Tackle organisational bias and de-risk your decision-making
Bias is nothing more than predisposition of a psychological, sociological or even a physiological nature. It is the lens through which we see the world – formed as a result of who we are, our worldview, personality and all of the influences, experiences and exposure we have had since the day we were born. In short, it is the way we see the world – and therefore it influences the way we make decisions – often at a level of which we are sublimely unaware.
Smart organisations are starting to sit up and take note of the potential impact biases may be having on critical decision-making. Many are undergoing training and putting in mitigation strategies and are reporting better performance and greater diversity of thought.
The key consideration in business decision-making, is the degree of risk to which it subjects an organisation. The question is – will ‘debiasing’ an organisation lead to lower risk and therefore conversely a level of reward? In a McKinsey survey of nearly 800 board members and chairpersons, they found that respondents ranked “reducing decision biases” as their number-one aspiration for improving performance.1
How does Bias put an Organisation at Risk?
There are many different biases that play out in organisational practice, which we will be covering later. In essence, biases cause people to focus too much on success, take action too quickly, try too hard to fit in, and depend too much on experts. How can we hire, retain, and develop the best people and make the best decisions in running our organizations if we are not even aware of the forces that dominate the choices we make?
The key is to recognise that in the workplace, we are making decisions about people, processes and strategies every day. Some of these decisions (not all) are mission critical. Being able to identify which decisions need deeper consideration and putting in some mitigating strategies to reduce biased viewpoints will always pay off.
Levels of Bias
For example, the affinity bias – the tendency to be drawn to what is like me…and move away from what is different.
At an individual level, it drives your decision to form a relationship with someone.
Played out at the organisational level, it may impact who you decide to bring into your team, who you decide trust more (or less as the case may be), who you share information with, how much you pay them and how much effort you put in supporting their careers etc.
Extrapolated into society, it creates this phenomenon of 'in-groups' and 'out-groups'. We favour groups made up of people we understand, who seem familiar to us, whom we feel we can trust etc. When it comes to the rest – the people in our out-groups, we are quick to denigrate and stereotype and don’t recognise that what we deem to be our ‘experience’ is in fact, just the lens we apply to the group.
5 Steps you can take to debias your organisation’s decision-making
Bias is not right or wrong – it just is. Taking the judgment out of it and recognising that we are all victims and perpetrators of bias, frees us up to have the conversation and explore the potential impacts.
Pick your battles
Identify the critical touchpoints at which decision-making takes place in your organisation.
Not all decisions are equally important. Think about the decisions that have the greatest impact on the organisation and work to put in strategies to debias these.
Crunch the numbers
Use data analytics to help you uncover your hotspots. E.g. are the people you are looking to hire into the organisation applying for your roles. Are they applying but not getting selected, or are they being selected, but not making it to interview? Get as much data as you can to highlight the issue, so that you can identify whether this is a priority issue, worth solving.
Walk the talk
Roll out training to the wider organisation and start from the top. Nothing sends a stronger signal to your employees, that you are serious about a step change, than your board and executive team jumping into the training room. It says that no-one is immune and you’re all in it together. After all, is there any group with a stronger mandate to make critical decisions in the organisation?
This is especially useful where there are high frequency decisions to be made e.g. hiring, commercial lending etc. But don’t rely solely on the modelling or algorithms to tell you the answer. Data itself can be prone to confirmation bias, where for example only the data the confirms our pre-held view is selected.
It seems that the case is clear for moving beyond biased decision-making in the workplace. Carefully chosen interventions can make a real difference in organisational decision-making and can lead to significant benefits (and reduce risk) in organisations. The key is to select a few key focal areas, try a number of different approaches and measure the results. There is no silver bullet, but the upside of getting it right will surely justify the effort required.
To find out how Diversitas can help your organisation, click here to talk to one of our consultants.