By Eva Andrijcic
Assistant Professor
Engineering Management
Cognitive biases that impact your team’s performance
Psychologist Daniel Kahneman’s 2011 book “Thinking, Fast and Slow” has become the favorite of many of us who are interested in how cognitive biases impact our ability to make decisions, especially under constrained and uncertain conditions [1, 2]. According to Kahneman, cognitive heuristics are mental shortcuts that allow us to simplify our complex thought processes and come to a decision faster and with less mental investment. Cognitive biases are the resulting effects of taking such shortcuts. It may be surprising to learn that cognitive biases are not always bad, but they often lead to poor decision making. Research has shown both laypeople and experts are prone to using them. Why do we use them, you may wonder, when many of us have been trained to carefully process data and information, clearly state and test our assumptions, and consider problems from a holistic perspective?
Kahneman (who has won a Nobel Memorial Prize in Economics) and his collaborator Amos Tversky (now deceased; had been a psychologist) hypothesized and proved that people unconsciously employ a variety of cognitive heuristics in specific situations:
- When they have too much information to process, or conflicting information;
- When they lack meaning/context;
- When they have to operate under time constraints;
- Or because they don’t have enough mental capacity to process all information.
Consequently, humans remember “representative” examples and extremes, they generalize, make assumptions, and create patterns, all of which allows them to make decisions faster. While, from an evolutionary perspective, this ability to react fast was needed for the human species to survive, it often causes us to make sub-optimal decisions which can have significant strategic implications.
When people learn about cognitive biases, their typical response is, “Yes, I know others are prone to these biases, but I am not, or not to the same degree,” which is a bias in itself (blind spot bias). In fact, most biases occur subconsciously so people don’t even know that they are using them, unless they have been trained to notice them.
A few months ago, while teaching a professional development seminar on cognitive biases to graduate students and working professionals, I decided to illustrate the degree to which we all (even experts!) fall prey to these cognitive biases.
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