Gain an Edge by Minimizing Bias

How Cognitive Bias Can Make or Break
Effective Decision Making

By Zoë Friedman

If you’ve ever broken your prescription eyeglasses, you know how difficult it can be to navigate when driving. Maybe you veered east on the highway when you should have gone west because you couldn’t read the overhead sign. Your perceptions of your surroundings may be blurred or skewed and lead you off course. Once you repair your glasses, however, you can once again navigate the roads and reach your destination.

Think of cognitive bias like a pair of broken glasses. While a pair of new, unbroken glasses make things appear as they actually are, broken glasses paint an inaccurate picture of the world. Similarly, cognitive biases affect the way we experience and respond to our surroundings, skewing the accuracy and rationality of our decisions. They are subconscious errors in thinking, based on our experiences and perspective, that lead us to misinterpret information [1].


In professional settings, biases are especially problematic. Why? Because they distort every aspect of the decision-making process. Biases interfere with our rational thinking, leading us to rely more on instinct, past experiences, benchmarking, and stereotyping, as opposed to data and facts. In most cases, we are not even aware of our biases, leading us to misinterpret our instincts as facts. By allowing biases to interfere with decision making, we do not account for potential risks and superior alternatives.

Cognitive biases are not just theoretically harmful to an organization’s bottom line—their presence can result in significant losses. Gallup[2] estimates that employees who make decisions based on biases (rather than data) are 20% more likely to feel disengaged at work, costing U.S. businesses over $500 billion annually.

Fortunately, you can limit decision-making bias within your organization and increase the effectiveness of decisions by taking the following steps:

Step 1: Identify Bias

Prior to making a big decision, help your team (or client) identify their biases by encouraging them to explain their reasoning instead of merely stating an opinion. Questions such as, “why do you think that?” and “what led you to this conclusion?” can reveal how one’s personal interaction with the world influences perspectives and opinions, giving way to bias. Acknowledging that biases exist is the first step to minimizing the biases’ impact.

Step 2: Untangle Bias

Once your team recognizes that everyone experiences biases, help untangle these biases by understanding each bias’ level of influence. For this exercise, ask team members to rank the magnitude of their biases in specific situations. A ranking of “1” indicates minimal bias, while a ranking of “10” indicates a high level of bias. As a team, discuss: which situations accounted for the highest and lowest levels of bias? This exercise is meant to raise team members’ awareness of the least objective opinions to balance them with more impartial views during group discussion. Helping team members understand their own levels of bias encourages them to proactively “tame” the bias (see step 3).

Step 3: Tame Bias

In this step, you will facilitate team discussions that tame bias. To do so, play the “Devil’s advocate” to a colleague’s opinion to help stimulate critical thinking and innovation. By questioning others’ ideas, you highlight risks to lessen optimism, which allows you to form a more realistic assessment of potential outcomes. Once risks are apparent, you can prepare alternative plans and propose new ideas. This allows you to make a more rational decision that accounts for your business’ changing landscape.  After walking your team through these steps, you will be able to guide them in developing a well-informed strategy with minimal bias.

In the current climate, organizations that fail to untangle and tame their biases will quickly be hindered by poor decision making. However, accurate decisions translate to strengthened organizational functioning, increased effectiveness, and maximized profitability. By taking the above steps, your organization can minimize bias and gain a strategic advantage over competitors.

It can be difficult for teams to tame biases themselves because biases are often implicit. Therefore, an effective organization will typically engage an impartial and objective third party to help facilitate robust discussions, encourage dissenting opinions, collect relevant data, and incorporate a diverse variety of resources, stakeholders, and experts. Rockwood can help your company minimize bias and build a strong foundation for enhanced outcomes. To edge your organization forward and enhance sound decision making, reach out to us at info@rockwoodcompany.com for more information.

For more resources and information on cognitive biases, see the following articles from Harvard Business Review:

[1] Ruhl , C. (2021, May 04). Cognitive bias examples. Simply Psychology. https://www.simplypsychology.org/cognitive-bias.html

[2] Learning, Team True Office. The Cost of Unconscious Bias in the Workplace. https://www.trueofficelearning.com/blog/unconscious-bias-in-the-workplace-what-it-costs-your-bottom-line. Accessed 20 July 2021.

 
Organization DevelopmentRockwood CompanyCognitive Bias, Decision-makingComment