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Darwin's Medicine blog

Professor Brian D Smith is an authority on the pharmaceutical industry and works at SDA Bocconi University and Hertfordshire Business School.

The chief executive ostrich

Some of the most perplexing executive behaviour is simply Darwinian

Most of my work involves applying Darwinian ideas to the life sciences industry.

I work at the level where business models equate to species, market changes are selection pressures and organisational routines are analogous to genes. Specialised as academic research is, I choose not to venture into evolutionary explanations of individual behaviour in the industry.

But just recently the coincidence of two events brought the evolutionary psychology of individuals in our business to mind. I think this diversion from my usual research will interest you, so hang in there while I progress from my adventures to the theory to the practical implications for you.

Adventures with ostriches

First my two adventures. The first of these was with a firm who had asked me to guide its research and strategy making for a major launch. This was no sideshow for the company. The launch was going to be the centrepiece of a strategy for a disease area that was the bulk of its sales. To say it was important to get it right is an understatement. With a little help from me, its Head of Business Intelligence did a superb job.

When we looked at the research data, standing loud and proud among the quotidian findings was a beautiful piece of insight that went against industry wisdom, was evidentially solid and pointed the strategy firmly in one direction. We all agreed that it made the strategic choice a no-brainer.

I got on the plane home and left my clients to work through the detail. So, imagine my surprise when I eventually saw a strategic plan that, to all intents and purposes, ignored the research. Go figure, as my American friends say.

At roughly the same time, I was working with another firm on an organisational development project. It is on the cusp of a major transition and our work aimed to identify what organisational traits (strategies, structures, capabilities) it needed to change. The first phase of the work, which involved immersing myself deeply into the company and asking everyone a lot of questions, worked very well.

When I presented the results, the leadership team were awestruck. The best analysis of the business they had ever seen, to immodestly quote one of them. We agreed that they would translate my findings into a document to share with senior executives because, like many companies, they have a penchant for pretty slides over plain substance.

It was only after the pretty document went out, with my name on it, that I saw it. It was full of nonsense and any resemblance
to what I’d given the leadership was purely coincidental. Flabbergasted was not the word.

Evolved executive evasion

What the two cases had in common was that senior people had, on glimpsing reality, stuffed their heads in the sand and ignored reality. Afterwards, it became apparent that these very clever people had chosen not only to deceive their colleagues but also to deceive themselves.

Their intellectual contortions to justify their fact- defying position would have been funny had they not been so baroque in their construction. I was baffled by how and why they did this. Baffled, that is, until I remembered the excellent book by the evolutionary scientist

Robert Trivers: Deceit and Self Deception: Fooling Yourself to Better Fool Others. Space prevents me from doing justice to his thesis here but the essence of Trivers’ argument is that we humans, in order to better influence others, evolved the ability to deceive ourselves.

And that’s what I was seeing in these two cases and many others I’d witnessed in my career. A psychological capacity evolved for one good purpose had also led to another, potentially harmful, trait. Pleiotropy, to give it its biological name, just like sickle cell anaemia.

Lessons from Trivers

Trivers is of the ‘selfish gene’ school and, as he makes really clear in his book, if you think you’re ‘going to whip your genes into shape’ then you’re being naïve. And even though I belong to another school (the multilevel selectionists), I thinks he’s broadly correct. No amount of telling the CEO to remove his head from the sand will work because that genetic trait is too strong.

In my experience, the way to combat Chief Executive Ostrich syndrome is not to appeal to the company’s needs (‘We’re missing an opportunity here!’) but to engage another, stronger survival gene (‘If you do this, you’ll suffer’). I have to admit, however, that my real-world evidence for that approach is weak, perhaps 50/50.

The reality is that ostrich behaviour of the kind I described is strongly prevalent because, like sickle cell anaemia and malaria, it has evolutionary advantages. My explanation and weak solution may not help you much in practice but at least the next time it happens to you, you will be informed and frustrated, rather than baffled and perplexed.

Professor Brian D Smith works at SDA Bocconi and the University of Hertfordshire. He is a world-recognised authority on the evolution of the life sciences industry and welcomes questions at brian.smith@pragmedic.com

25th November 2020

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