Humans are predictable: The role that cognitive biases play in organisational transformation

This article was inspired by Buster Benson’s Cognitive Bias Cheat Sheet, and looks at the subject through the lens of organisational transformations. If you are inspired or have a different perspective, I would love to hear from you, be brave and add a comment below.

Transformational change is hard

Have you been wondering why transformational change feels so hard?

Do you feel that that you are spinning your wheels and that however creative or engaging your approach is the people you are trying to change don’t seem to ‘get it’?

Or does it feel like an uphill struggle and that there are mythical forces at work stopping the adoption of your transformation and there is no clear path to why or what you can do differently? This might be the answer for you.

Humans are predictable

Humans are surprisingly predictable and by understanding how we are predictable, you can predict the choices that we are likely to make. No surprises. This predictability puts you back in control.

We look at four subjects to give you the understanding and insight to work smarter, not harder as a leader or agent of change.

1. Why we are predictable, understanding this helps a lot
2. The four mega problems our brains are trying to solve, to regonise the biases we have
3. The biases that affect organisational change, to see how they affect your change
4. How to measure and get actionable insights on these biases, what tactics might work

The Theory

This is one of the most powerful theories we use.

We like to think that we are unique and special, we have a set of experiences which are exclusive to us. Yet we are very predictable in the choices we make.

Even when we are irrational, we are predictably irrational. Irrespective of our experiences and unique histories our brains respond to triggers in a predictable way.

Predicting how we, as humans will react and the choices we are most likely to make allows us to work smarter, not harder.

Thinking fast and slow

Firstly, let us understand how our brains make choices.

Our brain has two modes known as System 1 (Fast) and System 2 (Slow). System 1 is our automatic reaction, often thought of as gut feel and System 2 where our ‘thinking’ brain needs to engage in more complex tasks.

If you have ever left the house wondering if you locked the door or arrived at your destination but cannot remember the journey, this System 1 in operation.

There were no surprises along the way, your System 1 brain coped on its own and did not need to call a friend, your System 2 brain for help. Decisions made in the moment through gut feel are our System 1 brains acting confidently based on their experience.

When unexpected things happen, or where our System 1 does not have a (recent) mental model to deal with the situation, System 2 steps in. Whether that is missing our bus, making a big and complex decision or dealing with a surprise or crisis.

If we have experiences which are similar our System 2 brain digs them out, helps rebuild our mental models and System 1 can get back to work. Rebuilding mental models takes time and effort.

Ironically, when we are under stress we are less likely to engage reasoning and more likely to jump to a gut-feel System 1 decision even for big decisions to protect ourselves.

Change Tactics

• Changes which require large scale System 2 thinking, or where your target group are under stress are less likely to be adopted.
• Previous experiences can help transition to new ways of working or behaviours.

Predictably irrational

Our brains can’t cope!

Information is coming at us from every angle, the pace of technology and our ability to adapt to the changes around us puts pressure on our brains. Our System 2 brains struggle to cope and look for shortcuts to rationalise the world around us.

These shortcuts are known as ‘cognitive biases’.

The surprising thing is that our brains each take the same shortcuts. They make complete sense to us but seem irrational to others. We are consistently and predictably irrational.

Over 190 biases have been identified where our brains make predictable choices, even if they seem irrational to a rational observer. These biases do not operate in isolation, they often work together.

Four Mega Problems

Our brains have developed these biases to deal with four mega problems that they have to deal with [Credit: Buster Benson’s Cognitive Bias Cheat Sheet]:

1. Too much information: There is too much information around, and our brains need to filter and select. We use some simple tricks to work out what is useful and what is not; recency, unusual or surprising, things that have changed, or things that confirm our own beliefs.
2. Not enough meaning: The world is confusing, to make sense we connect the dots, filling the gaps with things we know, or are in the mental models we have in our heads. We look for patterns, stereotypes and at our history. We simplify numbers and are biased towards things we know. We project our own mindset and assumptions onto others.
3. Need to act fast: We know that we are constrained by time and information, we cannot know everything before we need to act. We make assumptions based on our confidence and what is current. We risk mitigate maintaining the status quo or being part of a group and we keep going with what we have invested time and energy in.
4. What we should remember: Our brains can’t hold everything. We selectively choose what to retain; generalisations over specifics and the standout details. We edit and reinforce memories after the fact to make them easier to remember.

