Are you an ostrich or a meerkat?
When it comes to facing facts, do you bury your head or become obsessed?
Behavioural economists continue to unearth interesting observations about human attributes that have direct impact on performance. For example, they have discovered that people who suffer from the ‘ostrich effect’ regularly monitor activity or progress while things are going well, but prefer to bury their heads when things go badly. They consciously avoid valuable information and the potential need for action.
On the other hand, some (the meerkats) become obsessed and check the data with alarming freqency.
For those who observe the effectiveness of contract management, both behaviors are perhaps familiar. Certainly the ostrich effect helps us understaand why poor performance can often pass unchallenged until it suddenly turns into a crisis and dispute. Once again, it points to the fact that human behavior underlies so many problems; machines that are programmed to monitor performance show no such traits or emotions – they just react according to their programming.
But the problems do not stop there. When forced to confront an issue, you might hope that people would gather the facts and then take a balanced view to support subsequent action. However, they don’t. Researchers discovered that, far from appreciating and evaluating opposing viewpoints, many people mine the information for ways to support their existing beliefs. In other words, if you take the view that all suppliers or all customers lack integrity, you will select only the data that supports that belief.
So in summary, we avoid unpleasant information even when it is to our benefit to deal with it and, when forced to confront a situation, we seek the information that supports our preconceptions.
It’s actually a wonder that so many contracts succeed!