The national events of the past week or so have been unsettling by themselves, but especially troubling is the way they illustrate how communication technology and the digital life in general drives people to rush to act—to speak, or text, or email, or behave without thinking.
This happens often in my field, the retail industry. I’ve seen more than a few talented CEOs make flawed decisions that were driven by the pressure to make a change or try something new (think Bed, Bath & Beyond and JCPenney), but forgetting to do their homework first—like talking to customers.
Both Bed, Bath & Beyond and JCPenney serve as cautionary tales of what happens when leaders rush and make assumptions without using accurate data. Bed Bath & Beyond, under the leadership of Mark Tritton, once a retail giant with a $15 billion valuation, plummeted to extinction under a leadership that failed to adapt to the e-commerce revolution and made costly financial missteps without proper data backing. Similarly, JCPenney's pivot under CEO Ron Johnson, aimed at transforming the store's image, alienated its core customers and resulted in a significant loss of market share. These decisions, made in haste and without thorough data analysis, drove $25 billion in evaporated market cap between the two companies.
In both cases, the CEOs made decisions based on assumptions rather than a deep understanding of the market and consumer behavior. The pressure to innovate and stay relevant led to drastic changes that were not aligned with customer expectations or market realities.
This sense of urgency about everything in our lives is why a segment of the social media universe savaged Target in 2023 over some Pride month store displays. It’s why the TikTok crowd scorched Walmart over its new dynamic shelf pricing system. Wendy’s walked back its own plans for dynamic pricing after a similar TikTok thrashing. In all these instances, the complaints were instant and voluminous, thanks to the blistering speed of technology.
And yet, in our limited free time, we are jumping on the web for entertainment and distractions. When it comes to news feeds we are bombarded with, often inaccurate and in some cases manipulated, mostly bad news (that is the news that sells). Which news stories are the most important is decided for us not by our own choice but by algorithms calculated to show us items that get the most views (or worse ones it knows we will like) and reflect our browsing histories.
Basically, it’s become an echo chamber. Leading to total confirmation bias.
The solution?
As individuals who need to make sound judgments, we each must slow down, take a breath, collect and observe different points of views, think before speaking, and pause before sending.
In essence, it is three simple steps:
- Increase observations - collect broad diverse data points (i.e. watch 4 different TV channels) to get the news
- Slow down - In decision making until you have a chance to consider the information you collected
- Avoid Confirmation Bias - at all costs avoid simply looking for data that “feels good” and just affirms your initial point of view.
As consumers of technology, we can choose how we use it. By doing so, we can make better, more informed decisions and avoid the pitfalls that have led even experienced CEOs to failure.
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