The Power of Noticing

1. Develop a "noticing mind-set" to see what others miss

First-class noticers are intensely attentive: they recognize talent and see opportunities that others miss.

Cultivate awareness. Successful leaders develop the ability to notice important information that others overlook. This involves being attentive to your environment, thinking critically about situations, and questioning assumptions. Practice looking beyond the obvious and considering multiple perspectives.

Look for patterns and anomalies. Train yourself to spot trends, inconsistencies, and deviations from the norm. Ask probing questions to uncover hidden information. For example, in the Challenger disaster, engineers failed to notice the correlation between low temperatures and O-ring failures. Developing a noticing mindset could have prevented this tragedy.

Take action on what you notice. Once you spot important information, don't ignore it. Follow up, investigate further, and take appropriate action. The ability to notice and then act on critical data is a key leadership skill that can help avoid crises and capitalize on opportunities.

2. Overcome cognitive biases that limit awareness

We view the world in a more positive light than is warranted. We see ourselves, our environment, and the future in optimistic terms.

Recognize common biases. Our minds are prone to systematic errors in judgment that can blind us to important information. Key biases include:

• Overconfidence bias: Overestimating our abilities and knowledge
• Confirmation bias: Seeking information that confirms existing beliefs
• Anchoring bias: Relying too heavily on one piece of information
• Availability bias: Overestimating the probability of events we can easily recall

Use debiasing techniques. To counteract these biases:

• Actively seek disconfirming evidence
• Consider alternative explanations and scenarios
• Use checklists and decision aids
• Seek diverse perspectives and encourage dissenting views
• Conduct pre-mortems to anticipate potential failures

Cultivate intellectual humility. Acknowledge the limits of your knowledge and judgment. Be open to changing your mind in light of new evidence. This mindset helps overcome the overconfidence that often blinds us to important information.

3. Recognize motivated blindness in yourself and others

Simply put, if you have an incentive to view someone positively, it will be difficult for you to accurately assess the ethicality of that person's behavior.

Understand motivated blindness. We often fail to notice unethical behavior when it's not in our interest to do so. This explains why people overlook wrongdoing by those they admire or depend on, like respected leaders or key clients.

Examine incentives. Look at how people and organizations are rewarded. What behaviors do these incentives encourage or discourage? For example, auditors have financial incentives to please their clients, which can compromise their independence.

Create accountability. Implement systems that counteract motivated blindness:

• Rotate personnel in key oversight roles
• Establish independent review boards
• Encourage and protect whistleblowers
• Separate oversight and profit-making functions

4. Think multiple steps ahead to anticipate outcomes

Game theory underscores the importance of thinking one (or more) steps ahead.

Anticipate others' decisions. In any strategic situation, consider how other parties will respond to your actions. This allows you to make better choices and avoid unintended consequences.

Use decision trees. Map out potential scenarios and their outcomes. This helps identify optimal strategies and potential pitfalls. For example, in negotiations, thinking ahead about the other party's alternatives can inform your approach.

Consider indirect effects. Look beyond immediate outcomes to second- and third-order effects. Policies or decisions that seem beneficial in the short term may have negative long-term consequences. For instance, rewarding salespeople solely on booked sales can incentivize bringing in customers who are unlikely to pay.

5. Pay attention to indirect actions and their consequences

When a company refuses to accept price increases to create a safer product, to educate consumers about product safety, and to pay extra to participate in making factories safe, it is a causal actor in creating harm.

Look beyond direct actions. Many harmful outcomes result from indirect actions or inaction. For example, a retailer demanding rock-bottom prices from suppliers can indirectly cause unsafe working conditions in factories.

Trace causal chains. When analyzing problems, look for root causes and contributing factors. Ask:

• Who benefits from the current situation?
• What incentives are at play?
• What alternative actions could have prevented this outcome?

Hold organizations accountable. Recognize that companies can be responsible for harms even when they occur indirectly. Advocate for policies and practices that consider the full impact of business decisions on stakeholders and society.

6. Question conventional wisdom and "too good to be true" scenarios

Anytime you hear about something that seems too good to be true, you should be skeptical.

Challenge assumptions. Don't accept "that's how it's always been done" as a valid reason. Question long-standing practices and beliefs in your industry or organization.

Analyze incentives. When faced with offers or opportunities that seem unusually favorable, examine the underlying incentives. For example, in penny auctions or Ponzi schemes, understanding the business model reveals why the deals are too good to be true.

Seek diverse perspectives. Engage with people from different backgrounds and disciplines. Their fresh viewpoints can help you spot flaws in conventional thinking. For instance, Billy Beane revolutionized baseball management by questioning traditional player valuation methods.

7. Create systems that encourage noticing important information

Leaders have a unique responsibility to create systems that will increase the likelihood that their staff will notice important information and respond in a productive manner.

Design for awareness. Structure your organization to promote noticing:

• Create cross-functional teams to share diverse perspectives
• Implement regular environmental scans and risk assessments
• Establish channels for reporting concerns and anomalies

Align incentives. Ensure that reward systems encourage noticing and acting on important information. Avoid metrics that inadvertently promote ignoring critical data.

Foster psychological safety. Create an environment where people feel safe raising concerns and challenging assumptions. Encourage constructive dissent and reward those who speak up about potential issues.

8. Use outsider perspectives to gain fresh insights

The main advantage I have in these situations is not my intellect or creativity but the fact that I am an outsider. As such, I am able to notice an idea that falls outside the assumptions of everyone else in the room.

Seek external input. Regularly bring in outsiders to review your practices and strategies. Their fresh eyes can spot issues and opportunities that insiders miss.

Practice perspective-taking. Try to view your organization or industry as an outsider would. What would someone new to the situation notice or question?

Rotate roles and responsibilities. Periodically move people between different functions or departments. This cross-pollination of ideas can lead to valuable insights and innovations.

9. Anticipate and prevent predictable surprises

A predictable surprise occurs when many key individuals are aware of a looming disaster and understand that the risk is getting worse over time and that conditions are likely to eventually explode into a crisis, yet they fail to act in time to prevent the foreseeable damage.

Identify potential crises. Regularly assess risks and vulnerabilities in your organization or industry. Look for issues that are likely to worsen over time if left unaddressed.

Prioritize threats. Use cost-benefit analysis to determine which potential crises deserve immediate attention. Consider both likelihood and potential impact.

Mobilize action. Once a serious threat is identified, take concrete steps to address it. Overcome organizational inertia and resistance to change. Build coalitions to support necessary reforms.

Learn from near misses. Treat close calls as opportunities to improve systems and processes. Conduct thorough after-action reviews to identify lessons learned and implement preventive measures.

Last updated: August 9, 2024