Understanding how cognitive biases affect us in the workplace

This article originally appeared on the Range Blog.

Our brains are energy hungry and responsible for processing huge amounts of data. As such, they are constantly looking for shortcuts. They seek heuristics and abstractions to speed up decision making and reduce the amount of energy spent thinking.

Most of the time these heuristics are useful and the reason we’re able to get on with our daily lives. But when they break down, they lead to irrationality, a distorted perspective on reality, and inaccurate judgement.

Even the smartest people are susceptible to faulty thinking.

There are dozens of well-known mental shortcuts that regularly trip us up; these are collectively referred to as cognitive biases. In the workplace, they affect how we interact with colleagues, how we make decisions, and who we reward and recognize.

In this article, we’ll take a look at eleven cognitive biases that affect team coordination and culture in the workplace every day.

How cognitive bias hinders collaboration

Dunning-Kruger Effect

The Dunning-Kruger Effect is a cognitive bias which causes people to believe they are much more competent than they really are, especially in domains where they have little or no actual skill.

This pervades the workplace in a number of ways. The most obvious is when an under-performer is really convinced they are exceptional at what they do.

A more insidious expression of this bias is during cross-functional collaboration when members of one discipline perceive themselves as having equal or higher skill to someone in a specialized discipline. In Silicon Valley, where engineering is dominant, I’ve seen this occur when leaders underestimate the experience of marketers, user researchers, or business professionals.

Fundamental Attribution Error

Also known as Actor-Observer bias, this is your tendency to attribute your own actions to external causes while overemphasizing personality-based explanations for behaviors observed in others, instead of situational factors.

This can lead to unfair judgements of other people’s performance and motivations. When our colleagues err, miss deadlines, or are impolite, we see this as evidence of a character weakness. Whereas, when we commit an error, miss a deadline, or are slightly rude to someone, we defend ourselves as being overworked, stressed, or tired.

Ingroup bias

People tend to give preferential treatment to those who they perceive to be members of their own groups. In the workplace, this leads to inequity and unfairness at the individual level, and can sometimes lead to toxic silos at the group level.

Groups often form along functional boundaries, which can lead to a dynamic where product feels pitted against engineering, or sales and marketing feel at odds.

Reorienting cross-functional teams around a shared purpose or missions can help break down these walls. You can also look for ways to make your whole organization feel like the ingroup while focusing outgroup energy on an external threat.

Ingroup bias is also one of the reasons why building a diverse team alone isn’t enough, and why inclusion is an essential component in cultivating a healthy and high-performing team.

Next-in-line effect

We’ve talked before on this blog about how in-person standups are broken. One of the reasons is that when speaking in turn, you will experience diminished recall of those who spoke before you. This is related to your ability to lay down long-term memories before a performance and isn’t affected by anxiety levels.

Luckily, knowing about this bias, and consciously paying more attention to people speaking before you, can offset the effects.

Why decision making breaks down at work

Anchoring

Anchoring is the tendency to rely too heavily on an initial piece of information when making a decision. Salespeople know this and often use it to their advantage. It is common to offer a high price early on in a sales process that creates a focal point to frame future negotiations.

If you are facilitating a decision, or simply running a meeting, make sure you own the initial framing and set the stage, otherwise you risk being derailed by someone else (intentionally or accidentally) anchoring the group somewhere else.

IKEA Effect

It turns out people place more value on items they build themselves: you will value an IKEA table you assembled higher than a prebuilt table, regardless of the quality of the end result.

This bias can come up in a detrimental way when evaluating vendors vs. internally developed tools, or when comparing similar work done by two teams. But it can also be used to your advantage by providing customers ways to configure and customize your product.

Irrational escalation

Commonly known as the “sunk cost fallacy,” this bias causes people to justify increased investment in a decision based on the cumulative prior investment rather than an objective estimate of future value or worth.

This comes up all the time in a work context, whether deciding to continue to chase a prospective customer or finish a feature that turned out to be more complex than originally planned.

