As a Christmas present to myself I got a whiteboard video based on my post “Overcoming Subjectivity in Risk Management and Decision Making Requires a Culture of Quality and Excellence” from Lavinder through Fiverr. I want to experiment in the new year with more engaging ways of presenting some of my content, and I’m a huge fan of this style of video.
That chart can be a little daunting. I’m just going to mention three of the more common biases.
- Attribution bias: When we do something well, we tend to think it’s because of our own merit. When we do something poorly, we tend to believe it was due to external factors (e.g. other people’s actions). When it comes to other people, we tend to think the opposite – if they did something well, we consider them lucky, and if they did something poorly, we tend to think it’s due to their personality or lack of skills.
- Confirmation bias: The tendency to seek out evidence that supports decisions and positions we’ve already embraced – regardless of whether the information is true – and putting less weight on facts that contradict them.
- Hindsight bias: The tendency to believe an event was predictable or preventable when looking at the sequence of events in hindsight. This can result in oversimplification of cause and effect and an exaggerated view that a person involved with an event could’ve prevented it. They didn’t know the outcome like you do now and likely couldn’t have predicted it with the information available at the time.
A few ways to address our biases include:
- Bouncing ideas off of others, especially those not involved in the discussion or decision.
- Surround yourself with a diverse group of people and do not be afraid to consider dissenting views. Actively listen.
- Imagine yourself in other’s shoes.
- Be mindful of your internal environment. If you’re struggling with a decision, take a moment to breathe. Don’t make decisions tired, hungry or stressed.
- Consider who is impacted by your decision (or lack of decision). Sometimes, looking at how others will be impacted by a given decision will help to clarify the decision for you.
The advantage of focusing on decision quality is that we have a process that allows us to ensure we are doing the right things consistently. By building mindfulness we can strive for good decisions, reducing subjectivity and effective problem-solving.
Risk assessments, problem solving and making good decisions need teams, but any team has challenges in group think it must overcome. Ensuring your facilitators, team leaders and sponsors are aware and trained on these biases will help lead to deal with subjectivity, understand uncertainty and drive to better outcomes. But no matter how much work you do there, it won’t make enough of a difference until you’ve built a culture of quality and excellence.
Bias Toward Fitting In
We have a natural desire to want to fit in. This tendency leads to two challenges:
Challenge #1: Believing we need to conform. Early in life, we realize that there are tangible benefits to be gained from following social and organizational norms and rules. As a result, we make a significant effort to learn and adhere to written and unwritten codes of behavior at work. But here’s the catch: Doing so limits what we bring to the organization.
Challenge #2: Failure to use one’s strengths. When employees conform to what they think the organization wants, they are less likely to be themselves and to draw on their strengths. When people feel free to stand apart from the crowd, they can exercise their signature strengths (such as curiosity, love for learning, and perseverance), identify opportunities for improvement, and suggest ways to exploit them. But all too often, individuals are afraid of rocking the boat.
We need to use several methods to combat the bias toward fitting in. These need to start at the cultural level. Risk management, problem solving and decision making only overcome biases when embedded in a wider, effective culture.
Encourage people to cultivate their strengths. To motivate and support employees, some companies allow them to spend a certain portion of their time doing work of their own choosing. Although this is a great idea, we need to build our organization to help individuals apply their strengths every day as a normal part of their jobs.
Managers need to help individuals identify and develop their fortes—and not just by discussing them in annual performance reviews. Annual performance reviews are horribly ineffective. Just by using “appreciation jolt”, positive feedback., can start to improve the culture. It’s particularly potent when friends, family, mentors, and coworkers share stories about how the person excels. These stories trigger positive emotions, cause us to realize the impact that we have on others, and make us more likely to continue capitalizing on our signature strengths rather than just trying to fit in.
Managers should ask themselves the following questions: Do I know what my employees’ talents and passions are? Am I talking to them about what they do well and where they can improve? Do our goals and objectives include making maximum use of employees’ strengths?
Increase awareness and engage workers. If people don’t see an issue, you can’t expect them to speak up about it.
Model good behavior. Employees take their cues from the managers who lead them.
Bias Toward Experts
Challenge #1: An overly narrow view of expertise. Organizations tend to define “expert” too narrowly, relying on indicators such as titles, degrees, and years of experience. However, experience is a multidimensional construct. Different types of experience—including time spent on the front line, with a customer or working with particular people—contribute to understanding a problem in detail and creating a solution.
A bias toward experts can also lead people to misunderstand the potential drawbacks that come with increased time and practice in the job. Though experience improves efficiency and effectiveness, it can also make people more resistant to change and more likely to dismiss information that conflicts with their views.
