Thursday, February 4, 2021

The Optimism Bias and Watch Town - Or Why Unrealistic Goals Are Never Met

"You just don't understand the watch business".

If I had a nickel for every time a Watch Town "lifer" hit me with that statement, I'd have enough money to buy a Patek Philippe at full ask. Watch Town is not wholly unique, but since the 90s several of the Town Fathers and would be apostolates have operated in what could best be described as a reality distortion field.

Now in fairness, the leadership of watch brands has traditionally been viewed as the reward for a successful career in sales. This has shifted somewhat in recent years, as adult supervision has become more and more necessary, but by and large the shot callers are frequently operating under the overly optimistic scale of what Tali Sharot spoke about in her Ted Talk -

For those of you unfamiliar with the Optimism Bias, Wikipedia summarizes it quite neatly -

Optimism bias (or the optimistic bias) is a cognitive bias that causes someone to believe that they themselves are less likely to experience a negative event. It is also known as unrealistic optimism or comparative optimism.

Optimism bias - Wikipedia

One of the key talking points (at least to me) was the difference in perception we experience depending on our level of expectation. To paraphrase - those with high expectations tend to be happy whether they succeed or fail, because if they succeed it is because they are "amaze-balls"! Curious to relate? If they fail it is because the situation was unfair, and the outcome was beyond their control. Conversely, those with low expectations feel that it is only natural when things don't go their way, because they just weren't up to the task. If they do succeed? They got lucky and next time they probably won't.

Now one of the very revealing points Professor Sharot put out there is the disconnect optimistic people sometimes experience when things go south. Simply put, common sense would tell you that when plan A doesn't work (i.e. your expectations are not met), move on to plan B (i.e. alter your expectations and/or plan). One of the studies that Professor Sharot and her team conducted was interviewing people about their perceived likelihood of bad things happening to them. If the person had lower expectations, they would naturally set that likelihood at a higher level. If they were more optimistic they would set that at a lower level. For example:

Likelihood of contracting a dangerous illness:

Low expectations - 50%

High expectations - 10%

REALITY - (for the purposes of this example) 30%

In a follow-up session when asked the same question by a different interviewer:

Low expectations - 35%

High expectations - 11%

In other words, despite factual data staring them in the face, the (overly) optimistic person continues to cling to their unflinching belief that things are (and will be) better than they really are. 

And now we come back to what makes Watch Town tick - in the upper echelons, it is primarily driven by people with very high expectations who suffer from the negative aspects of the Optimism Bias. This is what causes brands to overspend on media and advertising, sponsored partnerships and to continue to hire exactly the same type of person who (unfortunately) did not succeed in the previous two similar posts that they had with other organizations. I  remember a conversation with a brand manager who had hired a guy who was widely regarded as the Biff Loman of the watch business. When questioned about the wisdom of this choice, the brand manager assured me that (Hell, let's call him Biff) Biff had been unlucky, people didn't support him, there was a flood, locust, famine... you get the idea. Nothing was Biff's fault, forces and fate conspired against him. Needless to say, Biff was off to pastures greener, pursuing "new" professional opportunities within 5 months.

Let me put it in a different context - if a brand experienced a 100% staff turnover in a department over a 36 month period, serious questions would be asked about the department manager and the CEO in general. So why then, gentle reader, is a similar attrition rate now the normal in the sales and senior leadership positions in Watch Town?

Now to be clear - there are some amazing success stories in both sales and the big chair in the watch business. But they are becoming more the exception rather than the norm. Perhaps it is time for the Town Fathers of Watch Town to reexamine their Optimism Bias and set a more achievable set of goals.

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