Left or Right? Let's decide!

A few days earlier, I was reading a book called ‘Factfulness’ authored by Rosling Hans. It’s a wonderful and carefully written book based on perceptions and preconceived notions. I learnt several things, if not more, at least 10 reasons how I was wrong about the world. It also hit me hard when only 7 out of 13 questions were answered rightly from my end but I shall save that story for some other time. I am writing this blog to discuss something which is quite destructive for any role/designation/organization/process. Its impact is equally bad for CXOs as it is for the entrepreneurs. Likewise, It has an equal effect on engineers as it has on a people’s manager.

I am going to talk about Cognitive Biases and introduce the framework to initiate debiasing

Demystifying Cognitive Biases

Before we start, it's important to distinguish between cognitive biases and logical fallacies. A logical fallacy is an error in logical argumentation (e.g. ad hominem attacks, slippery slopes, circular arguments, appeal to force, etc.). 

In the early 1970s, Amos Tversky and Daniel Kahneman introduced the term ‘Cognitive Bias’ to describe people's systematic but purportedly flawed patterns of responses to judgment and decision problems. Cognitive biases are ways of thinking about and perceiving the world that may not necessarily reflect reality.

We, as human beings tend to have our own perception towards things and we experience the world around us with perfect objectivity (in our opinion of course) but this is far from the reality. Everyone, I repeat, every one of us has different set of eyes to see things differently even if we are addressing the same scenarios. This is based primarily on our perceptions, past experiences, learnings and other external factors (environmental and social), but this is far from the fact how we see, think, or feel about something as an actual representation of reality. 

To simply put, Cognitive biases are nothing but different virtual glasses through which we see the world.

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Which pair of Glasses are you wearing?

We love choices, aren’t we? We have several choices in terms of Cognitive biases too. Would you be interested to know how many? More than 180.

Let’s explore more!Out of the many biases that exist, we will discuss a few commonly used and how they affect different functions we perform in our day to day lives.

1.       Confirmation Bias: A confirmation bias is a type of a cognitive bias that involves favouring information that confirms your previously existing beliefs or biases. This preferential mode of our behaviours leads to the confirmation bias.

For instance, imagine a person holds a belief that engineers are generally good coders. Whenever this person encounters an individual who is a combination of an engineer and a skilled developer, they would place a greater importance on this "evidence" which supports what they already believe in. 

Impact of Confirmation Bias- Unfortunately, this type of bias can limit us from looking at situations objectively and makes us rely on our presumptions. Later on, this can also influence the decisions we make which might lead to poor or faulty choices.

2.       Anchoring Bias: This generally implies relying too much on the initial information provided for a decision making. In other words, consider a Product manager, working on discovering the pain-points based on the initial information about the product and start working on a solution before deep-diving into the problem identification and as a result, on a later stage, created a solution which won’t be as effective as it should have been.

Impact of Anchoring Bias- It limits us from deep diving and blocks us from considering a wholesome picture.

3.       Gambler’s Fallacy: This one is my personal favorite. This argument assigns a probability to a random event based on a notion that the history of ‘A’ event has some influence on its probability of future occurrences.

Daily life example- A few days back, I was placing an order from one of the prominent ecommerce sites. My mother suggested me not to do so as our previous orders were cancelled, thrice. As an alternative, she suggested an option of buying the same thing offline and sending it through a courier service.

4.       Hyperbolic discounting: I will not give a bookish or a textual description of the same instead iterate how my father defines it. So, technically this one is my father’s favourite. Although he doesn’t identify this by its name as hyperbolic discounting yet he has his own way of defining it. Hyperbolic discounting is defined as: when we choose relatively smaller immediate benefits over the larger, later rewards which doesn’t prove beneficial in the longer run.

Impact of hyperbolic discounting- It prevents us to explore the opportunities and possibilities to the fullest.

 5.       Illusion of validity: Have you ever thought if you can make accurate predictions, and interpret data subjectively such that it strengthens your predictions? If yes, then my friend, you have an illusion of validity. This bias exists because of a confirmation bias – the desire to find an information that fits our prediction and the representativeness

6.       Ostrich effect: The ostrich effect, prevalent especially amongst financial investors who have the tendency to avoid dangerous or negative information simply by closing oneself off from this information, or “sticking one’s head in the sand” as an ostrich would.

7.       Post-Purchase rationalization: This generally happens when someone purchases a product or a service and proceeds to overlook any faults or defects in order to justify their purchase. I have witnessed this a lot in super holiday offers on e-commerce websites where sentimentality and emotions are bigger and people help them achieving the record-breaking sales (I am guilty too, occasionally :P)

8.       Reactive devaluation: We all have done this at some point in our lives. Trust me. Reactive devaluation is a cognitive bias that occurs when a proposal is devalued if it appears to originate from an antagonist. To rephrase this, if any idea is put on the table by people whom we don’t like, automatically we try and find errors/loopholes in that idea. Devaluation of ideas as it is originated from an adversary or an opponent is what we call reactive devaluation.

