The world is a complex place. We cannot possibly take all of this complexity in at once. And so we build mental models to simplify our internal versions of reality. We navigate through life and make the majority of our business and personal decisions based on our mental models.
The trouble begins when our mental models do not match reality. In some instances, the consequences are trivial. However, when it comes to developing a product or business, the consequences can make or break our success.
When reality deviates from our mental model, we start to feel lost in the same way that someone might feel lost in the woods. It sets off the same emotional reaction. At first we feel disoriented. We then enter a state of denial, where we avoid paying attention to evidence that all is not what it should be. If we continue this course, we will eventually enter a state of panic, realizing that we are operating under a set of assumptions about the world that do not hold true in our current predicament.
Panic is characterized by a tremendous expenditure of unproductive resources. We run in circles. We push against walls. We are unable to be effective because we are still operating in an old mental model and do not know how to effectively navigate our new set of business circumstances. Eventually, we can accept our market predicament, revise our mental model and start operating within its context. Or we can become resigned and give up.
Outdated Mental Models Affect Both Established and Emerging Companies
Emerging and innovative companies are very prone to this emotional roller coaster because they are navigating new situations and dealing with unchartered territories. They will inevitably run into contexts that do not match their mental models. Most emerging companies are very passionate about their business and product; yet, they tend to have limited resources. The combination of passion and scarcity can lead to a state of emotional rigidity. Underlying this is the fear of being proven wrong--and the potential implications of being wrong seem very intimidating.
Even established companies find themselves lost in their marketplace with outdated mental models during times of change. By definition, their mental model has worked very well for them in the past. They have historically been the market leaders with loyal customers; the competition has been far behind. As a result, established companies tend to be very committed to their mental models. They can be in a state of denial about changing conditions in their marketplace for several years before anyone recognizes that the rules of the game have changed. In the meantime, they may lose market share to a better product, disruptive innovation, or emerging business model introduced by one of their competitors.
Continuous Validation of Mental Models is Critical
The most important thing a company can do to avoid getting lost in an outdated mental model is to validate it regularly. This means conducting customer, user, market, and industry research on an ongoing basis. The purpose of this research is to test the company’s hypotheses around its business and validate assumptions about its customers and market.
Because mental models are based on our past experiences, it is important to validate them every time we start a new project. And to test whether the conditions of the past still hold true in today's context. We are especially vulnerable if most of yesterday's conditions hold true, as we are lulled into believing that we are working with something familiar. Continuous validation is therefore critical for avoiding getting lost in our mental model and steering our business toward ongoing success.
* Joanna Malaczynski is a Principal at Desi Potential (desipotential.com), a consulting company that helps innovative companies gain market traction.
Her article on mental models was inspired in part by the work of Laurence Gonzales in his book entitled “Deep Survival,” which documents survival attributes of those who get lost in the woods.