Dopamine
and Ego: The Silent Enemies of Lean Growth
Throughout my career in product, growth and marketing, I’ve had the opportunity to work with amazing companies in both my 9-5 and agency capacity. The most effective organizations approach growth iteratively, constantly questioning their own assumptions. Yet, many founders and executives, especially those who haven't been in a high-growth, data-driven environment, struggle to adopt this mindset. One surprising culprit behind this resistance? Dopamine.
Dopamine: A Double-Edged Sword in Decision-Making
Dopamine, a neurotransmitter, is the feel-good chemical that floods our brains when we achieve something. Be it a founder, head of marketing, or a senior product manager, this dopamine surge occurs when you stumble upon that 'eureka' moment. There's an exhilaration, a firm belief that this idea is nothing short of groundbreaking. But here lies the trap. This dopamine-induced confidence can blind us, and I've observed countless companies, from startups to giants, squander millions based on these 'gut feelings' instead of relying on solid, validated data.
So, why does this fallacy persist? Occasionally, these spontaneous decisions do pay off. This occasional success is the real danger. Imagine flipping a coin, getting heads, and then presuming you've unlocked the secret to predicting every subsequent flip. This false sense of success is misleading and can be especially pronounced in smaller organizations. Many of these companies lack a comprehensive data and analytics infrastructure. Without this foundational bedrock, decisions often become the domain of those who speak the loudest, debate the best, or simply have seniority. And yes, sometimes they will get it right. But attributing sporadic successes to skill rather than luck can be a grave error.
This flawed approach often remains unnoticed until a company is striving for its next big growth spurt. It's akin to someone riding a winning streak in a casino, blissfully unaware that the odds will catch up eventually. For founders and leaders, understanding this is crucial. While there's no intention to belittle the intuitive genius of these entrepreneurs, it's essential to recognize that relying solely on 'luck and gut' has its ceiling. At some point, tangible, hard data about your funnel becomes indispensable for continued success.
The Danger of Subjective Data Interpretation
In today's era of data abundance, one might assume that making data-driven decisions is a breeze. Yet, the ground reality is starkly different. Many organizations unwittingly interpret data through tinted glasses, reaffirming their preconceived beliefs. This skewed perspective is especially prevalent in businesses lacking a culture that values unbiased A/B testing and impartial data analysis.
A deeper issue festers beneath the surface: a faux embrace of data-driven culture. Individuals who fall into this trap are often avid blog readers, familiar with the buzzwords of the day – 'fail fast', 'experiment', and the like. They might even usher in processes they believe are grounded in data. Regrettably, these endeavors often serve to vindicate their biases rather than challenge them. Folks point to an out of context chart that supports their initial ideas and feel they have “used data to solve problems”, when in reality they have used it to further solidify their world view.
This phenomenon is something we at Iter8 witness repeatedly when we engage with new organizations. Our initial step is always focused on auditing and rolling out the necessary analytics infrastructure to foster informed decision-making.
The Complex Terrain of Ego in Decision Making
It's a human inclination to equate being "right" with success. Leaders, in their quest for validation, often lean into personal biases over objective data, leading to decisions that may divert resources and sidestep potential opportunities. This dilemma intensifies when trying to embed a culture of rapid experimentation.
However, it's crucial to understand that these individuals aren't inherently flawed or misguided. Like all of us, they are deeply rooted in their own perspectives and identities. Many professionals anchor their self-worth in their professional acumen, equating personal correctness with effectiveness. While it's natural to desire correctness, it's more about evolving correctness over time rather than immediate rightness. Amazon's leadership principle, "leaders are right a lot," underscores this, but it's complemented by other principles such as "dive deep" and "earn trust." These guidelines emphasize the importance of challenging personal biases, inviting collective insights from teams, and, importantly, heeding the insights from data. Embracing this disciplined approach, especially if it's a new paradigm, requires effort, introspection, and continuous learning. Navigating the Data-Driven Reality Check
The most prominent hurdle we've observed after activating live data? The utter dismantling of long-held team biases. And the immediate aftermath is almost predictable: attempts to debunk or discredit the fresh data. The crux of the problem? Each team member has operated in their bubble, harboring distinct perceptions and convictions about the company's workings. The introduction of unvarnished data acts as a mirror, reflecting a reality that can be hard to digest.
Recognizing this organizational shock, we've integrated preparatory measures into our approach at Iter8. Guiding companies through this transformative phase is paramount, ensuring that accurate data becomes a unifying force rather than a divisive element.
Embracing the Growth Mindset: Valuing Progress over Perfection
Introducing a data-driven culture is akin to swimming against a strong current for many organizations. It’s challenging to pivot from the comfort of the familiar "know-it-all" mentality to a culture that values continuous evolution and learning. One of the foundational shifts is creating an environment where it’s not just acceptable, but encouraged, to question, test, and grow.
Central to this transformation is our approach to problem-solving. When faced with a funnel's weak link, the objective isn't to immediately fix it with a preconceived solution. Instead, we gather a diverse group of experts from the organization to hypothesize why this weakness exists and brainstorm potential remedies. We embrace the unknown, understanding that our initial solutions might not be the silver bullet.
Solid, tangible metrics are the roadmap for this journey. They offer clarity in evaluation, enabling us to discern what’s working and what’s not. But remember, the beauty of data-driven decision-making is that it’s layered. While an experiment might bring about a slight uptick in one metric, it could reveal a treasure trove of insights that influence subsequent strategies.
Think of it like baseball: while home runs are thrilling and noteworthy, the foundation of a successful game often lies in singles and doubles. It’s the incremental gains, the consistent base hits, that drive a team forward. Similarly, in an organization, it’s the compounded learnings from each experiment that foster growth.
To truly thrive in this environment, the corporate culture should exude excitement for this journey of discovery. Employees should be motivated by the learning process rather than intimidated by it. Rewards and promotions should align with this mindset, ensuring that curiosity and adaptability are as valued as immediate results.
In Conclusion: Dopamine-Driven Evolution
Navigating the world of business means balancing instinct with insight. While the initial dopamine rush of a 'eureka' moment is intoxicating, it's the sustained thrill of seeing our ideas validated and metrics meaningfully moved that should drive us. The path to true success? Continually questioning our first instincts and embracing the reward of data-backed achievements. In doing so, we ensure both our instincts and strategies evolve in tandem for a more impactful future.
Why We Offer Free Audits
To demonstrate the value we can add, we offer free audits of your marketing, sales, and product processes and infrastructure. Why do we do this? Because every audit makes us smarter, which, in turn, helps us serve our clients better. We’re in it for the long haul, and we love learning from a variety of businesses. If you’re interested, or just want to talk shop sign up here.
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