Challenge #2: Inadequate frontline involvement. Frontline employees—the people directly involved in creating, selling, delivering, and servicing offerings and interacting with customers—are frequently in the best position to spot and solve problems. Too often, though, they aren’t empowered to do so.
The following tactics can help organizations overcome weaknesses of the expert bias.
Encourage workers to own problems that affect them. Make sure that your organization is adhering to the principle that the person who experiences a problem should fix it when and where it occurs. This prevents workers from relying too heavily on experts and helps them avoid making the same mistakes again. Tackling the problem immediately, when the relevant information is still fresh, increases the chances that it will be successfully resolved. Build a culture rich with problem-solving and risk management skills and behaviors.
Give workers different kinds of experience. Recognize that both doing the same task repeatedly (“specialized experience”) and switching between different tasks (“varied experience”) have benefits. Yes, Over the course of a single day, a specialized approach is usually fastest. But over time, switching activities across days promotes learning and kept workers more engaged. Both specialization and variety are important to continuous learning.
Empower employees to use their experience. Organizations should aggressively seek to identify and remove barriers that prevent individuals from using their expertise. Solving the customer’s problems in innovative, value-creating ways—not navigating organizational impediments— should be the challenging part of one’s job.
In short we need to build the capability to leverage all level of experts, and not just a few in their ivory tower.
These two biases can be overcome and through that we can start building the mindsets to deal effectively with subjectivity and uncertainty. Going further, build the following as part of our team activities as sort of a quality control checklist:
- Check for self-interest bias
- Check for the affect heuristic. Has the team fallen in love with its own output?
- Check for group think. Were dissenting views explored adequately?
- Check for saliency bias. Is this routed in past successes?
- Check for confirmation bias.
- Check for availability bias
- Check for anchoring bias
- Check for halo effect
- Check for sunk cost fallacy and endowment effect
- Check for overconfidence, planning fallacy, optimistic biases, competitor neglect
- Check for disaster neglect. Have the team conduct a post-mortem: Imagine that the worst has happened and develop a story about its causes.
- Check for loss aversion
Risk assessments have a core of the subjective to them, frequently including assumptions about the nature of the hazard, possible exposure pathways, and judgments for the likelihood that alternative risk scenarios might occur. Gaps in the data and information about hazards, uncertainty about the most likely projection of risk, and incomplete understanding of possible scenarios contribute to uncertainties in risk assessment and risk management. You can go even further and say that risk is socially constructed, and that risk is at once both objectively verifiable and what we perceive or feel it to be. Then again, the same can be said of most of science.
Risk is a future chance of loss given exposure to a hazard. Risk estimates, or qualitative ratings of risk, are necessarily projections of future consequences. Thus, the true probability of the risk event and its consequences cannot be known in advance. This creates a need for subjective judgments to fill-in information about an uncertain future. In this way risk management is rightly seen as a form of decision analysis, a form of making decisions against uncertainty.
Everyone has a mental picture of risk, but the formal mathematics of risk analysis are inaccessible to most, relying on probability theory with two major schools of thought: the frequency school and the subjective probability school. The frequency school says probability is based on a count of the number of successes divided by total number of trials. Uncertainty that is ready characterized using frequentist probability methods is “aleatory” – due to randomness (or random sampling in practice). Frequentist methods give an estimate of “measured” uncertainty; however, it is arguably trapped in the past because it does not lend itself to easily to predicting future successes.
In risk management we tend to measure uncertainty with a combination of frequentist and subjectivist probability distributions. For example, a manufacturing process risk assessment might begin with classical statistical control data and analyses. But projecting the risks from a process change might call for expert judgments of e.g. possible failure modes and the probability that failures might occur during a defined period. The risk assessor(s) bring prior expert knowledge and, if we are lucky, some prior data, and start to focus the target of the risk decision using subjective judgments of probabilities.
Some have argued that a failure to formally control subjectivity — in relation to probability judgments – is the failure of risk management. This was an argument that some made during WCQI, for example. Subjectivity cannot be eliminated nor is it an inherent limitation. Rather, the “problem with subjectivity” more precisely concerns two elements:
- A failure to recognize where and when subjectivity enters and might create problems in risk assessment and risk-based decision making; and
- A failure to implement controls on subjectivity where it is known to occur.
Risk is about the chance of adverse outcomes of events that are yet to occur, subjective judgments of one form or another will always be required in both risk assessment and risk management decision-making.
We control subjectivity in risk management by:
- Raising awareness of where/when subjective judgments of probability occur in risk assessment and risk management
- Identifying heuristics and biases where they occur
- Improving the understanding of probability among the team and individual experts
- Calibrating experts individually
- Applying knowledge from formal expert elicitation
- Use expert group facilitation when group probability judgments are sought
Each one of these is it’s own, future, post.