“Experience seems like a reliable guide, yet sometimes it fools us instead of making us wiser” – Soyer and Hogarth.
We have always been taught to learn from our experiences, but what about bias that influences how we make our decisions in the first place? Although we might not realise it, in our working environment there are four main biases at play – outcome, availability, confirmation and hindsight bias. We can learn to recognise each bias and put steps in place to counteract our natural tendencies to distort information to suit ourselves.
1. Outcome bias
If we get a successful result, we consider the whole process to be successful. But beware, a good outcome can lead us to stick with a questionable strategy, and a bad outcome can cause us to change or discard a strategy that may still be worthwhile, say Soyer and Hogarth.
One study entitled “Sticking With What (Barely) Worked” shows that NBA coaches are more likely to revise their strategy after a loss (or even narrow losses which are uninformative about team effectiveness) instead of a win.
How often do we look back at the conditions that existed at the time of the decision? How often do we consider the role that luck played in our success? Almost never I would imagine, and as a result, the processes behind success or failure are left in the dark. But while we can control processes, we are frequently overconfident in our abilities to control success.
The next time your team completes a project, regardless of the outcome, identify what could be done better and look closely at the underlying processes. As you become more aware of outcome bias, you will be able to identify processes that are working well, and processes that rely on luck.
2. Availability bias
How well can we trust the information coming from those around us? Lynn R. Offerman, a consultant and executive coach, advises leaders that they can get into trouble when they are surrounded by followers who fool them with flattery and isolate them from uncomfortable realities. Instead, they need to hear both the hard questions and the bad news, as this is essential for the health and wellbeing of the organisation.
But people like to be liked, and there are benefits to being liked by the boss. And it’s easier to conform with the majority rather than disagree. But if all your advisers follow that approach, how will your team creatively solve problems?
To see if you are surrounded by flattery, Offerman recommends one simple test: at your next staff meeting, count how many employees challenge you. If no one challenges you, consider the reasons why this could be. Does your team know how to engage in positive conflict? Is it a safe environment to ask hard questions? The more you tease out availability bias, the more well informed your decisions will be.
3. Confirmation bias
When we look for information that will confirm our beliefs, and then disregard or undervalue information anything that might contradict our beliefs, we suffer from confirmation bias. We might not realise that we are doing it, but we put on blinkers and turn down any noise that might dare undermine the validity of our beliefs.
Some people may say that data can solve this bias, but data can be manipulated into anything that we want. As Soyer and Hogarth say, “Once misleading insights are data approved, they are even harder to challenge.” A possible solution they advise, is to ask data analysts general questions and not to ask leading questions or reveal your hopes and dreams to them. Another solution is to actively seek out evidence and information that would disprove your beliefs.
4. Hindsight bias
“I knew it all along” or “I could see the writing on the wall”. How often do we hear this coming from our colleagues after failure occurs? Science tells us that when we look back at the past, our brain turns the past from being something slightly blurry into something more solid. We take those things that we remember well, piece them together and weave a story that makes sense to us. A story in which everything was obvious and in which we were always right.
The unfortunate outcome of this is that we tend to simplify everything that happened in the past, and we place blame on specific people because the causes should have been obvious, right? We tend to forget that most business decisions are urgent, complex and ambiguous and that there is a fine line between success and failure.
If we allow ourselves to suffer from hindsight bias, the first step to counteract this is to acknowledge that we cannot predict the future, no matter how hard we try. If someone says, “I knew it all along,” create a positive discussion around all of the signals that were pointing to a failure, and how best to prevent that from happening the next time.
Very often we have to make decisions in the heat of the moment, and we are completely unaware of all the biases that are running in the background of our minds. But if we can create a culture where all evidence is sought out to show the pros and cons and where innovation and trying out new things is the norm, then this will go a long way towards keeping biases at bay in decision making.