Why Confronting Our Unconscious Biases Is Both a Moral and Business Imperative

In diversity there is beauty and there is strength -  Maya Angelou 

We were a team of eight (Korean, Singaporean, Indian, American, German, Chinese, Filipino and Israeli, including two women), serving a multinational consortium in deciding how much to bid in one of the largest privatization auctions in Asia’s history. What we achieved in four short and intense weeks in 2006 still amazes me.

Our rapid cross-pollination of knowledge and vigorous brainstorming led us to a comprehensive report and robust future cash flow projections within two weeks, at the end of which we recommended a multi-billion-dollar bid (a recommendation we reversed a week later). By week 4, we were asked to explain to the regulators the hard-to-spot formula mistake they had made, and the auction was suspended for over a year until the regulatory board finally agreed on the correction.

On that occasion and repeatedly since then, I have been able to see what has been decisively demonstrated in research. Diversity and inclusion are a business imperative, and racial, ethnic and gender diversity leads to better financial outcomes, customer experience and employee retention.

There is another amazing aspect to this story. The junior analyst on the team is now a global privatization expert supporting the Saudi Arabian government on their ambitious privatization efforts. Born with few privileges (he was a recent graduate of a local university who had never travelled abroad), he went on to graduate from Stanford Business School and to have a career that would have been as inconceivable when he started out as becoming the first astronaut to walk on Mars. 

It is a fact of life that those who are born with less privilege need to work harder for every opportunity and those who overcome such adversity are likely to be high achievers going forward (therefore inclusion=better talent). Yet, somehow, as we go about our daily lives, it’s possible to lose sight of that simple fact.

To appreciate how diversity leads to stronger teams and greater creativity, we need to unlearn our biases.

Diversity leads to better financial outcomes, customer experience and employee retention

In one of the most popular TED Talks ever, Alain de Botton points out that while a meritocratic society of strivers with the talent, energy and skill to reach the top is a beautiful idea, it’s also vicious in the implication that people at the bottom likewise deserve to be where they are.

A true meritocracy eludes us for too many reasons to list, with factors like health, gender, race, ethnicity, appearance and demeanour, language, sexual orientation, birth order and family size, relative school age, education, religion and economic cycles all coming into play. However, while we largely accept that the idea of social meritocracy is only directionally true, we still make decisions about whom to hire and invest in at work as though we’re actually living in one.

I recently read the book Educated, a mesmerizing memoir by Tara Westover. It’s a remarkable story, told with great candour and careful introspection. It takes a string of miracles for the completely uneducated author to enroll at Brigham Young University and escape the dangerous work of scrapping metal at her family junkyard under the power of a domineering, bipolar, survivalist father who shunned schools and hospitals. As the story unfolds, this reader (and I suspect other readers) oscillated between thinking about how unlucky and lucky she is. Unlucky to have to confront such obstacles and lucky to have miraculously overcome them.

The inconvenient truth is that Tara wasn’t particularly unlucky in the ovarian lottery but was extremely lucky to end up with a Cambridge PhD and a Harvard fellowship. In other words, most people are born with an infinitesimal chance of having the kind of life that people born into privilege take for granted, and upward mobility is increasingly rare. 

Paradoxically, when we read stories or watch films about success-against-all-odds or rags-to-riches, it supports our innate desire to believe that our society is fair and hardens our judgment towards cases that deserve more consideration. However, the people who fail to overcome poor odds don’t write memoirs, and no one films their difficult lives.

The “survivorship bias” or “fallacy of silent evidence” is a powerful tendency to give too much weight to evidence that’s highly visible to us while discounting what we can’t see. Indeed, we tend to give far too much consideration to feel-good success stories, leading to the illusion that we live in a meritocracy.

Here are four practices to help counteract our unconscious biases and successfully make a dent towards our diversity objectives: 

Rethink how you make decisions

First, we must recognize the inevitability of unconscious biases. Research has shown that the more convinced people are about their ability to be objective, the more likely they are to make biased decisions. I used to play this video with my teams at McKinsey as a powerful way of showing how absurd many unconscious gender biases seem if you reverse the gender and apply them to men. It is okay that we are fallible, but we need the discipline to put a system in place that will address this, just like we use calendars and other reminder systems to be more reliable and productive with our time.

I have made a big effort across my team in recent months to define a set of detailed attributes that can guide our recruiting and our performance assessment. For some people, it seemed like a tedious exercise, one that fit bigger companies and not startups. But having clarity at a granular level far ahead of making decisions about whom you are looking to hire or what you value is essential to neutralize or at least weaken biases.

Until the top orchestras in the US started to use blind auditions, it was almost impossible for women to pass them, but adopting the practice immediately increased women’s success rate by 300%, and the share of women in these orchestras increased from 5% to 25% in a couple decades. Experiments have shown that similar biases in promotion decisions almost disappear if you require the deciding team to first define the decision criteria.

Feed the funnel

Walmart.com CEO Marc Lore is known to be Jeff Bezos’s fiercest e-commerce competitor, and he shares at least one skill with the world’s wealthiest man: the ability to share compelling leadership lessons in a pithy and direct style. In his excellent recent article about promoting equality for women, Lore’s first piece of advice is to “start with a diverse slate of candidates”. Embarrassingly simple and rarely applied.

Diversifying candidate pools should be an imperative not only for recruiting but also development and leadership programs and promotion decisions to ensure we have a greater diversity of options at every career stage. While I can improve in every aspect mentioned in this article, this is the one I personally must work on the most.

Get to know the person and their background

Conventional wisdom about unconscious bias holds that by asking candidates for fewer personal details, we protect ourselves from unconscious bias (or from appearing biased). I believe this is a good example of why many diversity programs fail – especially when giving too much advice about what NOT to do. 

Personally, I wish I could visit the childhood home and meet the family of every candidate and team member I work with. In fact, over 20 years ago, I did that as a military officer. About a third of the soldiers under my command came from immigrant families (especially from ex-USSR and Ethiopia) and I visited their families to learn more about their situation and help them qualify for financial aid. It was eye-opening and changed the way I treated many of them. In the case of one soldier, the same behaviour I had judged to be apathetic I came to see as resolute after learning that he was the only Hebrew-literate member in a family of eight (with five younger siblings all sharing one room) and had been preoccupied helping his family on difficult legal matters.

We can at least do the virtual tour. A conversation may not create the visceral experience of a full home visit (nor can you fully go back in time), but we can learn about colleagues over multiple interactions. I like to ask: “What in your life taught you the most about dealing with adversity?” I find that it disarms people who are concerned about sharing their background but immediately understand that I am asking about it because I value resilience.

Getting authentically personal also builds deeper connections and creates a psychologically safer environment.

Mentor out of your comfort zone

As I have written in a previous post, another bias we suffer from (sometimes gravely) is implicit egotism or the tendency to gravitate towards people who resemble us. It can initially feel awkward to mentor people with different backgrounds and who come from different cultures. But, ultimately, it can lead to a richer experience on both sides as perceptions are altered by learning about each other. Strength lies in differences, not in similarities.  

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It’s easy to measure the scale of diversity and inclusion gaps in our society but much harder to measure how much of that is a result of conscious versus unconscious bias. I desperately want to believe that the power of explicit bias is waning and that fewer and fewer people are being excluded based on overt discrimination. I also hope that the demonstrable benefits of gender, ethnic and geographical diversity in business leadership and cognitive diversity in teams will gradually change the landscape, since firms that survive and flourish are likely to embrace both of those principles.

Yet, without us unlearning our unconscious biases, change will still take too long.