Human- Biases- In- Organisations.

20 10 2017

I find that when you open the door toward openness and transparency, a lot of people will follow you through.   Kirsten Gillibrand

“The more people can see what is happening – the good, the bad, the ugly – the more effective they are at deciding the appropriate ways of handling things”. (Ray Dalio)

Let’s take a look at one of many definitions of the meaning of bias; “A particular tendency, trend, inclination, feeling, or opinion, especially one that is preconceived or unreasoned: illegal bias against older job applicants; the magazines bias toward art rather than photography; our strong bias in favour of the idea”.

Bridgewater Associates founded by Ray Dalio in 1975, is the largest hedge fund in the world. Dalio’s philosophy consists of radical transparency into the company.

Dalio, got reactions from three of his top confidants that he was hurting the company by being too honest. His action to resolve this problem was to meet employees individually and find a solution through discussions on how to treat one another. His goal was to create a culture of sharing ideas without creating lasting conflict, as well as engaging employees in thoughtful disagreements.  From this article in Harvard Business Review; “Radical Transparency Can Reduce Bias – but Only If It’s Done Right, Francesca Gino is a professor at Harvard Business School, she gives us some examples through Dalio’s ideas and believes in openness and transparency.

Francesca refers to Dalio where he says; “I think the greatest tragedy of mankind is that people have ideas and opinions in their heads but don’t have a process for properly examining these ideas to find out what’s true. That creates a world of distortions. That’s relevant to what we do, and I think it’s relevant to all decision making. So when I say I believe in radical truth and radical transparency, all I mean is we take things that ordinarily people would hide and we put them on the the table, particularly mistakes, problems, and weaknesses. We put those on the table, and we look at them together. We don’t hide them.”

Here another interesting article; Outsmart Your Own Biases (Jack B. Soll, Katherine L. Milkman, and John W. Payne, Harvard Business Review). The authors gives us theirs view on biases and it’s challenges. “We are all susceptible to such biases, especially when we’re fatigued, stressed, or multitasking. Just think of a CEO who’s negotiating a merger while also under pressure from lawyers to decide on a plant closing from colleagues to manage layoffs. In situations like this, we’re mentally, emotionally, and physically spent. We cope by relying even more heavily on intuitive, system 1 judgements and less on careful reasoning. Decision making becomes faster and simpler, but quality often suffers”.

Let us take a closer look at the meaning of system 1 and system 2 thinking:

System 1 thinking; are associated with automatic judgements which stem from associations stored in our memories, you can choose to work logically with the information available. The authors makes us aware of the importance of system 1 thinking in critical situations and for surviving- “It’s what makes you swerve to avoid a car accident”. Authors; “But as psychologist Daniel Kahneman has shown, it’s also a common source of bias that can result in poor decision making, because our intuitions frequently lead us astray”.

System 2 thinking; “essentially, deliberate reasoning gone awry. Here the authors are talking about cognitive limitations, and an example of limitations can be laziness, and people may focus on the wrong things as well as failing to seek out relevant information”.

In Francesca’s article where she say that scientific evidence confirms Dalio’s belief ; “as human beings, we tend to evaluate information in a biased manner. For instance, we often fall prey to what psychologists and decision researchers call-confirmation bias: “the tendency to focus on evidence that confirms our beliefs and assumptions rather than looking for data that contradicts it”.

Francesca, says that such biases weakens our judgements as well as decisions.

When confronted with our biases, we have difficulties to listen to peoples feedback and learning from it, especially when it’s inconsistent with the way we view ourselves at work. Francesca; “We tend to strengthen bonds only with people who see our positive qualities. Why ? When others provide evidence that is inconsistent with how we view ourselves or our ideas, we find that information threatening. Our natural reaction is to remove the threat-which can mean dislocating from the source of the information”.

In the other article the authors talk about risk taking and says; “Because most of us tend to be highly overconfident in our estimates, it’s important to ‘nudge’ ourselves to allow for risk and uncertainty”.

Further on Jack. Soll, Katherine L. Milkman, and John W. Payne suggests three methods that are especially useful; Make three estimates, use premortems and take on outside view:

The three methods in short.

The problem; Cognitive biases muddy our decision making. We rely too heavily on intuitive, automatic judgements, and even when we try to use reason, our logic is often lazy or flawed”.

