Market Place Rumors – and the FDA Docket
G. Wayne Moore, B.Sc., MBA, FASE
October 11, 2016
Rumors are unverified information statements that people circulate to make sense of an unclear situation or to deal with a possible threat. Rumors are about issues or situations of topical interest. Rumors are like news except that news is accompanied by solid evidence; rumor is not. A classic example: “I heard that our department is being downsized; what have you heard?” Rumor discussions are thus collective sense-making and threat-management efforts. The threat could be physical or psychological. In either case, the rumor helps people actively or emotionally prepare for negative events, or to defend against threats to their self-esteem.
Rumors appear to be a regular feature of social and organizational landscapes. For example, in corporations, rumors reach the ears of management about once per week on average. Rumor activity waxes and wanes, but seems especially prevalent when important changes occur that are not well understood and may be potentially threatening.
Research has shown that people are more likely to spread rumors when they are worried about a dreaded event or outcome (e.g., new FDA regulations that will impact the business), when they are uncertain (i.e., filled with questions about what events mean or what will happen), or feel that they have lost control in a situation that is important to them.
Although people spread rumors for various reasons, in the corporate world of markets, as research also shows, the most prevalent reason is to project “being in the know” with the latest information, for example, in an attempt to increase one’s social standing, or “butter up” to a company they do business with. A “wink-wink”, “nod-nod”, stir the pot and start some trouble motivation. We, unfortunately, often see this type of rumor mongering in our market.
The FDA Docket on potential regulation of 3rd Party repair entities has spawned, as might be expected, a number of rumors in the market. As stated above, rumor activity waxes and wanes, but seems especially prevalent when non-deterministic but potentially important changes may occur. Rumors often start based on the lack of concrete knowledge; we humans do not like missing data points so mental interpolation between data point is often “filled-in” in an attempt to complete the picture – try to make it less scary or more predictable. Normally people believe rumors—even the craziest ones— when the rumor fits in some way with their previously held attitudes. The FDA is known for often taking a long time to come to any decision regarding changes in current regulations, creating new regulations, or the application of current regulations to a broader audience, in this case 3rd Party servicers. This long time period is fertile ground for rumors to fly in all medical devices markets. The next milestone in the FDA Docket is the October 27 – 28, 2016 workshop: “Refurbishing, Reconditioning, Rebuilding, Remarketing, Remanufacturing, and Servicing of Medical Devices Performed by Third-Party Entities and Original Equipment Manufacturers”. I will be presenting at this workshop with my focus being on diagnostic ultrasound. I believe that more information on the potential direction(s) the FDA might take regarding the 3rd Party servicing issue will be forthcoming prior to the end of this calendar year – note that I used the word “believe”, I have no special knowledge of what the FDA may or may not do. If I called someone at another ultrasound company and said; “I know that the FDA is going to start regulating 3rd parties” I would be a liar.
I recently had someone tell me that he believed a particular rumor floating about to be true because he heard it from “seven” different people. As if a lie told by seven, or seven hundred different people somehow made it true. I explained to this fellow that perhaps he should examine the motives and the credibility of the seven people spreading, and then speak directly with the person alleged to have started the rumor prior to forming a belief. Rumor accuracy is generally reduced by limits to attention and memory, relationship – and self-enhancement motives, high anxiety, the inability to check rumor veracity, and transmitting the rumor without discussion. Therefore, if you believe a rumor without applying critical thinking skills you have just become part of the mindless rumor mill.
1) Allport, G. W., & Postman, L. J. (1947). The psychology of rumor. New York: Holt, Rinehart & Winston
2) Nicholas DiFonzo, PhD, and Prashant Bordia, PhD (2007). Rumor psychology, Social and Organizational Approaches. American Psychology Association ISBN 978-1-4338-1424-2
About the Author, G. Wayne Moore:
A 30-year veteran of the diagnostic ultrasound market Wayne has held senior level positions with several major medical equipment manufacturers, including Honeywell Medical Systems and Siemens Medical Solutions. Wayne has been directly involved in the development and commercialization of more than 15 technologically intensive ultrasound systems. He is widely published in diagnostic ultrasound literature, a sought after speaker at medical imaging conferences, has served as an expert witness in multiple ultrasound litigations, and holds more than 16 United States ultrasound related patents. Wayne obtained his MBA from the University of Denver – Daniels College of Business.
He was elected as a Fellow of the American Society of Echocardiography (FASE) in 2009.