Admit it. You’re biased.

This article is part of Making better decisions, a content series developed by The Economist Intelligence Unit, sponsored by Workday. In this series, we explore how business leaders can improve decision-making and drive success.

We like to think of ourselves as rational beings, but as cognitive psychologists Daniel Kahneman and Amos Tversky have shown, the human mind is prone to all sorts of quirks. For example, we overestimate our skills, we shape our views to agree with our friends, and we overlook evidence that suggests we might be wrong.

Employees tend to take decisions that match the views of senior executives

An unofficial list of known cognitive biases — systematic deviations from rationality in our thinking — runs to 176. Those affecting decision-making total 101.

Biases are a concern for businesses, as they can influence decision-making in all sorts of unexpected — and unwanted — ways. A survey of 300 European C-suite executives, conducted by The Economist Intelligence Unit (EIU) and sponsored by Workday, reveals the scale and impact of cognitive biases in the workplace.

For example, 83% of respondents say that employees at their organisations are vulnerable to group-think, the damaging tendency of team members to avoid disagreement. The same proportion report that employees tend to take decisions that match the views of senior executives, and three in four say they base decisions only on the information that is easily available.

Meanwhile, 78% say employees are prone to basing decisions on their personal feelings, rather than evidence. Chart 1.

Perhaps the most damaging bias exposed by the survey, however, is a lack of self-awareness. When asked whether they personally suffer from the same list of biases, respondents insist in every category that they are less bias-prone than employees in their organisation.

The power of self-awareness

Self-awareness is a key factor in removing biases.

Irene Scopelliti of Cass Business School in London is an academic working on bias mitigation. Following the weapons of mass destruction (WMD) fiasco in the Iraq war, the CIA became concerned about the impact of cognitive biases on its agents and funded Dr Scopelliti to find ways to tackle them. Based on her research, she developed a game that asks players to make decisions and then offers advice on how to think about biases. The game leads to improved decision-making in players, Dr Scopelliti showed, which is retained long after the game-playing ended.

The more people think they are less subject to bias than others, the more resistant they are to training.

One of Dr Scopelliti’s critical findings was that the ability to improve biases is linked to self-awareness. She explains: “People are subject to the ‘bias blind spot,’ which is kind of a meta-bias. It is the degree to which people think they are less biased than others.”

She says that susceptibility varies and that the severity determines the durability of other biases: “The more people think they are less subject to bias than others, the more resistant they are to training.”

The EIU survey supports this idea. Respondents who describe their organisations as market leaders are also more likely to admit they are liable to cognitive biases. Like the participants in Dr Scopelliti’s game, their self-awareness acts as a catalyst for treatment.

Indeed, these high performers are more aware of employee biases, the survey suggests: 88% of high-performers admit that employees use only easily available information, compared with 55% of laggards. And more than half believe that biases have led to bad decisions by the board; only one in ten market laggards admit that this is the case (see chart 2).

This honest assessment of biases is the foundation for better policies to counteract them.

The survey shows that the best organisations allow a variety of opinions to flourish to challenge biased decision-making: 85% of market-leading companies take decisions in an atmosphere where dissenting opinions can be heard, compared with only 36% of market laggards.

Great organisations reward good judgment. They promote staff with a track record of good decisions — more than half of outperformers do this, compared with only 12% of underperformers. And they are more than twice as likely to empower employees to make controversial decisions.

Tackling biases

Once companies admit their vulnerability, there are all sorts of exercises available to tackle biases in the workplace. Some of them are simple. Lee Newman, professor of behavioural science at the IE School of Human Sciences and Technology in Madrid, runs a course to reduce biases. To combat confirmation bias, he counsels students to “flip” their thinking. “First, I get students to argue the reverse of their preferred position. Then I get them to attack their original view.”

The exercise encourages participants to see their own views — and the perspectives of others — in a more rational light.

The practice of mindfulness, a non-religious form of meditation, can also have a beneficial effect on emotional biases, Professor Newman says. “When we are tired, or don’t like someone, it can be hard to separate emotion from logic.” Mindfulness reduces this reflexive rejection. “We think about attention in psychology like a spotlight. Mindfulness practice expands the range of attention, so it picks up more things. We are less reactive to events. It’s a great general solution.”

When we are tired, or don’t like someone, it can be hard to separate emotion from logic.

Another way to tackle bias is to pay attention to stress, as people are more likely to make intuitive and therefore bias-prone decisions when they are under stress. One way managers can do this is “to set realistic objectives so that we can manage stress at source”, says John Maule, emeritus professor in human decision-making at Leeds University Business School in the UK.

The survey shows that high-performance companies understand biases. They openly admit to their power to damage decision-making. And they take action to cure biases because they believe it works.

Companies that want to accelerate their performance need to be honest about their vulnerability to biases. Only then can they take action.

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