Bias underscores many of our actions and the actions of businesses in often imperceptible ways. Acknowledging that bias exists is important, but that in itself is not enough to actually reduce its presence. In an article for McKinsey, Tobias Baer, Sven Heiligtag, and Hamid Samandari describe specific processes by which you can “debias” various types of decisions in business.
Blind Spots of the Brain
The strategies commonly employed to reduce bias in decision-making right now just do not work very well, according to the authors. They say that, even when training is provided to specifically get people to excise bias, biases persist. Instead, it is more reliable to have people use a wholly separate decision-making process. What that process looks like will vary depending upon the decision to be made.
High-frequency decisions will by nature benefit from analytics tools, which are regularly evolving. However, the models devised to assist in decision-making are themselves susceptible to bias. That means the models must be reexamined and revised for bias at regular intervals, and the authors encourage having an independent team validate the model’s effectiveness.
Debiasing low-frequency decisions will require people to deprogram the biases in themselves. It is common for people to be able to see other people’s biases but not their own, because they suffer from overconfidence that they are in full, impartial control of themselves. Perhaps employees should be more open about identifying each other’s biases for them.
There are many specific techniques for debiasing that exist, such as the formal challenger role, “by which a devil’s advocate or independent observer confronts biasing behavior actively and explicitly.” However, the authors find that all debiasing processes ultimately have three actions in common:
In diagnosis, past and present group and individual decisions are analyzed for bias. The way that decisions are arrived at is then examined by experts in behavioral science to see if markers for specific biases are present. Next comes design:
In the design phase, the key biases are matched with the best debiasing strategies in light of the organizational and process context. Many interventions are available for every kind of bias and bias combination. The selection of specific measures and how they should be tailored to fit the particular decision-making context can be worked out in an off-site event with executives, committee members, and experts. The special setting also helps build awareness for cultural change. In solution design, simplicity will be an important factor for success. Better decisions emerge from a small number of carefully targeted interventions against the most critical biases, rather than a grab-bag of “nice to have” best practices.
Then you just have to implement the process and ensure it sticks. After that, you will likely see a gradual increase in financial performance. For lengthy deeper discussion on debiasing techniques, you can view the original article here: http://www.mckinsey.com/business-functions/risk/our-insights/the-business-logic-in-debiasing