embrace change becomes a crucial competitive advantage in an era of constant changes.

Innovation requires courage and a willingness to overcome the status quo bias. When companies and individuals challenge their thinking patterns and foster a culture of change, they can not only promote their own progress but also have a positive impact on the entire innovation landscape. Looking to the future should be characterized by a mindset of learning and openness to fully exploit the opportunities that come with changes.

Yetvart Artinyan

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