The older I get the more worried I become that I am not paying enough attention to the different biases, which have evolved and developed consciously and subconsciously over the years. I wonder if the decisions I make over-rely on these biases and related assumptions, which are based on experiences and learned behaviors. As I was thinking about this more, I remembered the movie “12 Angry Men”, which is a real interesting case-study how greater bias-awareness allows the main character to influence and to a certain extend actually manipulate the jury in their decision-making processes. I believe that strong leaders are keenly aware about the risks and unintended consequences inherent biases have on our day-to-day lives. Here are some of the biases the movie highlights:
Affective Forecasting: One of the most difficult biases to overcome and the one we all are more likely to fall victim to is the so called “affective forecasting” bias. This bias has a direct impact on the decisions we make, because this bias leads us to judge an outcome by comparing our expectations with the actual experience. The key risks here are that we are dealing with multitudes of inference and an over-reliance on assumptions. Naturally, we all rely on assumptions, since they are the result of our experiences and the more successful we are the more comfortable we are that our assumptions are right. Great leaders know that relying on assumptions and past experiences can lead to bad outcomes and they encourage their teams to not spend too much time assessing conclusions. They rather focus on challenging the underlying evidence and data, as well as, encourage constructive dialogues, an open mind and inputs from all sides. I think this is of particular importance as we are dealing with complex and difficult issues.
Anchoring: From the many different forms of biases, “anchoring” seems to be one of the most challenging ones to overcome. For example, we have a tendency to anchor on negative experiences, which creates an asymmetric effect. The movie does an excellent job bringing this bias to light, by highlighting how some of the 12 jurors judge situations and evidence based on certain isolated negative experiences and stories they have heard. We sometimes make the same mistake and emphasize negative over positive experiences and as a result tend to overestimate the level of risk. I have served in many different risk management roles over the years and have seen this bias in action multiple times. The key to strong risk management is not over-estimate nor to under-estimate the risk level. At another organization in response to the famous North-Eastern power outage, one executive insisted that we supply satellite phones to all managers in the organization, which turned out to be hugely expensive and completely ineffective in crisis situations. This is a good example how one negative experience anchored an over-estimation of risk.
Bandwagon: There many other biases the movie highlights - including confirmation and projection biases - which are particularly relevant from a business perspective. However, the one which particularity jumped out for me was the so called “bandwagon” bias, which deals with the fact that if more people do or believe something, the likelier others are to join them, in spite of any contrary evidence. For instance, 11 of the 12 jurors were all too happy to jump on the “guilty” bandwagon. Naturally successful marketing campaigns take advantage of this bias, but as I am increasingly thinking about operational excellence and resiliency in our organization, I worry about this bias a lot. Especially, as it relates to culture and intrinsic organizational behaviors, which may not effectively challenge the status quo or perceived viewpoints. It is imperative to establish a context which fosters an open, non-judgmental and constructive dialogue, to guard against this bias.
In conclusion, leadership by its definition is all about human interactions. However, our human interactions are based on well-documented biases, which can lead to a total leadership vacuum or communications breakdown. Again and again, I encounter situations in which a greater awareness about both real and perceived biases would have created a more productive outcomes, a more effective discussion and would have led to more proactive decision-making. I conclude, going back to the “12 Angry Men” with one of the best Henry Fonda’s Juror #8 quotes: “Prejudice always obscures the truth”. Be aware about the bias traps!