Over the past week, journalists and MPs alike have been able to comb through the details contained in a hitherto confidential study on the potential economic impacts of Brexit. Originally intended for the cabinet’s eyes only, the document was placed in the Commons reading room on the orders of speaker John Bercow, after it was leaked to news outlet Buzzfeed – which covered its contents in a major report of 29 January.
In the days following the leak, before it had even been installed in the reading room, the study came under fire from prominent MPs at the heart of the Brexit debate, with Jacob Rees-Mogg describing it as “highly speculative” and “comprehensively wrong”, and Prime Minister Theresa May dismissing the document as “a selective interpretation of a very preliminary analysis, which ministers have not signed off [and] have not approved”.
While there may be an element of truth to the claims that the study had not yet been rubber stamped, the Buzzfeed revelations were nonetheless uncomfortable for those who are either blazing a trail for Brexit (eg, Rees-Mogg), or attempting to coordinate the underlying negotiations (eg, May).
It’s a striking echo of the reaction to the Treasury’s May 2016 analysis of the potential effects of Brexit, published ahead of the referendum and roundly dismissed in Leave circles – with many pro-Brexit figures dubbing former chancellor George Osborne’s document as the cornerstone of ‘Project Fear’.
Leaving aside the rights and wrongs of the political squabbling over Brexit, the responses to such studies suggests that optimism bias is still very much alive and well among leadership figures, with news of downside risks meeting stiff resistance.
Indeed, new research from three universities in the UK and US suggests that our optimism bias is reinforced by the experiences of people we know: if we hear good news about them, we will incorporate it into our perceptions of those people – but if we hear bad news about them, we will reject it.
Why is it dangerous to ignore negative assessments of a particular venture’s progress? And what can leaders do to slough off their own optimism bias?
“Optimism bias manifests itself in a host of different ways,” says The Institute of Leadership & Management's head of research, policy and standards Kate Cooper. “Sports coaches are often affected by what’s known as observational bias. They may overreact to a mistake, or they may over-identify with a player who occupies a position that they themselves once played in. Coaches may also be inclined to favour players who display similar qualities to the ones that worked for them during their playing careers. So if the coach had a particular facility for, say, speed, or reading the game, their sentiments will gravitate towards those they see as spiritual successors. The danger, of course, is that the coaches end up developing blind spots to other forms of excellence – so the skills of other players go unnoticed.”
If we turn to the traditional workplace, Cooper notes, “not only do we have a recurring problem where leaders find it hard to provide negative feedback – they also tend to clam up when it comes to giving positive feedback too. Other studies show that, understandably, we avoid people who are likely to provide us with negative feedback. From a self-preservation point of view, it makes sense: why would we want to put ourselves in harm’s way? When children dance or sing – which they do very unselfconsciously – they want to be praised. Similarly, people in the workplace who are relatively successful will recognise qualities in themselves that they think deserve recognition, and won’t want those plusses to be tarnished by remarks about areas where they’re not so effective.”
Cooper points out: “When it comes to the matter of uncomfortable data or research, people are similarly reluctant to be the bearer of bad tidings, because they’re wary of the reaction they will trigger. How often do we hear the phrase, ‘Don’t shoot the messenger’? And what about, ‘It’s not what they said – it’s the way that they said it’? To me, that phrase indicates that it’s actually the message that the speaker doesn’t like, and they’re calling the tone into question to cover up for that.
“Once, I did some work at a major retail bank that used the PRINCE2 project management method. That framework is very big on encouraging participants to log Lessons Learned at the end of every project. But someone I was working with said that, in reality, people wouldn’t record those lessons in an honest fashion, because they wouldn’t want to openly reveal, or admit to, any mistakes made. It may only be years later that the team would look back on those lessons through the lens of the same, searching questions and gain proper, truthful insights. So, what we can see from all of the above is that bias is a real minefield for leaders to negotiate.”
Cooper stresses: “Leaders must create a culture in which it’s genuinely okay to air bad news in a way that’s entirely depersonalised – separated from the passions of particular individuals. One way that this can be achieved is by communicating, across the organisation, how much better its prospects are if it’s always alert to potentially impactful headwinds. That open approach can only encourage a climate of adaptability and preparedness. There has been a great deal of comment along these lines in the wake of Carillion’s failure – with observers saying that, had the firm paid greater attention to pessimistic readings of its predicament, rather than clinging to more upbeat appraisals, it would have survived.
“By the same token, we must also acknowledge strong performances from specific individuals – and to make those acknowledgements on a one-to-one basis, so they convey genuine meaning.”
For thoughts on the value of critical self-reflection, check out these learning resources from the Institute