But I hear you say, “I am different. I am a rational being, I don’t fall for these short cuts”. Yet we all do, repeatedly. We are not immune to our brains trying to make sense of our complex world. There is even a bias for this; the ‘illusion of transparency’ where we consistently overestimate our ability to know ourselves and others.

Biases in transformational change

If we look at the biases through a transformational change lens, four themes predict behaviour.

The themes can be plotted on two axis; Those that are related to individuals vs others and whether they are most likely to be barriers or enablers to change.

• Inertia: Humans hate change
• Ego: We are overconfident
• Data: Our data is poor
• Social: Social status is important

The impact of the themes leads to working smarter as we design our change approach and strategies.

What about my transformation?

Read the following statements, which do you DISAGREE with?

A target is the person who needs to change behaviour for this transformation to be successful. It could be you as the leader, or your team.

1. In the past similar changes have been successfully implemented [C]
2. This change is simple, easy to adopt [A]
3. The social bonding in target groups is weak [D]
4. The stress levels are low in the target groups [A]
5. Targets have recently navigated similar changes successfully [B]
6. The influencers and leaders of the change (yes, you!) are seen as credible by their target groups [D]
7. Leaders and influencers are prepared to speak up within their group if they believe in something, even if unpopular [D]
8. The leaders and influencers of the target groups believe there is a need for change [C]
9. The influencers and/or targets have been involved in the design of the change [B]
10. There is plenty of time for targets to rebuild their mental models [A]
11. Targets will be able to exercise choices as part of this change [B]
12. The targets believe there is a need for change [C]
13. The targets will need to stop doing some things for this change to be successful [A]
14. The majority of a targets routines and choices will stay the same [A]

Results

Total the number of each letter [A,B,C,D]

• If your highest total are A’s, then INERTIA is your biggest challenge
• If your highest total are B’s, then EGO is your biggest challenge
• If your highest total are C’s, then DATA is your biggest challenge
• If your highest total are D’s, then SOCIAL is your biggest challenge

Read on for the tactics to overcome your challenges.

Humans are predictable risk assessment

For a more detailed assessment use our risk assessment in two formats a PDF: Humans are Predictable for Printing or Workshops and our new Editable Excel: Humans are Predictable

The assessment can be used standalone, as a checklist, or with your team to assess the scale of your risk. Use from the earliest point of design throughout the transformation to assess whether your interventions are working.

Health warning: Always complete individually to avoid groupthink and make it anonymous to ensure that you get the most honest answers. It is good practice to give feedback to whoever completes for you.

The Tactics

Knowing is one thing, doing is another. Use these tactics to mitigate your risks.

Inertia: Humans hate change

Humans hate change. We really do. We like the status quo. It is easier for our brains to handle. When things get tough or we feel stressed we stick to what we know.

We are biased towards inertia, motivated to do nothing, to maintain our current or previous decisions.

Complex decisions made under stress often lead to a return to the status quo, even if the alternatives were much better.

In countries where organ donorship is optional it is tough to achieve more than 10–15% opt in. Where opt-out is used, the figure is more like 90–95%. A product of our brain choosing to take the default option as the easiest one.

We like to feel in control, that we have choices. Children are more likely to eat vegetables if they have a sense of choice; ‘eat your broccoli or your carrots’ rather than ‘eat your vegetables’.

We place a disproportionate emphasis on things we own already, or we have worked to create. We do not like to lose what we perceive we already have. Companies selling sofas and mattresses with a 90-day trial period know that you are less likely to return it once you have a sense of ownership and it is easier to keep than return. Projects started, where you know deep down that you should give up and start over, keep on going.

We do not like thing that are ‘not invented here’. Ideas suggested by other groups are immediately seen with suspicion.

