The Focusing Illusion in Organizations

The Focusing Illusion [Schkade 1998] is a cognitive bias — a tendency to misjudge — that leads to attaching too much significance to one feature of an event or situation. We then make erroneous predictions of future outcomes. For example, many believe — wrongly, research shows — that wealth inevitably leads to happiness. That's why feature stories in the media about tragically unhappy lottery winners are so fascinating — the stories seem paradoxical.

The essence of the illusion is a failure to grasp the full complexity of life situations. Although living in California might increase the probability of attaining happiness, happiness is far from certain, and indeed, the probability of a given individual being happy in Los Angeles, California, isn't much different from the probability of that same individual being happy in, say, Cleveland, Ohio. The focusing illusion leads us to misjudge these probabilities. We forget, for example, that although Los Angeles has more sunny days, it also has more smog.

Most of the common examples of the focusing illusion emphasize the personal: if I were rich (or thin, or beautiful, …), I'd be happy. Some examples relate to relationships: if we had a child, our marriage would be saved.

But the focusing illusion also applies to organizations. Here are some examples of the focusing illusion in organizational life.

• If we acquire that company, we'll own the market and profits will dramatically increase.
• When we finish this project, the pressure will ease and we can get back to 40-hour weeks.
• If we can get Snidely off the team, we'll finally have peace and get some work done.
• If we hire this superstar, we'll be so much better managed that the share price will triple.
• If we can keep these production problems secret until they're fixed, nobody will ever find out and all will be well.
• If we redesign our work processes, productivity will increase so dramatically that our time-to-market will drop by 40%.
• If we consolidate these three locations into one, the cost savings in Fed-X and airfare alone will pay for the relocations in three years.

To guard against the focusing illusion, remember:

• The value of almostThe value of almost any
  organizational attribute (like net
  income, time-to-market, …) is
  the result of contributions from
  many elements any organizational attribute (like net income, time-to-market, …) is the result of contributions from many elements.
• Changing some of these elements will probably change the result, but the direction of the change depends on what else is happening.
• Any change you make might also change contributions from elements you don't change.
• Other elements you don't control are always free to change on their own or in response to external factors.

Consequently, the effects of changes we make are usually tangled up with other changes that are either already underway or that result unexpectedly from what we've done. We simply cannot get what we want by focusing solely on what we actually do control. Everything matters.  Top    Next Issue

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For more on cognitive biases, see "Nine Project Management Fallacies: IV," Point Lookout for January 11, 2006.

Footnotes

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