Future thinkers have to be careful about overinflating our expectations. It’s to look for opportunities, but it’s also easy to get carried away as well.
Hype bias occurs when a foresighter is overoptimistic about the positive social, economic, or environmental benefits or outcomes of a particular behavior, process, science, or technology. They overthink and overstate what is possible.
Gartner, a management and foresight consultancy, identified various stages of hype bias in their famous hype cycle. As a new future meme like CD ROMs, 3D Printing, or Ebola grows in awareness, its sexier, scarier, or more extreme elements will often be over hyped and over promoted in the short term (a “bandwagon” phase) creating a “peak of inflated expectations”. It can be a smart strategy for a sales and marketing department to manufacture hype, as it allows them to book revenues from credulous people who are themselves too-excited about a particular future, and who overstate its importance, or its likely arrival date. If those accounts are managed well, there may not even be blowback later.
But eventually, those who have been subjected to the hype then have a natural reaction of distancing and disgust, and even anger, with themselves at least, if they’ve overreacted, overspent or too quickly tried to implement the still-immature and functionally limited ideas or technologies. In this “trough of disillusionment” both clients and foresighters can become unjustifiably pessimistic. This is often the time value seeking investors come in and buy up near-bankrupt companies who overinvested early, at fire-sale prices. Finally, after a long period of riding the learning curve, the idea or technology may finally start giving off real benefits, and enter the “phase of productivity”. Gartner has flattened the shape of the productivity phase in this picture. It’s actually an S-curve, a period of exponential capacity or adoption growth, followed by an eventual plateau.
Hype bias afflicts many foresighters, amateur and professional alike. Read Bob Seidensticker’s Future Hype (2006) for some great examples of future hype in the digital technology industries. Though Siedensticker himself is not accelaware, he has a great nose for hype, and the economic and psychological forces that make it so ubiquitous. Leaders seeking to improve strategy in hype-filled industries, like information technology, will also benefit from Fenn and Raskino’s Mastering the Hype Cycle (2008).
Perceptive clients can take advantage of the predictable reactions of competitors who are slower to get out of hype’s psychological traps. These insights can also be applied to business cycle, a natural system strongly influenced by both hype and fear. See Navarro’s The Well-Timed Strategy (2006) for great advice on using countercylical strategy with your clients, and managing the business cycle to competitive advantage.