narrows bias

Bias is everywhere in our industry

July 27, 2018
While we all would like to think that the decisions we make on what to invest in are based purely on facts and logic the reality is there are some inherent biases that play a role in whether we make a purchase or not.

We learned something interesting when working on the Guidance Report on Electric Trucks: Where They Make Sense. It’s a phenomenon called decision bias: I knew about this, but had not read the research!

While we all would like to think that the decisions we make on what to invest in are based purely on facts and logic the reality is there are some inherent biases that play a role in whether we make a purchase or not.

In a 2006 Harvard Business Review titled “Eager Sellers and Stony Buyers,” John Gourville explained, “The bias leads consumers to value the advantages of products they own more than the benefits of new ones.”

But that is only part of the bias equation. He added, “It also leads executives to value the benefits of innovations they’ve developed over the advantages of the incumbent products.”

The result is what he calls “a clash of perspectives.”

Because of the bias on the consumer’s side, new technology has to be three times better than existing technology, studies have shown. And it seems that manufacturers of new technology value the benefits of their new products over existing products by a factor of three. The result, according to Gourville “is a mismatch of nine to one, or 9X, between what innovators think consumers desire and what consumers really want.”

So those are the facts. Now how do we use those facts to help speed up the adoption rate of efficiency-enhancing products? Perhaps making both sides of the buy-sell agreement aware of the bias is enough.

If fleets know that they are biased in favor of equipment and technologies they already own perhaps they can be more open-minded when investigating whether or not a technology makes sense for their application.

As for manufacturers of these new technologies they would be wise to turn down the marketing hype about their new innovations and instead focus on the quantifiable benefits the technology will bring in real-world operation.

I think if both sides were a bit more realistic about what a given technology can do we might see quicker and more widespread adoption of the things that will raise the MPG number for all fleets not just those that have already made the investment that are getting them closer to the 12 MPG we at NACFE thing is both possible and realistic.

What do you think? Agree? Disagree? Comment below or send me a note. I am very interested in your thoughts on this.

About the Author

Michael Roeth | Executive Director

Michael Roeth has worked in the commercial vehicle industry for nearly 30 years, most recently as executive director of the North American Council for Freight Efficiency (NACFE). He serves on the second National Academy of Sciences Committee on Technologies and Approaches for Reducing the Fuel Consumption of Medium and Heavy-Duty Vehicles and has held various positions in engineering, quality, sales, and plant management with Navistar and Behr/Cummins.

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