Added on June 25, 2012 John O' Gorman

Winning The Deal: The Perils Of ‘Glass Half Full’ Thinking

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There is an in-built tendency in most salespeople to over-estimate the likelihood and timing of a deal. That is a scientific fact, however this ‘glass half full thinking’ can be a real impediment to deal success.

Why The Seller’s Glass Is Half Full

The glass half full is a simple yet effective means of categorizing people based on the tendency towards either optimism or pessimism. However, research shows that there are up to four times as many full glasses as empty ones.

Scientists tell us that up to 80% of the population have an in-built optimism bias. Our experience with salespeople suggests that the same, if not a higher, figure applies.

‘Most salespeople tend towards optimism – the pipeline is half full and the deal is half won.’

Most salespeople tend towards optimism. That means the pipeline is half full and the deal is always half won. The problem is that this can limit the seller’s ability to spot early warning signals, or aggressively pre-qualify sales opportunities. It directly impacts on the accuracy of sales pipeline forecasts.

The Seller’s Optimism Bias

All selling is speculative – with increased competition and more stalled deals, accurately predicting the likelihood and timing of a deal can be a challenge. In such an uncertain environment sellers get their motivation from the anticipation of a positive outcome rather than an assessment of reality. More scientifically put we have an optimism bias.

Being optimistic can serve a useful purpose – it gives us comfort or hope and empowers us to take action. Indeed, some scientists link optimism to positive mental health and good social relations. On the other hand however it can blind us to dangers that could very well trip us up.

The Seller’s Information Bias

The salesperson’s optimism bias is deep rooted. That is because it is underpinned by information, attention and perceptual biases. Put simply the seller is likely to overlook, forget, or dismiss negative events, premonitions and experiences, while actively screening for positive, reinforcing and affirming ones.

‘A salesperson is also prone to unknowingly block out negative information regarding a deal…’

A salesperson is also prone to unknowingly block out negative information regarding a deal and selectively process information that supports a positive or optimistic view of closing the sale.

Our view of sales reality is skewed towards the positive. Our brain rationalizes a deal in a way that fits our optimism bias. That means we approach the deal with rose tinted spectacles, or to be more precise a distorted view of the real likelihood of success. The seller’s expected outcome is prone towards unrealism.

The Seller’s Self-Enhancement Bias

Not only are we prone to more positively view events around us, but we tend to take a positive view of our own performance too. The result is an inflated self image, or what scientists call a self-enhancement bias. For example, even though the average win rate may be 20% for deals of a certain type, we will typically expect our own success rate to be higher.

The self enhancement bias means that the salesperson is hindered in terms of:

Learning from the past
Critically assessing his/her handling of a deal
Spotting early warning signals.

That is a dangerous combination and is what the rigor of our sales processes, sales stages and pre-qualification check-lists seeks to control.

Correcting Your Deal Optimism Bias

What can you do to correct the in-built biases that distort sales reality? Well, you can correct it by cutting back probabilities and timings, but here are some tips that are aimed at correcting the bias at its source:

Make looking out for the warning signals a key priority in opportunity reviews. A lot of what happens in a deal can be foreseen. You will find a list of the most common early warning signals here.
If the salesperson is aware of bias then he, or she can take precautions to guard against it. You can increase awareness of the optimism bias by sharing this article (or the science which it summarizes) with your colleagues.
Being able to more accurately read the buyer and the buying process is key. Ground your optimism based on a more thorough understanding of the 3 dimensions of the deal – that is the buying process, the buying logic (or business case) and the buying team. Ask better questions and use these variables to aggressively profile and pre-qualify each key opportunity in your pipeline.
It is time for remedial optimism. That is a realistic (even pessimistic) view of deal success that ends up being positive because it causes the seller to take remedial activity to boost the odds of winning the deal. Put simply, it can be positive to be negative about a deal.
Optimism is a natural defence mechanism that appears to be closely tied to the emotional centers to the brain. The implication for managers include:
• Avoid putting sellers on the defensive in their conduct of opportunity reviews.
• Create a culture that is high in trust, tolerates risk and does not indulge in blame.
Sales manager skepticism can be a very healthy thing. The term “skeptic” derives from a Greek noun, skepsis, which means examination, inquiry, or consideration. It is the quest for more information, greater objectivity and understanding. The manager’s sceptical ying is essential to balancing the sales person’s optimistic yang, so to speak.
Encourage salespeople to move probabilities and dates up as well as down. As managers we can be too quick to say ‘but you said last month that the probability was 60%!’ resulting in a reluctance on the part of salespeople to adjust probabilities, or timings.
The optimism bias can be compounded by group think – that is where an artificial consensus is maintained within the dynamics of a team working on an opportunity/set of opportunities. The manager should encourage people to speak their mind in sales meetings and engage with people outside of meetings to understand what they are really thinking.
What are you optimistic about? Sounds like a strange question, but if salespeople were optimistic about their ability to effectively pre-qualify and to spot early warning signals for a deal that would likely have the effect of ensuring a more realistic view of the deal and what work it requires.

Note: If sellers tend towards optimism so do buyers – it therefore has implications for how you sell to them.

If you would like more information on the Optimism Bias get the book, The Optimism Bias: A Tour of the Irrationally Positive Brain or watch a short video of the author Tali Sharot on TED.