The causes; “Instead of explaining risks and uncertainties, we seek closure-it’s much easier. This narrows our thinking about what could happen in the future, what our goals are, and how we might achieve them”.

The solution; “By knowing which biases tend to trip us up and using certain tricks and tools to outsmart them, we can broaden our thinking and make better choices”.

These three methods are useful and keeps you going in the right direction if wisely used.

Francesca says; “Through radical transparency, Dalio has encouraged a culture where people know it’s important to challenge one another’s views, regardless of rank, and do so regularly”. Here the author tells us that this approach will work if people discuss their ideas openly, even if you have to tell someone about their mistakes. Francesca; ” When transparency unveils our universal human biases, we are more likely to benefit as individuals. Our organisations will benefit as well”.

Both of these interesting articles illustrates how to handle biases as well as giving great advice on how to handle challenging  situations.

“Even the smartest people exhibit biases in their judgements and choices. It’s foolhardy to think we can overcome them through sheer will. But we can anticipate and outsmart them by nudging ourselves in the right direction when it’s time to make a call”. (Jack B. Soll, Katherine L. Milkman and John P. Payne)

Honest communication is built on truth and integrity and upon respect of the one for the other     Benjamin E. Mays

Source; Harvard Business Review

Author, Inger Lise E Greger/Master of Science in Change Management

 

 





Winning Leaders Transform Organisation’s To Success

5 03 2016

Tell me and I forget. Teach me and I remember. Involve me and I learn.    Benjamin Franklin

Winning organisations has strong leaders who sees the potential in their peoples strength. A key-element is teaching. “The ultimate test of success for an organisation is not whether it can win today but whether it can keep winning tomorrow and the day after. Therefore, the ultimate test for a leader is not whether he or she makes smart decisions and takes decisive action, but whether he or she teaches others to be leaders and and builds an organisation that can sustain its success even when he or she is not around”. (Noel M. Tichy, The Leadership Engine, 2007)

Tichy, learns us how to practise our knowledge and share it with our colleagues to make them shine and become wise leaders. He tells us that that teaching and learning are inextricably interwoven aspects of leadership. Leaders who are eager to motivate employees are capable of getting things done through others by changing peoples mindsets which will lead and energise them to action. Tichy; “Successful leadership must accomplish this through ideas and values, not through coercion or Machiavellian manipulation.”

Winning organisations offer lots of management training programs as well as career development. However, the programs doesn’t cover the more critical leadership skills. Tichy, makes us aware that the essence of real leadership is to handle changing situations and to motivate others to act in an appropriate way. “Leadership reflects a persons mindset and his or her approach to the world. Even though these intangible qualities are extremely difficult to teach, winning organisations are remarkably successful at it. And that is because their most senior executives, their most proficient and talented leaders, as well as all of their front-line subordinates, are personally involved in the teaching “.

“Teaching is at the heart of leading.” Leading is not about commanding compliance and dictating people, and giving orders. The main goal for the leader is to make people see situations as they really are. People need to be aware of what kind of responsibility they need to take. When people know how to take responsibility, they will act in ways that lead to the best for the organisation. Tichy; “Whether it is teaching something as simple as what concrete tasks need to take precedence over others this week, or something complex as how to make good decisions, teaching is how ideas and values get transmitted. Therefore, in order to be a leader at any level of an organisation, a person must be a teacher. Simply put, if you aren’t teaching, you aren’t leading”.

In this interesting article: The Best Leaders Are Constant Learners (Harvard Business Review, author Kenneth Mikkelsen and Harold Jarche, 2015) makes us aware of the importance of being learners. Authors; “We live in a world that increasingly requires what psychologist Howard Gardner calls searchlight intelligence. That is, the ability to connect the dots between people and ideas, where others see no possible connection. An informed perspective is more important than ever in order to anticipate what comes next and succeed in emerging futures”. There are many digital tools today which makes it possible to help people to learn as well as share knowledge. “Tools are important, but mastery in a digital age is only achieved if you know how to establish trust, respect, and relevance in human networks”.

Mikkelsen and Jarche also talks about the importance of learning in changing society’s; “Reinvention and relevance in the 21st century instead draw on our ability to adjust our way of thinking, learning, doing and being. Leaders that stay on top of society’s changes do so by being receptive and able to learn. In a time where the half-life of any skill is about five years, leaders bear a responsibility to renew their perspective in order to secure the relevance of their organisation”. The authors say that we need leaders who offers learning as well as master fast learning themselves. “If work is learning and learning is the work, then leadership should be all about enabling learning”.

