The Problem with Positivity Bias in Executive Reporting
The sales data is clear: the free-gift-with-purchase offer did not increase our total online sales. Yet, there’s a much different interpretation from the marketing team. They said it was one of our most successful product launches ever! So, who’s right? The truth is, they can both be correct. It can be a successful launch campaign and not deliver strong business results.
Ultimately, the real question is what type of picture was communicated to leadership. Did only the good news of a successful product launch get communicated? Or was it a balanced picture that also included the product sales were less than expected? There can always be different interpretations from different teams and perspectives, but there’s a bigger problem I’ve seen across my career at large organizations. It’s the desire to only report the good news to leadership. I call it the “good news disease” – or what’s more commonly known as the positivity bias. Another accurate description comes from the former Chairman and CEO of General Electric (GE), John Flannery, who called it “success theater.” This occurs when people and teams only share how well something performed and mask any kind of problems from leaders. Inevitably, those small problems can grow into much bigger surprises when positive bias overshadows the more true, unvarnished story.
Good News Disease/Success Theater: the desire to only report the good news to leadership.
Possibly one of the biggest corporate victims of this was GE. In the book “Lights Out: Pride, Delusion, and the Fall of General Electric,” Wall Street Journal reporters Thomas Gryta and Ted Mann detail many of the reasons for GE’s great collapse, including the rampant internal culture of positive bias that overly focused on good news to leadership. By doing so, they overlooked any smaller issues that eventually grew into monstrous problems. This deliberate hiding of issues led to a series of major surprises that caught many of the executives off guard.
Even Bill Gates fought hard against this at Microsoft and coined the term “making bad news travel fast.” He wanted to catch issues before they became major problems and demanded his teams deliver the news candidly — especially when it was bad.
In my career, I’ve seen business results become so heavily edited that everything appears to be positive, regardless of the real performance. In one example, an executive solely touted the amazing improvements to the digital customer experience by the reduction of clicks it took to place an order. While the decrease of clicks was truly amazing, the actual customer conversion rate went down by an equally staggering amount! Although a portion of the user journey was improved, the overall financial impact was disappointing. To this day, I’m uncertain if the executive ever knew the conversions dropped so much.
The Bad News Surprise Lurking Behind All That Good News
We all like to hear and share good news: The new major client we won. The A/B test that drove an increase in conversion rate. The cost reduction effort was delivered ahead of schedule. Everyone feels good in these scenarios, and leaders love to congratulate a strong team effort. But the reality is you may not be hearing the complete picture. Yes, we won that new major client, but it’ll be unprofitable for the next three years. Yes, the A/B test did prove significant, but it’s unlikely to deliver a noticeable impact to sales. Yes, we delivered the cost reduction ahead of schedule, but that’s because we had to reduce the project scope. While there’s some good news to deliver, it also must be delivered without positivity bias. From this balanced perspective, leaders and teams can make better decisions based on the complete reality.
In organizations that tamp down this kind of news from being shared to leadership, it adds a new level of risk for the entire organization. This focus on only sharing the good news creates a fertile environment for small issues to continuously grow into monstrous surprises. Like a small infection, these issues silently grow into a major problem that inevitably surprises the leaders. While it may be a complete surprise to them, there’s often a “we saw that coming” reaction from the frontline members of the team.
Only sharing the good news creates a fertile environment for small issues to continuously grow into monstrous surprises. Like a small infection, these issues silently grow into a major problem that inevitably surprises the leaders. Click & Tweet!
How Can Business Leaders Eradicate the Good News Disease?
The first thing is to genuinely reflect and identify how common the positivity bias is at your organization. The reality is some level of positivity bias is always going on within every organization. Once you understand the magnitude, you can then start to take actions to reduce the amount of it.
Here are some steps on how to deliver bad news at work and address it:
1. Open Your Mindset to Receive All the News – The Good, the Bad, the Ugly
Nothing can improve if you or other leaders do not adopt an open mindset. While hearing good news makes us feel good, we must accept that only hearing the good creates a false reality. You need everyone, including yourself, to see, hear, and focus on all the news. The good news should be praised, the bad news should be explored, and the ugly news should be fixed. Follow Bill Gates’ advice and demand your team make bad news travel fast and be open-minded when it arrives.
