• unconcious bias

Navigating bias – 6 steps for making smarter business decisions

By | 2017-01-13T13:41:53+00:00 February 13th, 2015|Categories: Respectful Workplace|Tags: |Comments Off on Navigating bias – 6 steps for making smarter business decisions

Why are humans biased?

Every decision that we make and every interaction we are a part of are influenced by factors both within and outside of our scope of awareness. In the blink of an eye, we quickly size up the current situation or person, select the most important factors to consider, scan our memories for pre-existing data points and then develop a plan of action. It all sounds well and good until you consider the limitations that our brains have to contend with in this process.

One such limitation is bandwidth. Since our brains are very limited as to how much data they can take in and process simultaneously, we take shortcuts. In particular, we give greater weight to certain types of new information over others. We also make assumptions about what will happen in the future based upon what we think happened in the past. We take these shortcuts both to protect ourselves and to save time and energy in the decision making process.

Besides the bandwidth problem is the limited accuracy of our past reference points. Each of us stores our own version of “truth” in our minds. This story of right and wrong, of past events and their presumed causes and effects (and their emotional impact on us), becomes the gold standard by which we anticipate how current events will unfold and affect us in the future. Helpful sometimes and burdensome in others, this is the realm of unconscious bias. As I wrote about in an earlier post, the consequences of this phenomenon can be catastrophic on business results.

People vs. tactical biases

Generally speaking, there are two categories of biases that affect how we make decisions: people biases and tactical biases. People biases are those most likely to be discussed in diversity and inclusion discussions. They include individual (and sometimes group) preferences that we demonstrate for others based upon race, gender, age, political affiliation, religion, physical attractiveness, sexual orientation, etc. Most researchers believe that people-oriented biases are very difficult to change and, in fact, become part of the very fabric that makes up our personality (this premise will be explored in a later post).

Tactical biases, in contrast, are preferences that show up in how we make both day-to-day and long-term decisions. Which product should I purchase? Which training curriculum is our best option? Should we partner with Company ABC or Company XYZ? Should we spend more resources on direct sales or marketing? When should we launch our new online retail site? All told, there are over 20 different types of tactical bias that can influence our decisions. Some of the more common strains include confirmation bias, loss aversion bias, sunk cost bias and temporal discounting.

Here’s the thing. Not all biases are bad. In fact, if they are consciously selected and fostered (such as what we look for in new employees), some may actually be advantageous. Successful companies such as Southwest Airlines, DuPont and The Hard Rock Café go so far as to institutionalize some of their biases in their mission and value statements. This kind of intentional bias nurturing can be great for business results if it supports the broader business strategy.

“Let us be a little humble; let us think that the truth may not perhaps be entirely with us.”

– Jawaharlal Nehru

What we’re after are the biases that unconsciously affect how we behave and decide what to do. If we can identify and minimize the factors that may lead us to make faulty assumptions and reach inaccurate conclusions, we can significantly improve the quality of both individual and group decisions. To that end, consider the following suggestions:

  1. Pause and be mindful.

    Try to recognize when decisions are being made on “auto-pilot.” It’s been estimated that as much as 50% of our day-to-day actions and decisions take place with minimal conscious thought. In short, slow down!

  2. Create as many alternatives as possible.

    While we want the final list of choices to be manageable, create a larger list to start with. Many great alternatives do not present themselves immediately.

  3. Make it safe for people to share different perspectives and dissenting opinions.

    In fact, go out of your way to invite voices that are not normally given as much consideration on key decisions.

  4. Identify decisions that may be overly influenced by emotion.

    Strong emotions, especially those that are fear-based, can and usually do make it difficult to tap into the objectivity required to make sound, strategic decisions.

  5. Attempt to “create space” to minimize the impact of emotions.

    When strong emotions are present, use time and the voice of other people not as invested to minimize their obscuring influence.

  6. Be prepared to change course if new information suggests that a different path will lead to better results.

    People are often more rationalizing than rational, and there is nothing more dangerous than doubling down on a bad decision. Check egos at the door and seek out new information with diligence and an open mind.

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About the Author:

Paul Meshanko
Paul Meshanko is an author, speaker and business leader with over 20 years of experience in corporate training and culture change. As a presenter, he has captivated over a quarter million leaders and business professionals on five continents. His company, Legacy Business Cultures, is a global provider of organizational survey and training services. Paul holds a BSBA from The Ohio State University and an MBA from Baldwin Wallace College.