This article explains the Blindspot Analysis in a practical way. After reading it, you will understand the basics of this powerful Decision Making tool.
What is a Blindspot Analysis?
The Blindspot Analysis uncovers dangerous, incomplete, incorrect and outdated assumptions that can inhibit decision making within an organisation.
American economist Michael Porter first used the term to detect old-fashioned wisdoms and assumptions within companies, that support the business strategy and prevented new, modern ideas from having a chance of succeeding. The term became popular after American journalist and historian Barbara Wertheim Tuchman used it in her 1984 book ‘The March of the Folly’. She notes that the Blindspot Analysis describes politics and strategies that were clearly wrong in their assumptions and are since seen as prejudices by others. In the end, it was the Israeli-born American psychologist and philosopher Benjamin Gilad who developed a 3-step method to uncover blind spots in his book ‘Business blind spots‘, Businesses can use this to replace ingrained and old-fashioned convictions and assumptions with modern reality, thoughts, and convictions. This ensures their decisions will be more effective.
Despite the fact that organisations do careful research before making decisions, it can still go wrong. Often, something important is missed or alternatives are not considered and, as a result, wrong decisions are made. In many cases, so called ‘blind spots’ are not taken into account.
The Blindspot Analysis can help with this; it’s a final safety net that leads to a systematic audit. Initially, too much confidence is placed in traditional strategy models and as a result, the decisions that are made are not fully supported. Especially a Blindspot Analysis can uncover shortcomings and make it easier to abandon old-fashioned ideas. Blind spots can manifest in three ways:
- The (top) management is completely ignorant of strategically important issues.
- The (top) management is aware of strategically important issues, but does not interpret them correctly.
- The (top) management is aware of problems being caused by outdated assumptions and interpretations, but discovers this too late and as a result also acts too late.
Identifying and removing blind spots is of crucial importance for effective strategic decision making to minimise the chance of making wrong decisions. Apart from the fact that blind spots are mostly caused by old-fashioned ideas, it also has to do with the mindset of the supervisor. When they are certain they’re right and are not open to change (we’ve always done it like this’), they’re not open to gaining new insights. The so-called ‘group thinking’ also causes blind spots. Groups of employees can have a tendency to choose a safe option that is accepted by everyone. This ‘easy way’ usually doesn’t lead to the best decision and is therefore not the optimal choice.
In his book ‘Business blind spots’, Benjamin Gilad describes a simple 3-step method to identifying blind spots in an organisation:
A previous strategic decision is looked at from a historical organisational perspective. What were the arguments to reach these decisions, which factors played a part and which context was taken into account?
The organisation is looked at from an external perspective. Using public information, it is researched how an organisation has profiled itself, which decisions have been made and which factors applied as well as what outsiders thought of this. Think of interviews with important decision makers within the organisation, assumptions by top managers, information for stock holders, interviews in the media, public appearances and speeches, telephone meetings and maybe even autobiographies by directors.
The results of step 2 are then compared with those of step 1. Every contradiction with the results from step 1 is a potential blind spot.
The Blindspot Analysis is mainly aimed at decision making at the (top)management level of the organisation. Think of both government bodies and the business community. Although most top-level managers are well educated and capable, they also work in a vacuum and aren’t in direct contact with all of their employees. Because of this, they make decisions from their empowered position without looking at other possibilities and perspectives. They have a reduced capacity to analyse well and remove possible blinders. Especially the third step in the blind spot analysis is a powerful tool to point out blind spots and open their eyes, so they will learn to look at problem issues from a different perspective. This will ultimately lead to more powerful and effective decisions on both the strategic and departmental level.
Application of the Blindspot Analysis
The Blindspot analysis is primarily a solution for strategic decisions that impact the entire organisation and are spread over a longer time period. It leads to a formal approach that includes other groups and colleagues to see whether or not important factors in the decision process are overlooked. This way, many different perspectives are used in making decisions and top management can question whether they have applied a thorough risk analysis to all options. As many options as possible should be considered to make a decision. As soon as a single one is excluded, this leads to a blind spot.
It’s Your Turn
What do you think? Is the Blindspot Analysis applicable in your personal or professional environment? Do you recognize the practical explanation or do you have more suggestions? What are your success factors for good decision making?
Share your experience and knowledge in the comments box below.
- Gilad, B. (1994). Business blindspots: Replacing your company’s entrenched and outdated myths, beliefs and assumptions with the realities of today’s markets. Probus Professional Pub.
- Tuchman, B. W. (2011, 1984). The march of folly: From Troy to Vietnam. Random House.
- Zahra, S. A., & Chaples, S. S. (1993). Blind spots in competitive analysis. The Academy of Management Executive, 7(2), 7-28.
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