It’s a hard bias to overcome, but try to objectively weigh different paths as if you were starting from scratch. If necessary, bring in someone with no skin-in-the-game so they can help assess the situation impartially.

When writing Good To Great, Jim Collins’ team found that a key attribute of successful companies was their ability to stop doing things.

System justification

Humans are creatures of habit and generally change adverse. System justification theory refers to the phenomenon where individuals will prefer the status quo, even at the expense of individual and collective self-interest. In other words, they justify the overarching system as serving a greater good that must be correct, even if they are unhappy or underserved.

The consequences of feeling the need to legitimize the status quo are far reaching. It causes us to justify inequality, makes people resistant to change, and reinforces traditional power dynamics.

The effects of cognitive bias on leadership

Cognitive Dissonance

The theory of Cognitive Dissonance describes a condition of stress caused by conflicting ideas, values, beliefs or practices. Essentially, two or more opposing thoughts cause psychological discomfort.

This happens in the workplace when people are asked to support or execute work which is in conflict with their sense of right and wrong, training, ethics, or personal values.

In simple cases, it may manifest when someone is asked to take on a project without truly understanding why it is important. In more severe cases it may occur when people are forced to participate in performance review or hiring practices that they feel are ineffective or unfair.

Hot-Cold Empathy Gap

We’re all subject to visceral drives such as hunger, thirst, cravings, pain, and strong emotions. These drives affect our decision making and behavior. When responding to such drives we’re in what is called a “hot” state. The Empathy Gap bias reflects the difficulty of people in a “cold” state to understand what it’s like for someone to be in a hot state, and vice versa.

People in a hot state can’t fully understand how their behavior is being affected by their current conditions. They think their short-term needs reflect their general and long-term preferences. People in a cold state find it hard to picture themselves in a hot state and will underestimate the strength of visceral impulses.

Functional fixedness

This bias limits the use of an object to the way it is traditionally used. For example, you will only use a hammer as a hammer, even if you are in need of a paperweight.

This bias invades the workplace when people become defined by their function or their title. A product manager may bemoan having no designers on their team, while an engineer with a design background sits unutilized. Or an Executive Assistant might be tasked with finding an event planner while being more than capable of the task themselves.

Overcoming cognitive bias begins with mindfulness

All these biases are incredibly common and hard to avoid. Don’t feel too bad if you see yourself succumbing to them. But know that in the worst cases they can be the root cause of significant organizational dysfunctions and can lead to unfair treatment of people, can negatively affect relationships, and limit our ability to be productive.

There are no silver bullets, but being more mindful of your own psychology is a good first step. Teams can work to build a culture of trust, such that when these biases do emerge, there is a safe environment to respond and correct their effects.

Thanks for reading! You can find more articles on the Range Blog. Our mission is to help teams work better together. Learn more about Range

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11 ways our brains trip us up at work was originally published in Range on Medium, where people are continuing the conversation by highlighting and responding to this story.

A short primer on why complex systems require different ways of acting and making decisions

A few years ago, as I was managing a growing team, I set out to try and understand why traditional forms of management didn’t feel appropriate. I went deep on group dynamics, psychology, and human development theory, and started to piece together different parts of what felt like a very big puzzle.

Throughout my reading, the concept of complexity kept coming up. On the surface, it made sense: everything pertaining to the evolution of the human experience is tangled up in a web of cause-and-effect; resulting from — and leading to — increases in complexity.

Hunter-gatherer tribes became early civilizations, which became industrial nations, which then led to the network age. The internet, mobile networking, AI, automation, and increasingly distributed workforces, all contribute to the complexity of today’s workplaces.

So sure, the world is more complex; therefore it probably makes sense that we need to manage our organizations differently. But what does it actually mean for something to be more complex? And once we know we’re dealing with a complex system, what are the implications for how we should think and act? Is managing a team of 100 programmers in the 2010’s actually harder than running a 1,000 person factory in the mid-1900’s?

