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Published on May 21, 2020

How Cognitive Bias Influences Our Decision Making

How Cognitive Bias Influences Our Decision Making

Cognitive biases are dangerous judgment errors that can devastate our health and wellbeing, our relationships, careers and businesses, and other areas of our lives.

To protect yourself against these mental blind spots, you need to know what they are, where they come from, and what you can do about them. That’s what this article is about.

Cognitive Biases on the Road

For an example of cognitive bias, imagine you are driving on autopilot, as we all do much of the time.

Let’s be clear, it’s a good idea to let your automatic response be in the driver’s seat when you are doing tasks that don’t require your full focus and attention. In ordinary driving situations – without inclement weather or start-and-stop traffic – you don’t need to use up your mental resources by turning your full focus on driving.

Now imagine that, as you are driving, the car in front of you unexpectedly cuts you off!

What do you do?

Well, you have to slam on your brakes to avoid a crash. Maybe you flash your lights or honk your horn. You feel scared and angry.

Your sympathetic nervous system activates, shooting cortisol throughout your body. Your heart beats faster, your palms start to sweat, a wave of heat goes through your body. [1]

What’s your gut feeling about the other driver? Probably your first impression is that the driver is rude and obnoxious.

Now imagine a different situation. You’re driving on autopilot, minding your own business, and you suddenly realize you need to turn right at the next intersection. You quickly switch lanes and suddenly hear someone behind you honking their horn.

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You now realize that there was someone in your blind spot but you forgot to check it in the rush to switch lanes, so you cut them off pretty badly.

Do you think that you are a rude driver? The vast majority of us would not. After all, we did not deliberately cut off the other driver; we just failed to see their car.

Let’s imagine another situation: your friend hurt herself and you’re rushing her to the emergency room. You’re driving aggressively and cutting in front of other cars.

Are you a rude driver? You’d probably say you are not; you’re merely doing the right thing for this situation.

Misattributing Blame Due to Cognitive Biases

Why do we give ourselves a pass while assigning an obnoxious status to other people? Why do our guts always make ourselves the good guys and other people the bad guys?

There is clearly a disconnect between our gut reactions and reality. This pattern is not a coincidence

Our immediate gut reaction attributes the behavior of other people to their personality and not to the situation in which the behavior occurs. The scientific name for this type of cognitive bias is the fundamental attribution error.[2]

This judgment error results in the following: if we see someone behaving rudely, we immediately and intuitively feel that this person is rude. We don’t stop to consider whether an unusual situation may cause the individual to act that way.

With the example of the driver, maybe the person who cut you off did not see you. Maybe they were driving their friend to the emergency room. But that’s not what our gut reaction tells us.

On the other hand, we attribute our own behavior to the situation, and not our personality. Much of the time we believe that we have valid and fully justifiable explanations for our actions.

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Are Cognitive Biases Really So Bad?

Don’t believe that such negative snap judgments about others can be harmful?

It may not seem very important whether you think wrongly that other drivers are jerks. Sorry to disappoint you, but this mental pattern posed a grave threat to your relationships.

As an example, what would you think of a potential business colleague if you saw her yelling at someone on her smartphone?

ou would probably have a negative reaction toward her and may not be likely to do business with her. Well, what if you found out she was yelling because she had her father on the other line who just misplaced his hearing aid and she was making plans to come to his house to help him look for it?

There can be many innocent explanations for someone yelling on the phone, but we are tempted to assume the worst.

In a related example, I was coaching a CEO of a company that had staff who worked from home due to COVID-19.

He told me about a recent incident with an employee who was having a heated Skype discussion over a conflict with an HR manager. The Skype call disconnected and the HR manager told the CEO the employee hung up on her. The CEO fired the employee on the spot.

Later, he learned that the employee thought the HR manager hung up on her. The call simply disconnected. Unfortunately, it was too late to take back the termination, even though the CEO regretted his heated decision.

This unfair firing situation really demoralized the rest of the staff, resulting in a growing disconnect between the CEO and other staff. It eventually contributed to the CEO leaving the organization.

Why Do We Suffer Cognitive Biases?

Intuitively, our mind feels like a cohesive whole. We perceive ourselves as intentional and rational thinkers. Yet cognitive science research shows that in reality, the intentional part of our mind is like a little rider on top of a huge elephant of emotions and intuitions.[3]

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Roughly speaking, we have two thinking systems, which neuroscientists call System 1 and 2. But it’s easier to think of them as the “autopilot system” and “intentional system.”

The autopilot system corresponds to our emotions and intuitions. Its cognitive processes take place mainly in the amygdala and other parts of the brain that developed early in our evolution.

This system guides our daily habits, helps us make snap decisions, and reacts instantly to dangerous life-and-death situations, like saber-toothed tigers through the freeze, fight, or flight stress response.

