Blindspots analysis or blind spots analysis is a method aimed at uncovering obsolete, incomplete, or incorrect assumptions in a decision maker’s mental scheme of the environment.
Michael Porter used the term "blind spots" to refer to
conventional wisdom
The conventional wisdom or received opinion is the body of ideas or explanations generally accepted by the public and/or by experts in a field. In religion, this is known as orthodoxy.
Etymology
The term is often credited to the economist John ...
which no longer holds true, but which still guides business strategy. The concept was further popularized by
Barbara Tuchman
Barbara Wertheim Tuchman (; January 30, 1912 – February 6, 1989) was an American historian and author. She won the Pulitzer Prize twice, for ''The Guns of August'' (1962), a best-selling history of the prelude to and the first month of Worl ...
, in her book ''The March of Folly'' (1984), to describe political decisions and strategies which were clearly wrong in their assumptions, and by other authors since, such as social psychologists
Mahzarin Banaji
Mahzarin Rustum Banaji FBA (born 1956) is an American psychologist of Indian origin at Harvard University, known for her work popularizing the concept of implicit bias in regard to race, gender, sexual orientation, and other factors.
Educatio ...
and
Anthony Greenwald
Anthony Galt Greenwald is a social psychologist and, since 1986, professor of psychology at University of Washington.
In 1959, Greenwald received a B.A. from Yale University. In 1961, he received a M.A. from Harvard University, and in 1963, he ...
in their study of
prejudice
Prejudice can be an affective feeling towards a person based on their perceived group membership. The word is often used to refer to a preconceived (usually unfavourable) evaluation or classification of another person based on that person's per ...
.
Uncovering blind spots
Ben Gilad fully developed, in his book, ''Business Blindspots'' (1994), the following three-step "Gilad method" for uncovering blind spots
#''Step One'': Conducting a
Five Forces Analysis
Porter's Five Forces Framework is a method of analysing the operating environment of a competition of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, ...
on a given industry or segment (market), augmented with identification of possible change drivers, which are defined as trends with the potential to have profound (structural) effect on the balance of power among the five forces.
#''Step Two:'' Collecting
competitive intelligence
Competitive intelligence (CI) is the process and forward-looking practices used in producing knowledge about the competitive environment to improve organizational performance. It involves the systematic collection and analysis of information from ...
on the target company’s top executives assumptions regarding the same industry structure as in Step One. Sources may include annual reports' letters to shareholders, autobiographies, interviews in the press, public appearances and speeches, industry meetings, congressional testimonies, conference calls with security analysts (transcripts are publicly available), and all other statements regarding vision and beliefs. An alternative technique is known among competitive intelligence professionals as “strategy’s reverse engineering” which looks for the underlying assumptions which can rationalize existing strategy.
#''Step Three:'' Compare the results of Step Two with the analysis in Step One. Any contradiction with the analysis in Step One is a potential blindspot.
Underlying assumptions
Underlying Blindspots Analysis is an assumption about the inherent
biases
Bias is a disproportionate weight ''in favor of'' or ''against'' an idea or thing, usually in a way that is closed-minded, prejudicial, or unfair. Biases can be innate or learned. People may develop biases for or against an individual, a group, ...
of decision making at the top of organizations (business, government or otherwise) exceeding those of their subordinates or outsiders. While many top executives in business and government organizations are smart, capable people, they are also vulnerable to several decision biases that come with their powerful positions, including
cognitive dissonance
In the field of psychology, cognitive dissonance is the perception of contradictory information, and the mental toll of it. Relevant items of information include a person's actions, feelings, ideas, beliefs, values, and things in the environmen ...
, motivated cognitions, overconfidence, and ego-involvement.
The impaired ability of leaders to see reality for what it is, and the more objective (less ego-involved) analysis of analysts and mid-level planners means that Step 3 of the Blindspots Analysis can be a powerful tool for pointing to potential blinders
See also
*
Bias blind spot
The bias blind spot is the cognitive bias of recognizing the impact of biases on the judgment of others, while failing to see the impact of biases on one's own judgment. The term was created by Emily Pronin, a social psychologist from Princeton Uni ...
References
Bibliography
*
* In Maital, Shlomo (2007). Recent Developments in Behavioral Economics. UK: Edward Elgar.
*
*
*
*
{{DEFAULTSORT:Blindspots Analysis
Business intelligence
Competition (economics)
Strategic management