Try and recall the meeting where this happened with you or you have witnessed the same

9.       Risk compensation: Risk Compensation, which was studied in detail about motorway accidents by Professor Sam Peltzman in 1975, describes a way in which humans will be more likely to take greater risks when they feel they’re protected by a set of certain factors.  According to Wood (2006), people strive towards achieving risk homeostasis in which they work to maintain a target level of risk with which they are most comfortable

10.   Status Quo bias: Change is permanent but change is scary too. That is why people tend to be the way they are. In psychology, Change can be scary for many people, which is perhaps why many tend to prefer simply the way they are. In psychology, this tendency is known as the status quo bias, a type of cognitive bias in which people exhibit a preference for the way things are in the current scenario. When changes occur, people tend to perceive them as a loss or detriment. The status quo bias can make people resistant to change but it can also have a powerful effect on the decisions they make. The term "status quo bias" was first introduced by researchers William Samuelson and Richard Zeckhauser in 1988. In a series of controlled experiments, Samuelson and Zeckhauser found that people show a disproportionate preference for choices that maintain the status quo.

The most recent and relatable example is a work from home scenario after the breakout of COVID’19 pandemic. These restrictions are forced upon people and hence people are not willing to change readily. 

11.   Stereotyping: This is the most common of all types. Stereotypes refer to beliefs that certain attributes, characteristics, and behaviours are typical of members of a particular group of people. Stereotypes are maintained and reinforced by powerful mental biases that filter out information that contradicts or challenges pre-existing beliefs or attitudes.

Impact of Stereotyping- This biases will keep you away from reality and Researchers have shown that stereotyping and associated responses are automatic and unconscious.

12.   Endowment effect: The tendency for people to ascribe more value to things merely because they already own/have them

13.   Courtesy Bias: This is a general case when we discuss religion and politics. Courtesy Bias is expressing your opinion/conclusion that is viewed as more socially acceptable to avoid offending/controversy. Another definition would be; The Courtesy Bias is the reluctance of an individual to give negative feedback out of fear of being offensive. A person tends to adopt a more socially correct opinion than of their own, looking to avoid displeasing those asking the question.

For example- Try to remember the rocking presentation and feedback you get “in the room” during the pitch may be different to that of the actual result.

14.   Clustering Illusion: When we try to find a different pattern in the information when no pattern exists

15.   Blindspot bias: This is a very interesting one, viewing oneself as less biased than others

16.   Belief bias: Again, this is one of the most common forms of a cognitive bias. We all have our own beliefs and our understanding of subjects. It has probably altered our acceptance of arguments more than we would like to admit. Belief bias is one of the most common forms of cognitive bias. It has probably altered your acceptance of arguments more than you would like to admit. Belief bias is a type of cognitive bias wherein we are more likely to accept the outcome of something if it matches our belief system.

17.   Bandwagon Effect: Ever experienced a phenomenon that suddenly everyone around us adopts certain behaviour/practices in trend. The bandwagon effect refers to our habit of adopting certain behaviours or beliefs because many other people do the same.

Example- Watching GOT, trending episodes, playing video and playing PUBG is a perfect example of this.

Road to De-biasing

Cognitive biases are challenging for decision-making and innovations as they have huge impact on the right side brain, which is critical for divergent ideas. To start debiasing, following is the proposed framework:

READ

• R- Recognize the biases- Identify the biases; it will help you to create an elimination strategy. Identify specific biases affecting you or your team and along with impact moments by listing them individually
• E- Engage with the biases- do not leave the biases to impact your decision. Reflect and challenge biases identified openly, discuss the impacts on the key decision-making points. Engagement could be done with the following proposed activities:

I. Challenge the status quo

II. Seek multiple perspectives

III. Search for more data and information to back your decision

IV. Play multiple roles (6 thinking hats may be helpful)

A – Abase it – Degrade the biases by neglecting it to the lowest: almost to the level that it does not exist.

D- Deliver - Take decision by Rechecking, re-confirming and closing the decision.

We need to become aware that our decision-making and selection criteria can and are being affected by the sub-conscious biases. To break this down, we need to think about the way our team and we are thinking and challenging each other. This takes continuous practice and time like any other new skill. The brain has high-plasticity with the ability to change continually throughout life, after all, we all are humans.

In my next Article- I will talk about how these biases affects customer experience and how we can use READ to reduce that.