While helping our survival in the past, the fight-or-flight response is not a great fit for modern life. We have many small stresses that are not life-threatening, but the autopilot system treats them as tigers, producing an unnecessarily stressful everyday life experience that undermines our mental and physical wellbeing.

Moreover, while the snap judgments resulting from intuitions and emotions usually feel “true” because they are fast and powerful, they sometimes lead us wrongly in systemic and predictable ways.

The intentional system reflects our rational thinking and centers around the prefrontal cortex – the part of the brain that evolved more recently.

This thinking system helps us handle more complex mental activities, such as managing individual and group relationships, logical reasoning, probabilistic thinking, and learning new information and patterns of thinking and behavior. It can also lead to occasional decision-making errors, but it’s right much more often than the autopilot system.[4]

Train Your Intentional System to Address Cognitive Biases

While the automatic system requires no conscious effort to function, the intentional system takes deliberate effort to turn on and is mentally tiring.

Fortunately, with enough motivation and appropriate training, the intentional system can turn on in situations where we are prone to making systematic decision-making errors. Scholars use the term “cognitive biases” to refer to these errors.

The autopilot system is like an elephant. It’s by far the more powerful and predominant of the two systems. Our emotions can often overwhelm our rational thinking.

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Moreover, our intuitions and habits determine the large majority of our life, which we spend in autopilot mode. And that’s not a bad thing at all – it would be mentally exhausting to think intentionally about our every action and decision.

The intentional system is like the elephant rider. It can guide the elephant deliberately to go in a direction that matches our actual goals.

Certainly, the elephant part of the brain is huge and unwieldy, slow to turn and change, and stampedes at threats. But we can train the elephant. Your rider can be an elephant whisperer.

Over time, you can use the intentional system to change your automatic thinking, feeling, and behavior patterns, and become much better at making the best decisions.

That’s why you should never go with your gut, and instead check with your head on any decision you don’t want to get wrong.[5]

Conclusion

Let’s go back to the fundamental attribution error. Now that we know what cognitive biases are and where they come from, how can we explain this cognitive bias?

From an evolutionary perspective, in the ancestral savanna, it was valuable for the survival of our ancestors to make quick decisions and to assume the worst, regardless of the accuracy of this assumption. Those who failed to do so did not survive to pass on their genes.

In the modern world where our survival is not immediately threatened by others and where we have long-term interactions with strangers, such judgments are dangerous for our long-term goals. We have to address this and other mental blindspots to make good decisions, whether about our relationships or other areas in our life.[6]

So, take a few minutes right now to think about where in recent weeks you might have misattributed blame. Given the stress associated with the pandemic, it’s easy to do.

Take the time to reach out to those you wrongly blamed and apologize. Doing so can be the start of your life-long journey to recognize and defeat cognitive biases and make the best decisions.

More on Cognitive Bias

Featured photo credit: Evan Dennis via unsplash.com

Reference

More by this author

Dr. Gleb Tsipursky

Cognitive neuroscientist and behavioral economist; CEO of Disaster Avoidance Experts; multiple best-selling author

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Published on July 29, 2020

How to Build Strategic Thinking Skills for Effective Leadership

How to Build Strategic Thinking Skills for Effective Leadership

Have you been thinking of how you can be a more strategic leader during these uncertain times? Has the pandemic thrown a wrench at all your carefully laid out plans and initiatives?

You’re not alone. The truth is, we all want some stability in our careers and teams during this disruptive pandemic.

However, this now requires a bit more effort than before and making the leap from merely surviving to thriving means buckling down to some serious strategic thinking and maintaining a determined mindset.

Is There a Way to Thrive Despite These Disruptions?

Essentially – yes, although you need to be willing to put in the work. Every leader wants to develop strategic thinking skills so that they can enhance overall team performance and boost their company’s success, but what exactly does it mean to be strategic in the context of the times we live in?

If you happen to be in a leadership position in your organization right now, you are most probably navigating precarious waters given the disruptions caused by the pandemic. There’s a lot more pressure than before because your actions and decisions will have a much greater impact these days not just on you, but also to the people who are part of your team.

Companies often bring me in to coach executives on strategic thinking and planning. And while pre-pandemic I would usually start by highlighting the advantages of strategic thinking, nowadays, I always begin these Zoom coaching sessions by driving home the point that this pandemic has now made strategic thinking not just an option but an absolute must.

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Assessing and making plans through the lens of a good strategy might require significant work at first. Nevertheless, you can take comfort in the fact that the rewards will far outweigh the effort, as you’ll soon see after following the 8 strategic steps I have outlined below.

8 Steps to Strategic Thinking

As events unfold during these strange times, you’re bound to feel wrong-footed every now and then. Being a leader during this pandemic means preparing for more change not just for you, but for your whole team as well.