What is leadership?  It is a particular kind of decision-making-decisions a leader makes in guiding and motivating a group of people in responding to a group of people in responding to a particular set of circumstances. The circumstances may be immediate or they may be something the leader foresees in the future, but in either cases, there are choices to be made. ( My blog, What has the “Renewed Darwinian Theory” and The Four Drive Theory” to do with leadership ?)

Back to Mikkelsen and Jarche and their view on sensing; “Sense is how we personalise information and use it. Sensing includes reflection and putting into practise what we learn”. The authors makes us aware that this process is based on critical thinking based on weaving together our thoughts, experiences as well as impressions and feelings  where we make meaning of them. They suggest that by writing a blog post or writing down ideas we contextualize and reinforce our learning.

Francis P. Cholle has written the book; The Intuitive Compass. He illustrates how we can develop intuitive intelligence to navigate the natural tension that exists between reason and instinct. Cholle, describes four tenets of intuitive intelligence; thinking holistically, thinking paradoxically, noticing the unusual and leading by influence. Cholle; “By engaging in each, we can enrich our experience and understanding of personal and business issues that arise, and when we use all four, our capacity for innovation can grow tremendously”. (My blog, The intuitive leader)

Cholle, tells us that if we want to succeed in todays business world, leaders need to innovate, be open to embrace change and create new business approaches.

Noticing the unusual is one of the tenets and includes paying attention outwardly by seeing whats around us or we can pay attention inwardly by feeling whats inside us. We can choose to receive information in two ways, one of them is what makes logical sense, the other one is paying attention beyond the logical sense of what we can contemplate. (My blog, The intuitive leader)

In this article; 4 Ways to Become a Better Learner (Harvard Business Review by Monique Valcour,2015) the author talks about learning agility; “learning agility is the capacity for rapid, continuous learning from experiences. Agile learners are good at making connections across experiences and they’re able to let go of perspectives or approaches that are no longer useful- in other words, they can unlearn things when novel solutions are required. People with this mindset tend to be oriented toward learning goals and open to new experiences. They experiment, seek feedback, and reflect systematically”.

Many leaders are afraid of moving out of their comfort zone as well as missing out on key learning opportunities. In her article, Valcour talks about a research done by David Peterson (Director of executive coaching and leadership at Google)  which is based on steps to take to enhance your learning agility:

Ask for feedback. “Think of one or more people who interacted with you or observed your performance on a given task”. Make them aware of your interest in knowing how you did, and what you could improve for your next task.

Experiment with new approaches or behaviors. “To identify new behaviors for testing, Peterson recommends reflecting on a challenge you’re facing and asking yourself questions such as ‘What’s one thing I could do to change the outcome of the situation? And what will I do differently in the future’?

Look for connections across seemingly unrelated areas.

Peterson, suggest that we choose a domain we are good at and have expertise in, this domain has to be unrelated to your work. The key- element is to apply that knowledge to your current challenge. “Borrowing these principles, Peterson realized that he could extend his mastery of leadership development by seeking out a wide variety of leaders to coach, comparing leaders to each other on various qualities, and discussing leaders with other experts”.

Make time for reflection.

Reflecting on your work is important and boosts your learning significantly. Valcour; “To ensure continuous progress, get into the habit of asking yourself questions like ‘What have I learned from this experience’? and ‘What  turned out differently than I expected’?

Valcour, makes us aware that practicing these steps will help us to extract full learning from our experiences.

Let us take a look at Tichy’s thoughts about learning from experiences; “Winning leaders consciously think about their experiences . They roll them over in their minds, analyze them and draw lessons from them”. He makes us aware of how constantly leaders updates and refine their views as they get new knowledge and experiences. Tichy; “And they store them in the form of stories that they use not only to guide their own decisions and actions, but also to teach and lead others. When you hear leaders talk about their lives, you learn their teachable points of view”.

A leader is one who knows the way, goes the way, and shows the way.           John C. Maxwell

Author

Inger Lise E Greger, MSc in Change Management

https://inger-lise.net/page/2/

 

 

 

 

 

 








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