27 May TSLH #021: 7 Cognitive Biases To Avoid For Better Leadership
Read time: 7 minutes
The Challenger space shuttle accident on January 28, 1986, that killed 7 Astronauts was caused by the failure of one O-ring joint to seal properly during the take-off phase. The Presidential Commission that investigated the accident soon discovered though that the problem with the O-ring had been known for a long time at NASA and Morton-Thiokol, the manufacturer of the joints. In fact, managers and engineers at both organizations had all the data they needed to see that the launch of Challenger would very likely lead to a disaster. However, nobody took the decision that was the most reasonable: cancel the launch. How come did NASA and Morton-Thiokol let the space shuttle take off on that fateful day then?
The answer is, simply put, management cognitive biases.
In the case of Challenger, the investigation found that at all levels of leadership both at NASA and Morton-Thiokol, leaders had made bad decision after bad decision because of 2 cognitive biases:
- Groupthink
- Disjunctive bias
Biases are very dangerous when you are a leader. At its extremes, it can kill, like in the case of Challenger.
Fortunately, most biases don’t result in people being killed. However, all biases will end up in serious business mistakes or failures at one point or another. Leaders therefore must be able to recognize these biases in them or their teams before they impact performance.
In my career, I have witnessed many cases where biases impacted decision-making and leadership performance. Here are the 7 most common I have seen and how I suggest to counter them.
Confirmation bias. The confirmation bias is in my experience one of the most encountered in a leadership role. Confirmation bias occurs when as a leader, you want to prove your point or assumption and in doing so, you have the tendency to only look into data that confirms that your point is the correct one and you discard any information that disproves your point.
One example where I fell for that bias early in my career was a discussion about a client contract. While working on the financial structure of the deal, I had made up my mind on what the correct path for the discussion with the client was. But the division GM had a completely different opinion. I however stuck to my initial thinking, only focusing on the information that proved me right, and discarding every alternative offered by the GM. As a result, we got stuck in the process. When I later talked to my manager about this challenge, he asked me to change my perspective and think like if I were the GM and what I would do then (excellent coaching question by the way!) I then saw how I could also benefit from thinking about the situation while wearing a GM hat.
How to counter confirmation bias: Look for ways to challenge what you think is the only truth. Seek out information from a range of sources and discuss your thoughts with a diverse group of people. Remove your function hat (e.g., forget you’re Finance) and put on another function hat (e.g., pretend you’re Sales). For major decisions, consider assigning someone on your team to play devil’s advocate. Use your mentors in the company to test assumptions. Don’t shy away from asking help, people will feel valued when you ask them “I need to decide on this, if you were me, how would you approach that?”
Hindsight bias. We’ve all pretty much encountered that one. When is the last time you heard yourself or someone else say “I knew it!” When you hear this, you can be almost certain you have a case of hindsight bias.
Hindsight bias occurs when people perceive past events as having been more predictable than they really were. In the workplace, this bias is a bad place to be for a leader. It could lead a leader for instance to criticize a person’s actions or decisions from the vantage point of the present, when all information is now available to the leader. Once you have all the information, it is very easy indeed to see how events unfolded and what makes a decision a good or a bad one. But at the time the decision was made, that information simply did not exist.
This bias is a very powerful disruptor of efficient leadership. For instance, if one of your predictions ends up being realized, you may think that because you got it right once, you will always get it right in the future. It may lead you to overconfidence.
How to counter hindsight bias: You need to remind yourself constantly that you just can’t predict the future. Make sure you ask feedback about facts before making a decision. And also be honest with yourself and with others what facts you knew at the time you made the decision. Rationalize what was discussed then.
Similarity bias. The similarity bias often occurs in recruiting situations. As a leader of a team, when you interview someone, you may have a tendency to search for common interests and talents in applicants. In doing so, you will be unable to separate friend from employee. This results in hiring the same type of profile again and again on your team.
Personally, I see myself falling for that bias when I interview someone and I start thinking “yes, she is right, I would have done the same thing” or “I love that person, she works like me”. This is where your bias detector should go to red and warn you that you are about to make a bad decision. Instead, you should focus on what value the new hire will bring to you and your team.
Another instance: I am a very analytical person and I believe I have little creative mind. For that reason, I like being surrounded by people like me. If I allow that to happen on my team though, results can be disastrous, because I will have a team of analytical people, unable to be creative when we need an innovative solution or process to be implemented. During the interview process, I therefore make sure that the person I interview (1) can fit into the company’s culture and values, and (2) most importantly adds value to the team by bringing a new competency.
How to counter similarity bias: Make sure you prepare before starting the recruiting process, by identifying what key skill you need in your team and that the new hire must have. Be aware that you will have the tendency to prefer people who look like you. The pre-screening of resumes and applicants can be the best time in the process to activate your bias detector and start not selecting only candidates who look like you. Finally, use a consistent interview process, one where you evaluate each candidate on exactly the same criteria, and do not compromise on this. Then you have the best chances to avoid the similarity bias in your next recruitment.
Conservatism bias. Raise your hand if you have heard “We have always done it this way!” or “This is the process” in the past 2 weeks! I have; no later than this week.
