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April 28, 2021
Every individual has biases that help them sort information and make decisions. But particularly when individuals are in a group setting, biases can be the root cause behind overvaluing or undervaluing certain ideas or people, and they can impact the way you judge yourself and others.
As an example of a group setting, unsurprisingly the corporate boardroom can be riddled with biases, namely authority bias, groupthink bias, status quo bias and confirmation bias. But the latter is the most pervasive. Confirmation bias is described as the underlying tendency to focus on and give greater credence to opinions that fit with one’s own existing views.
By definition, confirmation bias is one type of cognitive bias in which people have the innate tendency to look for references and information that support their preconceptions or beliefs and to reject any conflicting ideas, evidence or data. Because it influences the way people collect and interpret information, confirmation bias can lead to poor decision-making and errors.
A company board typically comprises a diverse group of accomplished high-fliers and strategic thinkers. But like many groups, most boards face confirmation biases that prevent them from achieving a strong, healthy culture. This can lead to behaviors in the group such as the dismissal of others’ opinions, interrupted discussions, side conversations, authoritative directors and members who hold back from sharing their ideas. This in turn alters decision-making, which then affects the fabric of the business. To mitigate the effects of confirmation bias and foster a good board culture, directors should gain an understanding of the problematic dynamics by considering provocative questions, such as which subject gets deemed important and which disregarded, whose opinion is taken into consideration and whose opinions disregarded, and who has the last word and why.
Entrepreneurs tend to be highly susceptible to confirmation bias as they simultaneously hyper-task and make key decisions. And when a founder presents a self-proclaimed “genius idea” and instructs the team to conduct corresponding research, they are more likely than not to have a positive outcome and endorse the idea. Under the theory of confirmation bias, the team members are holding to what they want to listen to, dismissing facts that don’t fit and giving greater credence to the facts that do.
Similarly, confirmation bias can lead to overoptimism in the result that the directors are mulling. If the business witnessed an upward growth curve in the past, the board may expect it to continue and overestimate the data that supports their position. It is important to note that confirmation bias can also work the other way by creating skepticism.
As a business leader, confirmation bias can be an insidious problem that prevents goals from being achieved. Learn to address and counter the cognitive mechanisms that underpin confirmation bias, and do not let your guard down. Discussions should be held about finding the right solution rather than defending an existing belief, encouraging people to share conflicting opinions, and asking them to reconsider their preferred hypothesis.
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