Page 101 - The Resilient Organization

88 Part Three: Step 2. Building Resilience into the Organization

There are a number of heuristics that govern busy everyday judgment.
Such heuristics help managers make shortcuts based on prior experience
and quick evaluations of a situation (for example, Hoffman & Ocasio,
2001; Newell & Simon, 1972; Lau & Redlawsk, 2001; Keats, 1991).
Experiments by Tversky and Kahneman (1986) have shown that thinking
is easily anchored to a matter that may have little relevance to the even-
tual judgment, simply by the fact of its being mentioned. And studies
show that acquired attitudes may not change even in the face of strong
contradictory facts (Barr, Stimpert, & Huff, 1992). The cognitive framing
of the issue persists. Levinthal and March (1993) have called attention to
a number of such examples of cognitive myopia, which—as by-products
of learning—often act as traps. For example, it is tempting to focus one’s
attention on a familiar area and ignore less familiar ones, even if those
others become increasingly salient to the matter at hand, while one’s own
narrow competency becomes more and more irrelevant (Levitt & March,
1988; March, 1991). It’s like constantly improving your English when
what’s really needed in today’s global business environment is Mandarin.
There are also organizational (or possibly institutional) explanations
of commitment creep. The escalation literature is an analysis of the fac-
tors driving the ever-deeper commitment. There may be sunk costs,
political reasons, and/or ideological or cultural norms that make a turn-
around difficult if not impossible (Staw & Ross, 1987; Ross & Staw,
1993; Brockner, 1992). The project may become perceptually insepara-
ble from the success of the institution. Or the change in course (or
admittance of failure) may mean significant loss of prestige, organiza-
tionally and individually. Or the shift may be difficult to justify if
current practices serve existing customers and stakeholders well:
Christensen (1997) describes the dilemma incumbents face in respond-
ing to disruptive technologies, ending up losing business despite making
managerially defensible decisions at any one point in time.

Commitment Creep: Implications for Resilience
Organizational actions that accumulate into strategic outcomes
over time can render a company in unforeseeable trouble. Such