Harvard Business Review – How Loss Aversion and Conformity Threaten Organizational Change

To achieve true transformational change, CEOs must have more than a strategic plan. To effect actual change, they need to understand how biases — their own, and their employees’ — can shape behaviors and decisions, and prevent them from achieving what they set out to achieve.

CEOs need to be especially aware of how the subtle forces of bias can operate in our subconscious and influence our choices. Let’s take a look at the two I see most often: loss aversion and conformity.

Loss Aversion
Picture a management team, composed of highly accomplished individuals with long tenures at the company, gathering at the annual planning meeting. The CEO has been in place for five years, business performance has been strong and Wall Street has rewarded shareholders handsomely.

More of the Harvard Business Review article from Sean Ryan