The corporate acquisition had barely been finalized when the divisional CEO – my boss – called to discuss moving one of the operating units from the new company into the company I ran. “Kathi,” he argued, “it makes perfect sense. Most of their clients are media companies, like your clients. But their profits have been slowly and steadily declining over the past few years. I think this move could energize the employees and benefit the products they offer by reexamining them from a syndicated research mindset. Think about it. But I firmly believe it is the right move.”

I was new. I had much to learn about the business I was running and I needed to give him an answer quickly. I didn’t want to deal with another business, one that was declining and needed attention and I didn’t take the time to really think about what the possibilities might be. I came up with a number of cogent business reasons why it was the wrong move, and, good manager that he was, he deferred to my judgment.

But in my “cogent business reasons” I had fallen victim to my own unconscious cognitive bias, cognitive bias that is well documented in the social science literature:
• I made a quick decision…
• Without gathering real facts;
• I favored the present over the future;
• I avoided risk.

My decision was self-serving and, in the long run, expensive and counter-productive to the business. A number of years later I realized what a major mistake I had actually made. I ended up absorbing that operating unit anyway, which was still in the corporate family, because a competitor had grown, offering a similar product but had made cost-reducing modifications, and they were getting a bit too close to our core business for comfort.

When I hear the word “bias” I first think about gender or racial bias but “bias” actually encompasses the many cognitive shortcuts we take everyday. Seeking out actual facts and thinking about them is time-consuming and hard, particularly in this information age when we are awash in information overload and pressed to act quickly. Our brain is wired to develop shortcuts. In fact, Wikipedia lists more than 175 cognitive and social biases that have been documented by psychologists and behavioral economists, ranging from the IKEA Effect, which is “The tendency for people to place a disproportionately high value on objects that they partially assembled themselves, such as furniture from IKEA, regardless of the quality of the end result” to Confirmation Bias, defined as “The tendency to search for, interpret, focus on and remember information in a way that confirms one’s preconceptions.”

Our brains develop shortcuts to deal with four general problem areas:
• Too Much Information: We have so much information to process we must actively filter our information.
o We tend to see and remember things that are related to things currently loaded in our memory.
o Unusual or surprising things become more important.
o We notice change.
o We are drawn to details that confirm our own beliefs.
o We notice flaws in others more than our own flaws.

• Gaps in Understanding: While we have a lot of information we might not be able to really sense what we’re taking in so we fill in the gaps and find patterns within incomplete data.
o We fill in missing information with stereotypes and generalities.
o We are more positive about people and things we’re more familiar with.
o We assume we know others and how they think.

• Need to Act: We never have the time or ability to incorporate all the information we need. We must make decisions in real time with what we think we know.
o We favor the present over the future; we relate more to individuals than to groups.
o If we’ve already invested time and energy in something, it’s hard to let it go.
o We tend to avoid risk.
o We tend to favor options that are simple rather than complex.

• How Do We Remember: With so much information, how do we decide what to remember and what will be useful in the future?
o We edit and reinforce memories after the fact.
o We often disregard specifics to form generalities.
o We reduce to generalities.

How do we really learn to pay attention to our unconscious bias? Admittedly, it is not easy. I offered an example about a project but it’s even harder when we need to look at our biases about people. As an executive, I used a few structural mechanisms to help me deal with my own stereotypes and biases:

• I constructed an executive team. We met regularly. They each had responsibility for a key part of the business and therefore their outlooks were far ranging. We discussed the pros and cons of different business decisions, with each executive offering the group his or her perspective. It helped us broaden our own views.
• People with various responsibilities and viewpoints also conducted the interviewing with potential employee candidates.
• I tried very hard keep from being insular and to make sure people on my team were not insular either. We actively spent time with clients as part of our performance review goals, learning about their challenges and the role our products could play in solving those challenges.
• I adopted the mantra, “Don’t believe your own press.” While we might spin our stories to present ourselves in the best possible light, we should be aware of our flaws and weaknesses within our company, always looking for ways to do everything better.
• As an individual, keep asking yourself “Is this true? How do you know?” and be ruthless in your answers.

“People are always clinging to what they want to hear, discarding the evidence that doesn’t fit with their beliefs, giving greater weight to evidence that does.”
― Paula Stokes, The Key to Everything

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