Imagine you're an executive at a large multinational corporation. Your annual team performance review is approaching, and you're relying on feedback from multiple sources to evaluate your team's effectiveness and efficiency. However, all your information comes from a single department head, creating the risk of common source bias. This could result in unfair judgments and missed opportunities for improvement. A famous case that highlights this risk is Kodak's decline in the 2000s when it failed to recognize the rise of digital photography, predominantly because its feedback loop was too centralized.
Common source bias, also known as single source bias, occurs when data or judgment is gathered from only one source. This bias can lead to potential errors in decision-making as the data could be skewed, inaccurate, or incomplete. It inhibits diversity of perspective, restricting the capacity for objectivity, innovation, and resilience to unforeseen challenges.
In the early 2000s, Kodak, a dominant player in the photography industry, failed to adapt to the growing trend of digital photography, even though it had the technical expertise. Its feedback and decision-making channels were too focused on the profitable film business and neglected insights from other areas in the organization that recognized the potential of digital technology. This severe common source bias eventually resulted in Kodak's bankruptcy in 2012.
The downfall of Kodak serves as a potent warning of the impacts of common source bias. As an executive or team head, ensure you take precautions to avoid this bias. Gather information from a wide array of sources, encourage a culture of open dialogue and continuous feedback, and prioritize diversity within your team. By doing so, you will not just increase fairness in decision-making processes but also enhance your team and organization's resilience and innovative capacity.