Biases and the Impact on Leadership

Some time ago, I shared an article from Rand Research Corp that highlighted the fact that we are living in an environment where we are seeing “Truth Decay”. We see this taking place in politics, business, families and individually but how much of it is a direct result of the close to 200 biases that each person is exposed to and has the potential of exhibiting and rationalizing.

Now, I am not going to say biases are all bad because they are not, some provide great insights for business or alerts when we are facing problems in life but when taken to extremes or they are unconsciously applied, it can become a major problem in business, schools and families.

Our brain is a marvelously adaptive mechanism that is capable of 1016 transactions per second, with 100 billion neurons that each has up to 10,000 connections with local communities. This makes it the envy of every technologist on the planet. All this power, however, doesn’t mean our brains don’t have major limitations.

Did you know psychologist have acknowledged close to 100 cognitive biases alone? These are often frustrating hiccups in our thinking that cause us to make questionable decisions and reach irrational or erroneous conclusions. I decided to take a brief look at some of these biases and I was shocked when I saw the numbers.

But first, let me define a cognitive bias. It is a deficiency or limitation in our thinking, a flaw in judgment that is generated when we have errors of memory, social attribution, or miscalculations.

Personally, I believe these biases are becoming even more prevalent and troublesome with the growth of social media. Some social psychologists feel cognitive biases help us process information more efficiently, especially in dangerous situations, and there is some well documented truth in this premise.

However, they can also lead us to make serious mistakes. The only way I know to mitigate any negative bias is to be self-aware and intentional in our actions so we can recognize when they are tripping us up. This is a must in today’s business environment. With that said, here are 10 of the most common and contentious cognitive biases that you need to aware of in environment.

1. Confirmation Bias

It is a known fact that we love to support people who agree with us. In fact, there are several leadership experts that have been quoted about being protective of our own attitudes and relationships. It starts with selective memory or recognition and can be much stronger when issues are emotional or deep seated.

 There are many coaches that teach the Principle of Reciprocity which is based on the acronym, K.L.T.R. (Know, Like, Trust, Reciprocate) and this bias is at the foundation of that principle.

This is the reason we focus on websites that echo our political opinions, and we hang around people who hold similar views and tastes. We have called them communities, tribes and ecosystems in business.

Conversely, we tend to avoid individuals, groups, and news sources that make us feel uncomfortable or insecure about our views. Behavioral psychologist B. F. Skinner called this “cognitive dissonance.

This preferential mode of behavior leads to confirmation bias, which is often an unconscious act of referencing only those perspectives that fuel our pre-existing views, while at the same time ignoring or dismissing opinions, no matter how valid, that threaten our world view. And paradoxically, the internet has only made this tendency even worse.

Keep in mind that this bias can provide us with a continuum between isolationism to loyalty that can be damaging when taken to extremes on either side of the line. Sound familiar.

If not balanced, we become so in tune with this one that we are constantly building more and more silos in all parts of life. It’s time for a re-evaluation of our attitudes, especially in business, in terms of how this bias influences our decisions. Known how this is impacting your leadership style can make the difference between success and failure.

2. Ingroup Bias

Very like the confirmation bias, the Ingroup Bias is an offshoot of our culture tribal tendencies. Much of this effect may have to do with oxytocin, which is a hormone that when released in the body helps us in human behavior and social interaction. The prime thing we know about this hormone is how it works in terms of sexual and reproduction with humans, but this secondary influence may be equally important.

This neurotransmitter, while helping us to create tighter bonds with people in our own Ingroup, translates the exact opposite function for those on the outside, it makes us suspicious, fearful, and even distrust of others.

The Ingroup bias can cause us to overestimate the abilities, qualities and value of our immediate group at the expense of people we don’t really know yet. When we begin to believe that we are the only one who has the answers in every situation we have fallen into the Ingroup bias trap.

3. Post-Purchase Rationalization

Have you ever bought something totally unnecessary, faulty, or overly expense, and then rationalized the purchase to such an extent that you convinced yourself it was a great deal all along?

Yep, this is post-purchase rationalization in action. It is kind of built-in mechanism that makes us feel better after we make poor decisions, especially at the cash register. In some instances, we become defensive of our decision to the point that we shut out all criticism or discussions of reality. This is when we need to do a personal reality check.

It is also referred to as the Buyer’s Stockholm Syndrome, and it’s a way of subconsciously justifying our purchases, especially those expensive ones. Social psychologists say it is rooted in the principle of commitment, our psychological desire to stay consistent and avoid a state of cognitive dissonance.

4. Observational Selection Bias

Generally, this is one of those biases that is triggered within in our own imagination. It simply indicates that due to some unknown force, the appearance frequency of something, like a color of a car, shirt or article has increased and we just noticed it.

A perfect example is what happens after we buy a new car in what we believe was a unique color then suddenly, we begin to see the same color, model, and year car virtually everywhere.

A similar effect happens to pregnant women who suddenly notice a lot of other pregnant women around them. Or it could be a unique number or song. It’s not that these things are appearing more frequently, it’s that we’ve (for whatever reason) selected the item in our mind, and in turn, are noticing it more often.

