Come out of BIAS in decision making

Today's organizations take so many decisions that impact people, process, functions almost on a daily basis. Most organizations are going towards data driven strategy where data plays a role. In today's world, data is abundantly available, not only the relevant data as well as quality of collected data matter but also guarding against confirmation bias.

What is confirmation bias?

It is the tendency to interpret information in a way that corroborates what we already believe to be true. This bias is so widespread and has significant implications for business leaders who need to make sound and objective decisions based on available data.

Why does it occur?

Confirmation bias occurs from the direct influence of desire on beliefs. When people would like a certain idea or concept to be true, they end up believing it to be true. They are motivated by wishful thinking. In other words, two things happen:

• we stop gathering information when the evidence gathered so far confirms the views or prejudices one would like to be true.
• we ignore the data, collected so far that refutes our thinking, and keep stockpiling with only those that are in tune with our thinking

Poor outcome and morale

Both are very problematic. I have seen in many consulting and assessment studies, both the situations happening. In one of the portfolio assessment exercise, the CIO believed that moving to cloud would be the best solution and the data, given by his team, confirmed this. When we looked at the data and asked for us to do some more data collection from different parts of the organization, the CIO readily agreed for he was supremely confident of his notion. After we incorporated the newly collected data from another division of the organization, the savings due to cloud migration, seemed to dampen so much. The business case, which he thought was there for the taking, was not evident anymore.

Such decisions lead to poor outcomes. It is a chain reaction leading to decreased trust, satisfaction and eventually resulting in the deteriorating dashboard of the organizations.

Echo chamber

To me, another downside (or the more important one) is unwillingness to listen to other ideas that directly contradict with the set notions. Such leaders are unlikely to consider alternative viewpoints. In fact, many employees may not be willing to take any idea to them. This can lead to a lack of diversity in the organization's decision-making process, which can limit innovation and creativity. Eventually, the culture of the organization is compromised heavily where accountability and transparency take a direct hit. To recover from that, will be a long journey indeed.

Overconfidence

When leaders believe that their existing beliefs are always correct, they may become complacent and fail to consider alternative viewpoints or feedback. This can create a false sense of security that can lead to poor decision-making and missed opportunities. For example, a business leader who is overconfident in their company's market position may fail to consider new competitors or emerging technologies that could disrupt their business.

How to overcome?

To avoid the dangers of confirmation bias, business leaders must actively seek out diverse viewpoints and opinions. This can be achieved through a variety of methods, such as seeking feedback from customers, engaging with stakeholders, and encouraging dissenting views within the organization. Additionally, leaders should seek out information that contradicts their existing beliefs to ensure that they are making decisions based on all available data.

It is also essential for business leaders to cultivate a culture of transparency and accountability. By encouraging open and honest communication within the organization, leaders can create an environment where alternative viewpoints are valued, and dissenting views are encouraged. This can help to avoid the creation of an echo chamber and promote a diverse and inclusive decision-making process.

Finally, business leaders must be willing to admit when they are wrong and make course corrections when necessary. By acknowledging mistakes and learning from them, leaders can demonstrate a willingness to consider alternative viewpoints and adapt to changing circumstances. This can help to avoid overconfidence and arrogance and promote a culture of humility and continuous improvement.

To sum up:

• Do not twist the facts to fit your beliefs
• Critically examine the problem.
• Bend your beliefs to fit the facts.
• Truth seeking is not about validating the story in our head. Instead, it is about rigorously vetting and accepting the story that matches the reality.