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How to Avoid Confirmation Bias in the C-Suite

April 28, 2021    |     5-minute read (910 words)

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. 

Signs your board has a confirmation bias problem:

    1. The board of directors have seemingly arrived at a conclusion before discussing a subject.
    2. No matter what the subject is, the same director has the final word.
    3. The leadership team uses analogies of their past experiences or beliefs as support for their decisions rather than facts, evidence and insights.
    4. A similar thought process is evident among the board members. They seem to have parallel views and experiences. 
    5. During meetings, directors engage in conversations among themselves than sharing their views with the entire team.
    6. Members exhibit a lack of attention toward potential uncertainties or crises when a new product, initiative, deal, plan or strategy is outlined.
    7. Concerns aren’t shared out loud. Instead, they are set aside for an executive session in which the lead director is expected to relay the problems to the CEO.
    8. The group has no discussions about the low performance level of the management teams or about a possible change of leadership to address such issues.
    9. The board repeatedly defers the views of the authoritative figure in the company.

Tips to mitigate confirmation bias:

  1. Appoint a director who will contest the board’s preconceived philosophies and beliefs. At times, a person from an entirely different industry background can offer a new perspective to existing problems and find gaps that might have flown under the radar.
  2. To ensure every member of the board has the right to voice their opinion, all the members should solicit views from one another.
  3. Re-present business plans and strategies that were previously dismissed by the board. Important elements might have been overlooked.
  4. To avoid dependency on one director’s expertise and experience, education opportunities in dedicated areas should be offered to the board.
  5. Hiring a third-party advisor is recommended to present opinions for and against a key business strategic move.
  6. Ask leadership to hold back their ideas until the discussion ends. On the other hand, if the same person has the final word during every discussion, they should be the one to present their idea first.
  7. Theoretical nonconforming views should be exchanged in turns, as it could alter the shape of the dialogue.
  8. Ensure internal support teams provide you with robust, data-based trials to the prevailing view.
  9. Request that each director propose their ideas at the beginning of the discussion or ask them to share key points that weren’t discussed at the end.
  10. People from varied backgrounds and roles should be considered for the board.

Recap: 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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