How Do We Reduce Cognitive Biases in Organizations

The articles of this blog are an illustration of the diversity and strength of biases that impact our business decisions. Identifying them is not easy, especially if they are part of the corporate culture. For instance, if everybody in a company agrees that female managers are underrepresented among expatriates because they are less geographically flexible than their male peers, it is probable that newcomers will fast integrate this stereotype, no matter if it is true or false.

Statistical and decision-making process analysis, interviews and cognitive tests can help quantify biases both on the individual and organizational level. Although it is a good first step, knowing that we have particular biases is not enough to remove them. Even if we know, for a gender-balanced position, that meeting five male candidates is as probable as meeting two male and then three female candidates, we will remain more surprised in the first case than in the second. So what can be done?

Cognitive biases may be tackled on three levels:

Individual level: Frequent, practical exercises are the most effective way to reduce biases over the long run. The 2010 McKinsey Quarterly article by Olivier Sibony and Dan Lovallo explore a few of these excellent practices, including the case for behavioral strategy and the ”WRAP” framework, proposed by Chip and Dan Heath. Similarly, an effective program to reduce social biases via Implicit Association Tests has been designed by Professor Devine from the University of Wisconsin.

Team level: Rather than tackling individual biases directly, they can be counter-balanced by taking them into account when building your team. He is a risk-taker? What about making him work with more conservative team members? It is also possible to make the most of cognitive biases by putting the right personality to the right position and project. Biases are, indeed, not ”good” or “bad” in the absolute. We are an overoptimist? That is a plus if we are an entrepreneur or the manager of a decaying brand.

The two previous approaches are however limited. Few studies have been carried out so far on the real effectiveness of programs to reduce individual biases. Moreover, as for all psychometrics, there is always a danger of misuse by putting people in artificial and rigid categories.

Process level: A quick, easy and effective way to reduce biases is to allow a little room for biases when building your decision-making processes. For instance, if staffing is automatically managed by a software or an independent mediator, there is less chance that unfoundedly labeled ”stars” get the best missions, and it is effective! According to the 2010 McKinsey Quarterly article cited above, organizations which have worked at reducing the effect of bias in their decision-making processes have achieved returns up to seven percentage points higher.

process, team and individual bias

References:

“The case for behavioral strategy,” McKinsey Quarterly, Mars 2010, Dan Lovallo and Olivier Sibony
Devine, P. G., Forscher, P. S., Austin, A. J., & Cox, W. T. (2012). Long-term reduction in implicit race bias: A prejudice habit-breaking intervention. Journal of experimental social psychology.
Decisive: How to Make Better Choices in Life and Business (Crown Business, March 2013) by Chip and Dan Heath .
People are irrational, but teams don’t have to be! HBR blog (2012), Francesca Gino