The conservatism bias occurs when we favor existing information and conditions over new information that could threaten the status quo and force us to change. This is a very powerful roadblock in a team or organization when you are trying to drive change. Even when you have compelling reasons for the change (implementing a better tool, improving a process, modifying the way the team works), people will tend to cling to old patterns, stick to current state. It’s not that people are stubborn. It is more that they don’t recognize the importance of the new information, of the change.
For instance, in one of the organizations I have worked with, people preferred sticking to Excel files and fixing bad processes continuously by finding workarounds, rather than starting from scratch and rethinking all processes, although there was ample information that this was the best way forward.
How to counter conservatism bias: Build a burning platform – people have to believe there is a fire that will engulf everything if there is no change. Engage people in discussions and in brainstorming ideas: Let people vent about what is wrong with the current state, let them express their ideas. Once they have done that, they will feel much more inclined to follow the change. Be aware that this is a slow and hard-won battle.
Fundamental attribution error bias. Every good leader likes to hold people accountable for their actions. One possible issue with that is that you may tend to attribute a person’s actions to their personality while attributing yours to external factors. In a nutshell, if Joe arrive late at work, you may think it’s because he’s lazy. If you arrive late at work though, it’s because there was a subway strike and you could not find a taxi to be on time.
This cognitive bias often happens because as a leader, you may only know the bare minimum about the people on your team. As a result, you cannot appreciate the circumstances that may make them late to work, or not motivated for a particular activity. And in the absence of other information, you will just – unconsciously – make your mind that the “problem” has to do with the person’s personality.
How to counter fundamental attribution error bias: One of the key things to do to avoid that bias is to learn to know your people better. Take advantage of your 1-1’s with them to learn about who they are, what they like, what they aspire to, what makes them tick at work, what energizes them vs. demotivates them. Awareness and empathy are also strong tools to use here. Practicing empathy, in particular, having discussions with people on your team about their opinions on projects and life out of the office, is a strong step towards developing a more inner knowledge of the people and be less prone to judge them just on what you perceive as their personality.
Groupthink bias. Let’s go back to our Challenger explosion example. One of the most horrifying findings of the investigation is that engineers both at Morton-Thiokol and NASA had all the information they needed to see that the Challenger launch would result in a disaster. So, although engineers at Morton-Thiokol recognized a major risk for the launch of January 86, they however agreed to the launch because they thought everybody agreed to it. In short, there was an illusion of unanimity.
Groupthink bias is when the desire for harmony or conformity in the group or the team results in an irrational or dysfunctional decision-making outcome. This is any leader’s top exposure with their leadership team: The team is trying to please the leader to avoid conflict, to promote an artificial harmony in the team. Nobody will call out the leader wrong on anything he does or says.
A striking example of where groupthink bias happened recently is Vishal Garg (Better.com’s CEO) and his decision to make a Zoom call with 900 of his employees to tell them they’re laid off. Where was his leadership team here to tell him this was the wrong step to take? Nobody on the leadership team spoke out because of the groupthink bias: Everybody thought that everyone else agreed.
How to counter groupthink bias: The best approach to avoid groupthink bias and to counter the desire of the group to be cohesive and agree at all costs is to create diversity in the group. That means, if you are the leader of a team, you should ensure that your team is as diverse as possible – background, culture, mixing men and women, etc. Anything that can increase diversity on your team will work towards mitigating your exposure to groupthink bias.
Base rate fallacy bias. Another easy trap for leaders is the base rate fallacy bias. This occurs when you assign greater value to specific information about a situation or person and ignore or undermine the base rate information for that same situation or person.
Daniel Kahneman and Amos Tversky once ran an experiment where participants were presented with the personality description of a fictional graduate student they called Tom W. For instance, they wrote that Tom is viewed as hardworking and nerdy – a stereotype of computer science students. Then, the participants were given a list of 9 graduate fields of study and told to rank them in order of likelihood that that is the field that Tom W. is pursuing. At the time of the studies, there were far more students enrolled in humanities and education than computer science.
Despite having the base rate information – there are far more students enrolled in education or humanities than in computer science – 95% of the participants said that Tom W. was enrolled in computer science. That means that the participants’ predictions were based solely on the personality description of the student (the individual information) with total disregard for the base rate information.
How to counter base rate fallacy bias: Leaders need to pay more attention to the base rate information available to them. They need to recognize that personality and past behaviors are not as reliable predictors of future behavior as they think they are. This requires leaders to be more effortful when assessing the probability that a given event will occur.
In truth, there are hundreds of cognitive biases. Our brain remains our worst enemy if we don’t practice self-awareness and learn about the different biases and how to counter them. This is my inquiry for you this week to reflect upon: Think about a recent situation where it is now clear that you fell prey to one of the cognitive biases I described above. Ask yourself these questions:
- What has happened and what was the result of the situation for you as you fell to the bias?
- What is something you could have done to reach a different result?
- What are you learning about this situation?
I wish you a great read. I’ll see you next Saturday!
TL; DR (Too Long, Did not Read)
7 cognitive biases to avoid for better leadership
- Confirmation bias.
- Hindsight bias.
- Similarity bias.
- Conservatism bias.
- Fundamental Attribution Error bias.
- Groupthink bias.
- Rate Base Fallacy bias.
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