executive coaching, mindfulness

Being mindful of cognitive biases in decision making as a leader of an organization

coginitive-biases-for-leaders

Your brain is incredibly complex. Because of this complexity, responding reactively and proactively to external stimuli and internal bias can be difficult to control.  Even the best leaders are prone to cognitive biases that might impact their decision-making skills.

The definition of cognitive bias

The phrase ‘cognitive bias was first devised in the 1970s by Israeli psychologists, Amos Tversky and Daniel Kahneman, who used this phrase to define people’s flawed patterns of thinking in response to judgment and decision problems (Tversky & Kahneman, 1974). Tversky and Kahneman sought to understand the exact biases that are related with this judgment and decision-making processes.

Cognitive bias is often your brain’s attempt to simplify information processing — we receive roughly 11 million bits of information per second, but we can only process about 40 bits of information at a time (Orzan et al., 2012).

Most people, however, do not want their biases to make decisions for them. Thus, it is crucial for leaders to be mindful of and learn how to control biases to decision making.

Although it may not be possible to prevent cognitive bias from influencing every judgment and decision you make, it is possible to learn how to recognize and derail bias and to make sure your decisions are based on facts and consequences.

If you’re reading this, you’ll be pleased to know that you have already taken the first step in being mindful of cognitive biases. Recognizing which bias impacts you the most is the first step toward combating it.

The different types of cognitive bias

As a result of Tversky and Kahneman’s research (and several other psychologists who have expanded on their existing research), we now have a current dictionary of our cognitive biases. Here, we will look into some of the most common forms of cognitive bias.

Cognitive biases are usually self-serving, which means there is a benefit to you personally if things stay a certain way. Your biases are working overtime to give you all the reasons why you should things in a way that helps you personally, even if that’s not for the greater good.

Here are the main types of cognitive bias.

  • Confirmation bias

Confirmation bias refers to when you avoid engaging with any information that might contradict what we already believe. In your leadership role it might be that you consistently turn to people, you know will agree with you and shut off conversations with those who might have an alternative view. In short, confirmation bias is the tendency to take new information as confirmation of your pre-existing beliefs and opinions.

To avoid confirmation bias, you must train yourself to hear diverse opinions from your own, take them all in and then look at the pros and cons of each new idea. As leaders, we must be willing to accept diverse opinions to make inclusive or sound decisions.

  • Bandwagon bias

Bandwagon bias refers to the tendency to believe something because everyone else believes it, without taking time to hear or explore alternate opinions. In business, this might manifest itself as believing that employees working from home are less productive, because everyone else insists that having staff in the office is best for productivity. Alternatively, you might jump onto the latest office fad, like standing desks or mood lighting, just because big corporates are doing it.

To minimize the chances that you will be influenced by the bandwagon bias, remain mindful of what is best for your employees based on what you know about them, not what everyone else is saying.

  • Anchoring bias

Anchoring bias refers to sticking with the first thing you learned, even if there is additional information that might disprove your theory. For example, you might think a particular creative agency is the best because they previously won an award, even though their work has been substandard for a while. Or perhaps you assume something should cost a certain amount because that’s what you’ve been told, or what you previously paid for it, even though it is possible to negotiate a cheaper price.

To minimize the chances that you will be influenced by the anchoring bias, constantly check in with your information credibility, the date you received that information and whether there are other external factors to consider. Keeping an open mind to fresh perspectives is a great way to achieve this.

  • Halo bias

Halo bias refers to when the appearance of one thing has an impact on how you feel about something else, even though they have nothing to do with one another. Halo bias has been observed across many aspects of life, including in court, where people are more likely to acquit an individual of a crime if they are attractive.

This might manifest itself in business as a bias towards a staff member who is sociable and attractive, leading to the presumption that they are likeable.

To minimize the chances that you will be influenced by the halo effect, you can look to various cognitive debiasing techniques such as slowing down your reasoning process. For example, you could try to develop two different perceptions of someone when you first meet them.

  • Ostrich bias

Ostrich bias refers to avoiding information you that don’t want to deal with. For example, perhaps you have been told numerous times that a team member is consistently underperforming. You have a good working relationship with this person; however, so you avoid the negative comments and instead hope they will go away.

To minimize the likelihood of being influenced by the ostrich bias, it has been Deal with issues head on if you want to avoid this form of bias.

  • Choice supportive bias

Choice supportive bias refers to the tendency to remember choices and decisions we make as having better outcomes than they do, to affirm our beliefs that we are right. For example, at work, this might look a scenario whereby you will choose to work with Windows because it is what you have always used and talking about how overpriced Apple MacBooks are.

A way to minimize the choice supportive bias, is by trying to prove your opinions wrong, rather than confirm that they are right. It’s again important to seek multiple perspectives and weigh up the pros and cons, before ultimately reaching a decision.

  • Fundamental attribution error

The fundamental attribution error refers to the tendency to overweight dispositional factors and underweight situational factors when explaining a person’s behavior. For example, in one study when something bad happened to someone else, subjects blamed that person’s behavior or personality 65% of the time. Then, when something bad happened to the subjects, they blamed themselves only 44% of the time, blaming the situation they were in much more often.

So, the fundamental attribution error explains why we often judge others severely while letting ourselves off the hook at the same time by justifying our own unethical behavior.

At work, this might look like presuming that someone who is off sick often, is lazy, rather than taking the time to learn what mental or physical situation is contributing to the frequency of their days off. To avoid the fundamental attribution error bias, Harvard Business school, recommend in this article that, “when you become resentful at someone for a bad “quality” they demonstrate, try to make a list of five positive qualities the person also exhibits. This will help balance out your perspective and can help you view your co-worker as a whole person instead of through the lens of a single negative quality.”

  • Illusory correlation bias

The illusory correlation bias refers to the phenomenon of perceiving a relationship between variables (typically people, events, or behaviors) even when no such relationship exists. Humans love patterns and signs because we like to think we can control or predict outcomes. For that reason, we learn from experiences we have been in before.

The illusory correlation bias might look like refusing to hire someone from a particular area of America because we had hired two unsuccessful employees from the area before.

When we recognize a pattern, we like to stick to what we know. By sticking to these patterns, we feel as though we can predict or avoid certain outcomes. This might manifest itself in ordinary life as wearing our ‘lucky pants’ or completing a ritual before we leave the house.

There is an easy-to-follow strategy you can use to identify your hidden assumptions and prevent yourself from making an illusory correlation. It’s called a contingency table and it will help you to recognize the non-correlated information.

The strength of your decision as a leader

Decision-makers must assess risks and opportunities and make a commitment to being mindful of their biases.

As Dr. John Behr, an executive coach, with over 25 years of experience, says:

“Despite their best intentions, executives fall prey to cognitive and organizational biases that get in the way of good decision making.

Facing high pressure, multifaceted circumstances, numerous deadlines, meetings, reports, too much, too little, or conflicting information is the part and parcel of being a leader. When making decisions, leaders can take a strategic or tactical view. I think skilful strategists tend to draw logical implications in precisely clear and tightly structured circumstances. This allows them to see the decision-making implications of all factors that shape and constrain decision making.

Methods employed for decision making are just as important. Sometimes, leaders can fall into the trap that the same process to decision making must be applied to every problem-solving moment, regardless of the implication of that decision. If the decision has a minor consequence, as opposed to a major consequence, the leader will use the same method as their ‘go-to’ technique and struggle to differentiate.

Thus, it’s important that, as you process information and draw on the variability of your own and other people’s knowledge, you appreciate and address your own cognitive biases and use decision making techniques that are suitable for the consequence.”