Keep Shining a Light on Unconscious Bias in Decision-Making
Last year we first explored on this blog the concept of unconscious biases in decision-making, and how strong leadership tries to expose and account for the hidden biases that negatively impact decision-making.
One of our core leadership mindsets, the Pursuit of Truth, remains on point in the battle against biases:
“… the best leaders model honesty and transparency as productive behaviors, and seek the same from the people who work with them. They want information, good and bad, so that they can pour more energy into good ideas, nip unproductive actions in the bud, reduce unproductive tangential work, and foster better alignment of the team’s effort with the organization’s mission.”
Implicit in the need for information “good and bad” is also the need for input unmoored to unconscious bias. All of us have multiple biases buried within us, and the self-aware leader is alert to their unhelpful influences, within themselves and in each team member.
Management consultancy McKinsey continually explores the negative impact of hidden biases, so we know it has the attention of senior executives. A recent article explored how companies that account for unconscious biases in their decision-making processes had improved results.
“Bias is costly. Take the effect of one kind of bias, stability bias, in one dimension of business, capital allocation, as an example. McKinsey research has shown that companies that allocate capital dynamically—rebalancing regularly according to performance—return between 1.5 and 3.9 percent more to shareholders than companies with more static and routinized budgeting.”
While capital allocation is a more obvious candidate for eliminating “old thinking” and “static planning,” the example holds in our own work developing leaders in multiple industries. Managers who are given the tools to be able to explore their own biases in depth, successfully separating these influences from their ego or self-worth, do make better decisions. They also train their own staff in battling biases, so that they become a more objective, creative decision-making team. They also get permission to challenge “group think” and play devil’s advocate. These are healthy ways to pursue truth and improve decisions.
The other benefit: Real, engaged buy-in by the team when it comes time to execute a plan. The more honest and open the decision-making process, the fewer festering objections linger within the minds of team members. This allows a more energetic adoption by everyone of the team’s decision and action plan, even if a particular team member initially championed a different approach.
The McKinsey authors make another great point, about challenging even long-term cultural norms and processes that seem to be humming along fine.
“These decisions and their governing processes can be so deeply embedded in the institutional culture that they might not appear to be open to question—or even recognized as decisions. The failure to take debiasing actions in these areas means that most of the potential bottom-line impact from debiasing remains unaddressed.”
This is a great area to pursue truth. Processes that seem to be humming along well enough, that “ain’t broke” and so don’t get challenged, may hide areas of improvement. This is once again “stability bias.” It may be true that the process is about as efficient as it can be, but a regular deconstruction and examination must happen to ensure that this is the case. Machines wear out without maintenance. So do governing processes!
Ultimately, all process efficiencies boil down to the people running the process. What biases do they bring to the equation? Which of those hidden influencers are hindering the chance for improvement? You cannot completely “debias” people, of course. The goal is to explore what biases may be influencing a person’s position or actions, and address only those biases that are most critical to the current idea under discussion.
Bias awareness is more than half the battle, though! Once the team signs on to the idea that everyone has biases, and that each person must be rigorous about accounting for their own, subjectivity can be contained and decisions improved.
How have you and your team addressed unconscious biases? Is it a management topic, if not a priority? Do you face up to the fact that they exist and need managing? If not, should you? What is gained by leaving decision-making processes as they are?