Biases influence our decisions and interactions without us knowing, explains Katie Spearritt.
Business decisions inherently involve some level of unconscious bias – those incredibly quick judgments and assessments we make of people and situations without realising it.
If you are growing your business, engaging with new clients, changing your service offering or growing your team, then be aware that your unconscious biases can limit those initiatives by limiting your thinking and stopping you considering new information or ideas that may be critical to success.
Unconscious biases are the associations and stereotypes we make based on life experiences, cultural norms and the environments we live in. Think of them as the automatic shortcuts our brains make to help us make sense of people and situations and move through the day. Our brains develop these shortcuts to bring some simplicity and ease to the plethora of complex decisions and thoughts we have to process, often on a split-second basis, such as ‘Should I cross the road now?’ or ‘Shall I avoid taking this shortcut at this time of night?’
It’s important to understand that having biases isn’t ‘bad’ – we’re all biased (and extensive research from the fields of business psychology and neuroscience proves it). And they result in negative and positive consequences.
An example of the positive are our biases connecting us to people, helping us make friends and share experiences. This is particularly obvious in social situations – you may find yourself gravitating to people who follow the same football team as you, like the same fashion labels, who work in the same industry or who like the same type of music.
It's natural, and it’s known as ‘affinity bias’.
But at work this preference for similarity can often lead to sub-optimal outcomes.
Unconscious biases, when present at work, can prevent us from considering new information or other perspectives; our thinking and decision making may become closed, limited, and potentially risky by leading us to identify with what is familiar to us.
Unconscious biases relating to gender, cultural background, age and other identity groups inhibit diversity, depriving us of the enrichment that can bring to an organisation.
When we are aware of our biases we can more consciously lead with intent and drive more effective business outcomes.
There are many different types of cognitive bias that can impact decisions. Affinity bias, gender bias and confirmation bias are common types that can hinder business decision making and performance, and get in the way of progress.
Described above, this bias can become problematic as it leads us to subscribe to subtle stereotypes about different demographic groups, which can cause us to overlook or unintentionally exclude them, often without sound reason.
This was highlighted by diversity and inclusion expert Sandy Caspi Sable earlier this year in a training session with financial advisers in Sydney and Melbourne about unconscious-bias. Conducted in collaboration with ANZ Wealth and Future Women Academy, Caspi Sable shared practical tips to identify biases, particularly in recruitment and succession planning.
When leaders form a favourable view of someone who resembles them – whether that be through similarities in physical appearance, age, cultural background, class, gender or personality – it can mean that talent who look or think differently can be overlooked and unconsciously excluded from career opportunities.
Surrounding yourself with people like you at work also limits how effectively you problem solve and makes it more difficult to see things from a range of perspectives – ultimately stifling innovation and creativity.
This is described as ‘a preference or prejudice toward one gender over the other’ – and while it can be expressed overtly, more often than not this type of bias is expressed subtly or unconsciously and can have significantly negative effects.
For example, there is extensive research showing that when people evaluated job candidates’ resumes that were identical, male candidates were more likely to be hired, paid more and offered more support – by both male and female recruiters.
In the training sessions, Caspi Sable highlighted that unconscious gender bias can impact our customer interactions too. For example, many advisers may think they’ll mostly be talking to men in customer interactions (because of stereotyped associations) however it is women making 80 per cent of household purchasing decisions, and likely to be the primary decision-maker that they need to reach.
Confirmation and conformity bias
We tend to be drawn to evidence that confirms our own beliefs and preferences, making it easy to discredit alternative views and ignore evidence that contradicts our own beliefs. This is known as confirmation bias.
Similarly, conformity bias is our tendency to rely on the views of others when forming our own opinions. For example, if a majority have one opinion on a particular matter, while a minority have another opinion, the minority will tend to change their views to agree with the majority, even if they personally don’t agree with those views at first.
A subcategory of conformity bias is termed ‘sunflower management’, which is where groups in the workplace tend to align with the views of leaders, especially when the boss speaks up first.
These biases can prevent diversity of thought. This is of concern as different ways of thinking are crucial for better decision-making, innovation and higher levels of employee and customer engagement.
Knowing your unconscious biases and having systems and processes in place to ‘catch’ them not only improves your personal leadership, it will improve your business.
A study by McKinsey of more than 1000 major decisions by managers – including investments in new products and mergers and acquisitions – showed higher returns on investments if those decisions used a process to check unconscious bias.
Gender diversity is associated with better business performance. A recent report, Women & Financial Wellness: Beyond the Bottom Line by Merrill Lynch found a direct correlation between share price premiums and gender diversity.
Unconscious bias is an issue every organisation faces, whether they know it or not.
While it can be tricky to address, leaders can work to minimise biases in their organisations through a blend of awareness, identification, process creation and education that can help to balance decision-making.
To help you identify your own biases, preferences and beliefs, you can take the Implicit Association Test, a free tool developed by a consortium of researchers from Harvard University, Yale University, the University of Virginia and the University of Washington. There are versions of the IAT specifically developed for different countries. The Australian tests can be found here.
Slowing down your thinking is also important, because the unconscious default is fast and error-prone. Our biases and blind-spots are exacerbated when we’re under pressure or feeling tired.
The reality is it’s hard to control our automatic or default judgements. That’s why decision-making experts suggest we move from the individual to the collective with a decision-making process.
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