Trouble is, most people don’t recognize this as a selection bias, and believe these items or events are happening with increased frequency, which can be a very disconcerting feeling. It’s also a cognitive bias that contributes to the feeling that the appearance of certain things or events couldn’t possibly be a coincidence. It can provide the seed for conspiracy theories and useless worrying within a relationship or company culture if not recognized and mitigated.

5. Status-Quo Bias

As humans, most of us hate change and this often leads us to make choices that guarantee that things remain the same, or change as little as possible. This has ramifications in everything from politics to economics. Within businesses it can be deadly.

We prefer to hold onto our routines, political parties, and our favorite meals at restaurants, just to name a few. Part of the drive of this bias is the unwarranted assumption that another choice will be inferior or make things worse.

The status-quo bias can be summarized in this very familiar phrase: “If it ain’t broke, don’t fix it”. It generally fuels our conservative tendencies.

And in fact, this is the same reason Congress continues to struggle with a reliable and affordable health care plan. We fought Obamacare and now we are fighting Trumpcare, even though most individuals still support some idea of reform.

6. Negativity Bias

Have you ever noticed that we, as a group, generally pay more attention to bad news than good news and it’s not because we’re morbid? Some social scientists speculate that it’s due to our selective attention and that, given the choice, we perceive negative news as being more important or more profound than good news.

We also tend to give more credibility to bad news, perhaps because we’re suspicious of positive stories for some reason. Just look at how rapidly we will jump on a false or negative news story versus a feel good one.

The cost impact of negative stories coming true may feed our desire to avoid spending for mitigation versus the potential pay back of a positive story coming true.

Concentration on negative environments, processes or relationships is caustic and can lead to erosion of trust, integrity or collaboration so it is one we must always be vigilant in guarding against.

7. Bandwagon Effect/Bias

The Bandwagon Effect is often the result of the extreme cases of the Confirmation or Ingroup biases. Subconsciously we fall into this habit, we love to go with the flow of the crowd.

When the groups begin to align on a winner or a favorite, that’s when our individualized brains start to shut down and enter a kind of “groupthink” or bee hive mentality. It doesn’t have to be a large group or the fickle whims of an entire nation; it can even be triggered within small social groups, like a family or even a small group of co-workers.

The bandwagon effect often causes errant or distorted behaviors, social norms, and memes to arise and go viral among groups of individuals, regardless of the evidence or motives in support.

Therefore, polling is often maligned, as it’s possible to steer the perspectives of individuals with the context or wording of a question. The root of this bias must do with our ingrained desire to fit in, look for acceptance and conform, as demonstrated by the many studies that have been done on conformity.

8. Projection Bias

Getting out of our comfort zones is easy to say, but usually very difficult to accomplish. We perceive that we are trapped inside our own minds 24/7, so we feel it’s difficult for us to project outside the boundaries of our own consciousness and preferences.

We generally assume that most people think just like us, even though there may be no justification for that assumption. This cognitive bias can often lead to a related effect known as the “False Consensus Bias” where we tend to believe that people not only think like us, but that they also agree with us.

This is a bias where we often overestimate how typical and normal we are, and assume that there is a consensus on issues, expectations or processes when there may be none.

It can also create the effect where members of a radical or fringe group advocate large numbers of other people on the outside agree with them than is really the case. It can also be brought on the “Fake it, until you make it” mentality or an exaggerated confidence one emotes when predicting the winner of a favored election or sports match.

9. The Current Moment Bias

We humans have a really hard time imagining ourselves in the future and altering our behaviors and expectations accordingly. Many of us would rather experience pleasure now, while avoiding or delaying any pain for later.

This is a bias that is of concern to economists (i.e. our conscious willingness to overspend and not save money) and health practitioners. For example, studies have shown that when we proactively plan meals, for example, we are apt to think healthy, however on the spur of the moment we have a propensity to go for a comfort item such as chocolate.

10. Anchoring Effect

This occurs when we compare only a finite set of elements. It’s called the anchoring effect because we tend to fixate on one value or number which in turn becomes the bench mark for everything else. There is no big picture view of the value of a product or service.

This effect can also explain why we often wind up dealing with relativism in the work environment. If we don’t have a big picture point of view on a role, company or service we will only look at it in relation to personal experience or benefit to determine value, hence what is of high value to one person may be of little value to another.

For example, as a consumer, when an item is on sale at a store; we tend to see the difference in price, but not the overall, comprehensive value of the item itself. Perceived value can become distorted in either way depending on how it is presented, the mood we are in or the competitive environment. This is also why we tend, when given a choice, we often pick the middle option, not too expensive, and not too cheap.

If a personal or corporate anchor point is distorted, uncompromising or unhealthy it can have an impact on everything from employee engagement to supplier relationships so being aware of this can make a big difference in vision and mission alignment.

Now I know this article is longer than most but thanks for reading. If I can be of any help in trying to sort out the positives and negatives of biases, please give me a call at 630–454–4821 or visit my website at https://tlgcoach.com.