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In simple words Status Quo Bias is resistance to make any change for any thing unfamiliar. How it prevents organizations to make impactful decisions: Some examples: 1. Kodak's Reluctance to Digital Photography - Kodak was a pioneer in film photography but failed to transition to digital despite having early technology. Their commitment to the status quo of film photography led to their decline 2. Nokia's weak / slow Response to Smartphones: Nokia dominated the mobile phone market but was slow to adopt smartphone technology, allowing competitors like Apple and Samsung to take over 3. Blockbuster's Failure to Compete with Netflix: Blockbuster was slow to adopt a digital streaming model, sticking to its brick-and-mortar rental stores. This allowed Netflix to capture the market How to prevent Status Quo Bias: 1. Support the innovation culture – Google encourages a culture of innovation by allowing employees to spend good amount of their time on projects they are passionate about, leading to products like Gmail and Google Maps 2. Incremental Change and Pilot Programs – Amazon regularly tests new ideas through pilot programs and small-scale rollouts (e.g., Amazon Go stores) 3. Customer-Centric Approach – P&G uses a customer-driven innovation model to develop new products based on deep consumer insights 4. Adopting new Technology - GE embraced digital transformation by investing in the Industrial Internet of Things (IIoT) to optimize operations

Status quo bias is defined as the continuing current strategy or idea and rejecting new strategy or ideas even though it may change state of affairs. It was first identified by Mr. William Samuelson and Mr. Richard Zeckhauser in 1988 in the academic article “Status Quo Bias in Decision-Making.” They have done various experiments regarding given the choice between the status quo and a new option and they found that people were more likely to follow already existing situation. It is the situation where decision is taken emotionally rather than logically. Whenever changes occur or proposed then people may feel uncomfortable where the outcome is unknown. This tendency is to keep people themselves safe and the things continue as it is. Ultimately status quo bias negatively affects ability to make decisions. Due to this people may miss valuable opportunities. Status quo bias can also hinder the growth of a business. If top management is not willing to take risks which could benefit the business at large, the company could begin to stagnate. Examples of Status Quo Bias in the Workplace? If a company already have CDA with vendor and CDA is about to expire. Then company will renew agreement without giving opportunity to another vendor which may be better than earlier. When a company is introducing SAP system to replace ERP then employee show preference for keeping existing ERP for which they are more familiar. However, in actual scenario, SAP provides better flexibility and more options for management. How to Overcome Status Quo Bias? If you’re in a leadership position then it is up to you that how to communicate organizational change to your team. Learn to recognize status quo bias in yourself and others It is a leadership skill that understand status quo bias when it happens. Weigh the advantages and disadvantages Sometime status quo bias may be beneficial to take wrong decision. So, we need to identify pros and cons for this. Collective decision needs to be taken. Frame the default option as a loss We need to consider loss as a default option according to loss aversion principle. Follow the REDUCE framework Leader need to establish certain framework that reduces barrier for change.