2. Encourage your Team to Deliver the Real News
As a leader, you must continuously encourage your teams to deliver the real performance news. Sometimes, you’ll need to remind your teams you want to see and hear what’s not working. If you show genuine curiosity, your inquisitiveness will help you build trust with your team. As you dig into potential issues with your team, respond with support and empathy to better understand the truth. If you find yourself getting defensive about unflattering numbers, remind yourself that your reaction sends a signal to your team. If you’re not careful, you may inadvertently cultivate an environment where bad news isn’t welcomed and the positivity bias, reinforced.
3. Seek To Better Understand Problems Using A Data Story
The cold hard truth can sometimes be difficult to swallow on its own. In these cases, it may be best to have your team wrap it in a data story to help you and other leaders overcome our cognitive biases to defend or rationalize a previous decision. The intention is not to sugarcoat the bad news, but to invest the time for the team to dive deeper and better explain why things did not perform as expected. Some of the best insights come from those things that didn’t work as we initially believed. When you and your team have a clearer understanding of why something happened, you can start to make better decisions on what to change in the future. Using storytelling to effectively communicate data allows you to not only understand why it occurred, but more importantly, it pulls you and your team together on solving and improving it in the future.
Some of the best insights come from those things that didn’t work as we initially believed. When you and your team have a clearer understanding of why something happened, you can start to make better decisions on what to change in the future. Click & Tweet!
4. Foster a Culture of Transparency
Finally, you need to foster a team culture that’s transparent and open about sharing actual performance data all the time. This means creating a safe environment for team members to share and discuss how things are performing. Every employee needs to feel safety in their role when delivering news that may shed a bad light on company decisions. This could mean actively holding office hours and seeking team members to bring issues to you in a low-risk way for them to share.
I was fortunate enough at one company where I worked that the leadership exhibited all these traits and fostered an open culture. I was assigned to a special project for the CEO to go into the field with our customers to spend time learning and understanding the impact our product delivered to their businesses. My primary objective was to quantify the value of our product in customer terms. I spent more than months across multiple customer locations observing, documenting, and quantifying the value of our product in various ways. When I returned to the office, the CEO took me out to lunch for me to share my findings in great detail. He was genuinely curious about everything I saw and experienced and made me feel comfortable that he wanted to know the truth. Although we all had hoped I would find strong evidence our product was highly valued and delivering efficiencies that would help businesses make more money, the somber truth was it did not deliver enough value to justify its cost. Multiple views of the data did suggest it was helpful in certain scenarios, but in the larger context of business operations, user experience, and culture adoption, it didn’t deliver enough value to justify its cost. The CEO was deeply appreciative of all my efforts to get the truth, but most importantly was open-minded when hearing the bad news. From this balanced view, he and the rest of the leadership team made the difficult decision to discontinue the product and move forward with other initiatives.
Had I not felt safe to share the complete news, I likely would’ve only highlighted the good aspects I found. The CEO’s genuine curiosity about all the issues I found helped me trust that he had an open mind to really understanding the entire experience and would make decisions to benefit the company. Had I hidden the challenges or problems I found, at best, it would’ve only delayed the inevitable.
The Surprise That Never Comes
Organizations that have adopted an openness to sharing all the performance news rarely get surprised by major issues. These organizations have built a strong immunity to the positivity bias by always getting a balanced perspective of their business. They tend to spend most of their time working on the issues and learning from things that didn’t work as expected. These organizations continually aspire to learn quickly from everything and are seldom blindsided. And when these companies have positive news to share, they know the praise and celebration will be truly warranted.
As you prepare for your next business review, ask yourself the following questions before and after the meeting. Your best chance to avoid that big surprise is to address it when it’s small and you can correct it quickly.
- Does your team tend to only focus on sharing the good news?
- Do you believe you have a culture where your team can be open and honest about the true business performance?
- When you do get some bad news, how do you react to it?
- Are you learning to better understand or do you get defensive?
Get the most out of your data by using storytelling to effectively communicate meaningful insights — whether the results are good, bad, or ugly. Reach out to our experts to help your organization transform information into insights that can drive meaningful business outcomes and improved digital experiences.