As states and cities go through a cycle of lockdowns and reopening, employees will experience the full gamut of human emotions in dizzying speed, and you will often be called on to provide insight and stability to your team and workplace.

Strategic thinking is all about anticipation and preparation. Rather than expending your energy merely helping your company put out fires and survive, you can put the time to better use by charting out a solid plan that can protect and help you and your company thrive.

Take the following steps to build solid initiatives and roll out successful projects:

Step 1: Step Back, Then Set the Scope

One of the things that leaders get wrong during their first attempt at strategic thinking is expecting that it is just another item on a checklist. The truth is, you need to take a good, long look at the bigger picture before anything else. This means decisively prioritizing and stepping away from tasks that can be delegated to others. Free up your schedule so you can focus on this crucial task at hand.

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Then, proceed with setting the scope and the strategic goals of the project or initiative you plan to build or execute. Ask yourself the bigger question of why you need to embark on a particular project and when would be the right time to do so.

You need to set a timeline as well, anywhere from 6 months to 5 years. Keep in mind that your projections will deteriorate the further out you go as you make longer-term plans.

For this reason, add extra resources, flexibility, and resilience if you have a longer timeline. You should also be making the goals less specific if you’re charting it out for the longer term.

Step 2: Make a List of Experts

Make and keep a list of credible people who can contribute solid insight and feedback to your initiative. This could range from key stakeholders to industry experts, mentors, and even colleagues who previously planned and rolled out similar projects.

Reach out to the people on this list regularly while you work through the steps to bring diverse insight into your planning process. This way, you will be able to approach any problem from every angle.

Bringing key stakeholders into this initial process will also display your willingness to listen and empathize with their issues. In return, this will build trust and potentially pave the way for smoother buy-in down the line.

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Step 3: Anticipate the Future

After identifying your goals and gathering feedback, it’s time to consider what the future would look like if everything goes as you intuitively anticipate. Then, lay out the kind and amount of resources (money, time, social capital) that might be needed to keep this anticipated future running.

Step 4: Brainstorm on Potential Internal and External Problems

Next, think of how the future would look if you encountered unexpected problems internal and external to the business activity that seriously jeopardize your expected vision of the future. Write out what kind of potential problems you might encounter, including low-probability ones.

Assess the likelihood that you will run into each problem. To gauge, multiply the likelihood by the number of resources needed to address the problem. Try to convert the resources into money if possible so that you can have a single unit of measurement.

Then, think of what steps you can take to address these internal and external problems before they even happen. Write out how much you expect these steps might cost. Lastly, add up all the extra resources that may be needed because of the different possible problems and all the steps you committed to taking to address them in advance.

Step 5: Identify Potential Opportunities, Internal and External

Imagine how your expected plan would look if unexpected opportunities came up. Most of these will be external but consider internal ones as well. Then, gauge the likelihood of each scenario and the number of resources you would need to take advantage of each opportunity. Convert the resources into money if possible.

Then, think of what steps you can take in advance to take advantage of unexpected opportunities and write out how much you expect these steps might cost. Finally, add up all the extra resources that may be needed because of the different unexpected opportunities and all the steps you committed to taking to address them in advance.

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Step 6: Check for Cognitive Biases

Check for potential cognitive biases that are relevant to you personally or to the organization as a whole, and adjust the resources and plans to address such errors.[1] Make sure to at least check for loss aversion, status quo bias, confirmation bias, attentional bias, overconfidence, optimism bias, pessimism bias, and halo and horns effects.

Step 7: Account for Unknown Unknowns (Black Swans)

To have a more effective strategy, account for black swans as well. These are unknown unknowns -unpredictable events that have potentially severe consequences.

To account for these black swans, add 40 percent to the resources you anticipate. Also, consider ways to make your plans more flexible and secure than you intuitively feel is needed.

Step 8: Communicate and Take the Next Steps

Communicate the plan to your stakeholders, and give them a heads up about the additional resources needed. Then, take the next steps to address the unanticipated problems and take advantage of the opportunities you identified by improving your plans, as well as allocating and reserving resources.

Finally, take note that there will be cases when you’ll need to go back and forth these steps to make improvements, (a fix here, an improvement there) so be comfortable with revisiting your strategy and reaching out to your list of experts.

Conclusion

A great way to deal with feelings of uncertainty during this pandemic is to anticipate obstacles with a good plan – and a sure road to that is practicing strategic thinking.

In the coming months and years, you’ll need to continue navigating uncharted territory so that you can lead your team to safe waters. Regularly doing these 8 steps to strategic thinking will ensure that you can prepare for and adapt  to the coming changes with increasing clarity, perspective, and efficiency.[2]

More on Thinking Smarter

Featured photo credit: JESHOOTS.COM via unsplash.com

Reference

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