Three Cognitive Bias Traps That Can Derail Your NPD and How to Avoid Them

All leaders are subject to cognitive bias — unconscious assumptions and perceptual errors that result in faulty judgement calls, unresourceful decision-making, and less than successful outcomes. Cognitive bias is inescapable. It’s a feature built into human sensory capacity that evolved to ensure our survival. (We’re conditioned to unconsciously focus on things we perceive as maximising our advantage — often to exclude things that might better serve our interests.) But without continual vigilance, cognitive bias quickly goes from a feature to a bug. And perhaps nowhere can this become so concretely apparent than when companies set out to develop and launch a new product, only to find themselves unwittingly beset by challenges of their own making.

At Pivot UK, we bring over 50 years of proven experience delivering a secure, seamless approach to product innovation and launch. Our expertise spans fourteen industries and six markets, including medical, industrial, security and defence, sports and entertainment, construction solutions, and agriculture. With extensive investment in the latest digital technologies, top DFM talent, and 320,000 square feet of global manufacturing capability, we provide fully integrative, end-to-end NPD backed up by a portfolio of internationally award-winning products.

No NPD effort is without challenges. But the key is avoiding those that stem from cognitive bias. These are the top three traps to look for, and how to avoid them.

The Winning-Strategy Trap

Research in managerial science and neuroscience demonstrates that humans have an extreme cognitive bias toward maintaining their winning strategy. This bias derives from the conviction that strategies that led to success in the past and in the present will continue to bring rewards in the future. (A recent Harvard Business Review article recently took this cognitive bias trap to task in a piece tellingly titled, Why Does Your “New” Strategy Look Just Like Your Old One?) While there are many valid reasons for this bias, when unquestioned, it can cause leaders to overlook the law of diminishing returns and imperil their project or even their business. It can also immunise leaders and product development teams against out-of-the-box thinking and risk-taking required for innovation. As legendary management thinker and consultant Peter Drucker points out, “What got you here, won’t get you there.”

To protect against falling prey to the winning-strategy trap, it’s essential to remain open, curious, and experimental. This also means not becoming blindly attached to your business model, established practises, or product vision. A structural safeguard for avoiding this trap is to include diverse stakeholders in innovation efforts and to develop an appetite for competing viewpoints. Far from standing in the way of innovation, conflict can lead to better products. At Pivot UK, we’ve built our reputation on a highly collaborative, flexible, open approach to doing business. By working closely with clients and partnering with stakeholders from the broader product ecosystem, we leverage divergent perspectives and reconcile competing viewpoints to arrive at innovative solutions.

The Problem-Preconception Trap

Albert Einstein is famous for pointing out that problems of any significance cannot be solved by the same level of thinking that created them. This insight relates to the problem-preconception trap, or how cognitive bias predisposes leaders and product developers to assume they understand the nature of the problem they are attempting to solve without first deeply interrogating it. Without the ability to surface and suspend assumptions, it’s too easy (and too common) to misunderstand the problem space and develop “solutions” that generate unintended second-order consequences. (The infamous “right answer to the wrong problem” scenario, or confusion about the difference between technical and adaptive challenges.)

The problem-preconception trap illustrates how the ability to ask unconventional, complex, and creative questions is central to generating successful outcomes. This is also why Einstein purportedly said if he were given one hour to solve a meaningful problem, he would spend the first 55 minutes trying to understand it. Once he grasped the true nature of the problem, he explained, it would require only 5 minutes to solve.

At Pivot, we have repeatedly seen the problem-preconception trap at work in efforts to surmount supply chain disruption. Companies often frame the question to supply shortages as, “How can we procure X, Y, or Z part, component, or material?” While this is a reasonable question and a great starting point, some better questions might include, Do we really need X, Y, or Z to move forward? Could there be a cost-effective solution closer to home? Could we reconfigure product design to work equally well with alternative and easily accessible parts, materials, and components? By reframing the question in terms of an engineering challenge rather than a procurement problem, we’ve overcome up to half of supply chain issues.

The Refusal-to-Face-Reality Trap

For as much as leaders may pride themselves on being rational, objective actors, the truth is that leaders — much more than the average person — are incentivised to avoid facing certain realities. By occupying positions of power, authority, and responsibility for the members of their organisation and the success of their business, leaders can exhibit unusually high levels of cognitive bias toward the denial of sunk costs — irrecoverable investments that have occurred by dint of oversight, accident, incompetence, or chance. In NPD, this trap often involves extensive investment in product design without adequate attention to manufacturing constraints. Leaders (as well as product development teams) may become so focused on product look, feel, functionality, and performance that they refuse to reverse course even when the writing is on the wall.

Although it’s not a panacea for the broad cognitive bias toward refusing to face sunk costs, DFM (Design for Manufacture) reliably protects against the loss of investment that often occurs when design is undertaken independently of manufacturing considerations. DFM provides a built-in braking system for product designs that are incompatible with scalable production. By integrating NPD stages typically undertaken in a piecemeal fashion (design, engineering, and manufacturing), DFM creates synergy, fuels innovation, and elevates product design while keeping it grounded in manufacturing realities.

While everyone is subject to cognitive bias, the stakes of falling into these three traps are especially high for leaders. But by knowing how to avoid them, leaders can feel confident about protecting their investment and keeping NPD profitably on track.

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