It was during a conversation with my friend Jordan Husney that the penny dropped. We had been discussing Spiral Dynamics and value-attracting memes (that’s another story) and contemplating how complexity is really a matter of perspective. Something that seems obvious to you, say how a combustion engine works, might seem complicated to me.

We discussed how much of management theory is based on 20th-century practices that were concerned primarily with efficiency and consistency; about making sense of systems, making the unknown known, and then optimizing the hell out of it. In these systems there are many moving parts and lots of variables, but with effort and analysis you can reason about them. You can create blueprints, schematics, or flow-charts.

In this networked era, where knowledge work is predominant and everything is interconnected, this way of viewing work is no longer possible. There are always going to be things that are unknowable. This is the root of what it means for a system to be complex.

“Complexity is a movement in time that is both knowable and unknowable. Uncertainty is a basic feature of all complex systems.” — Esko Kilpi

A framework for complexity

To better understand what this means in practice, I’ve found the Cynefin framework hugely helpful. The framework outlines contexts, or domains, that describe a “sense of place” from which a system can be perceived. By understanding your context and the nature of the system, you can better make sense of the available information and better understand how to make decisions.

The domains are obvious, complicated, complex, and chaotic.

Something that is obvious is deterministic and certain. 1 + 1 = 2. If I put a cup of water in the freezer, it will turn to ice. If I flick the light switch, the light goes on. In the obvious domain, solutions are well-known.

Complicated systems are harder to understand, but they are still knowable. A well-known set of inputs will produce consistent outputs. When you have to read your oven’s instruction manual to bake bread, that’s complicated. But so is a car or a nuclear power plant. In the complicated domain, experts rule and knowledge is power.

As we discussed above, complex systems are unknowable. You are dealing with probabilities and emergent characteristics. There are often an indefinite number of variables influencing what is happening and — if it is possible at all — cause-and-effect can only be determined in hindsight. Through experimentation and analysis, patterns may be observed which allow for predictions to become more accurate. The stock market, ecosystems, and human culture are all complex.

In chaotic systems, cause and effect are always unclear. Chaos is the realm of crisis and panic.

It’s all about your perspective

An important element of this framework is that it is concerned as much with your perspective of the system as the system itself. Something that seems obvious to you, might be complicated for me. Something complex to a novice becomes complicated to an expert. Therefore, movement between domains is possible, for better and for worse, based on the information and knowledge you have.

Imagine an old TV. If you hit the power button it turns on or off (obvious). As it gets older, something breaks and it starts to randomly turn off (chaotic). Through experimentation, you realize that propping it up on a book and hitting it on one side sometimes fixes the problem (complex). You find a schematic, take it apart, and find a loose wire (complicated).

To some extent, complexity can, therefore, be managed through the acquisition of knowledge, surfacing of new data, or by decomposing a system into constituent parts which are more easy to reason about.

Leading through complexity

Knowing where you and your team are is an important first step. Are you dealing with a complicated system, or — as is more likely — a complex or chaotic one?

Next, look to see where there is room for movement. Can you gather knowledge that reduces the complexity? Are there actions you can take which could surface variables that might make the unknown known? Can the problem space be decomposed, such that elements become more obvious?

But in the workplace, no matter what you do, you are dealing with people. And humans are inherently complex. Regardless of how much data you surface or how much knowledge you acquire there will always be unknowable elements that affect how people behave and perform: the interaction of personalities, goings-on in personal lives, macro-economic movements, political changes, etc. etc.

This is part of the reason industrial management tactics, which were concerned with prediction and control, are no longer as effective. As leaders, we need to accept there will always be uncertainty, and focus on building flexible teams that can experiment and learn, through increased transparency and cooperation.

Originally published on the Range Blog at www.range.co/blog.

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Understanding complexity was originally published in Range on Medium, where people are continuing the conversation by highlighting and responding to this story.