Transformation Tactics

• Give targets a sense of choice or feeling of control
• Where possible include influencers or targets in the design phase. Reduce the sense of ‘not invented here’
• Assess the credibility of the designers with the target population
• Give targets the time to re-build the mental models in their heads
• Recognise and respect the loss
• Pace the rate of change to allow adoption

Biases: Status Quo, Endowment, Ikea, Not Invented Here, Loss Aversion

Ego: We are overconfident

We are over-confident in our past performance and how we see the world. We are motivated to present ourselves in a good light, socially and professionally.

We often have a higher opinion of ourselves and our standing in a group than the reality. We rate our ability to take on hard tasks, where failure is likely, higher than the reality and we are more likely to take risks believing that we will be impacted less than others.

Having made a choice we persuade ourselves that having chosen the option, it must have been the better option, reducing regret. Referendums which cause the voter population to make a binary choice move many voters from a mostly neutral stance to a harder position as their brains reinforce that they made the better choice. A move that can split the group in two.

Hindsight is a wonderful thing, we routinely believe that we would have predicted an outcome with a high degree of confidence, especially if it was negative. We project these predictions confidently onto future outcomes.

Transformation Tactics

• Use confidence in the past to create recency and to give future confidence
• Remind targets of their past or similar successes to reduce perception of impact
• Do not ask targets to make a choice if binary choices risks reinforcement of a poor position
• Give targets the perception of choice, even when they are assigned
• Assess the outcome expectations that targets have, is a reset needed?

Biases: Ego Centric, Over Confidence, Optimism, Choice, Hindsight

Data: Our data is poor

We are biased in how we look at information. We remember things at the beginning and end more than those in the middle. Recent memories are rated higher than those in the distant past. We value things which happen sooner rather than those further into the future.

We select information that confirms our beliefs discounting that which contradicts. It is easier to reinforce our beliefs than it is to disrupt them with new data and rebuild the mental models in our heads.

When two parties strongly disagree given the same information, there is a good chance that they have each selected the elements that match their beliefs, discounting the rest.

We remember and recall negative events more easily than those that were positive, putting more weight on the negative. Organisations with a pattern of failing projects is likely to have a perception that they are not good at this.

Transformation Tactics

• If there is history of past failures, there will be a greater expectation of future failures. Make your transformation look and feel different to reduce association
• First and ending impressions count. Invest in getting them right
• Use facts to disrupt targets perceptions and create the need for change
• Use reality testing to measure whether your data has been discounted or not
• Offer small, accessible rewards sooner, rather than a bigger reward at the end

Biases: Confirmation, Hyperbolic Discount, Recency, Negativity

Social: Social status is important

We try and fit into our social groups, we adapt our choices and behaviours to remain socially acceptable within the group.

We will look to others if we are unsure and assume that members of the group have more information or experience than we do. We don’t want to stand out and often give the socially correct answer.

We work to minimise conflict within the group, aiming for consensus, actively discounting alternate viewpoints and isolating the group from outside influences. We avoid difficult conversations within the group often focusing on the trivial instead.

Transformation Tactics

• Identify the influencers in a group and their position. Focus your change efforts here
• Watch for softening changes to make them feel more acceptable to a group. Use your credible leaders to prime the socially acceptable outcome; what pleases them
• Use relevant social proof as a persuader. (Watch out for ‘not invented here’)
• Assess the congruence between what a group member is saying and what they really believe. Use anonymous collection methods wherever possible
• Recognise that a focus on the trivial suggest that the group find the main subject too complex or challenging. Chunk into manageable pieces

Biases: Social Norms, Courtesy, Group Think, Triviality, Social proof

Key Takeaways

1. Humans are predictable, predictably irrational
2. Taking cognitive biases into account when designing a transformational change increases chances of success

For more reading

Signup to The Change Wizard for early access to our thinking and our tools

Nobel prize winning author Daniel Kahneman presents his research in more detail in his award-winning book Thinking Fast and Slow

Dan Airely brings these biases to life in his bestselling book Predictably Irrational, with compelling examples

Nobel prize winning author Richard Thaler draws on decades of behavioural science research in his book Nudge, to explain how we make the choices we make and how to improve them.

The cognitive bias cheat sheet by Buster Benson is a great summary of our biases and what our brain is trying to fix.

R Yu looks at how stress impacts our decisions in his research paper Stress potentiates decision biases