Three Ways To Avoid Bias In Decision-Making

We are all biased. Our brains were designed to be. We categorize information to store it, which means we have to make judgments. Those judgments rely on our past experiences, which, in turn shape our perspectives. They help us figure out what is safe (generally, what is known) versus where to be cautious (generally, what is unknown). So, bias always plays a role in decisions.

Here’s an example of one type of bias, risk aversion, at work: We believe every day (and in most strategy meetings) that because our current business model seemed to work yesterday, it would be risky to change it today. In other words, risk aversion tilts us toward keeping the status quo, assuming that the future will look like the past. Given what we’ve seen in 2020, is that a safe assumption to make? Or do we need to re-think the role our biases have played in our decision-making?

Bias is not something we can easily avoid or stop. It is, however, something we can keep in check – and use to our advantage to make better decisions. Here are three techniques you can use to try and be thoughtful and open, keeping at least some bias out of the equation. 

1. Decision Quality

In the book “Decision Quality,” Carl Spetzler and colleagues put together a six-piece framework that helps companies address the pros and cons before making a decision. The approach starts by (1) ensuring that the problem is framed effectively for the decision to be made. The objective is then (2) to evaluate a set of possible options (3) using valuable and “reliable” information (4) across an agreed set of metrics or variables (5) to see which alternative is the most favorable. Then, (6) agree on (and commit to) a path forward.

For data-driven organizations, where objective metrics can be used, decision quality is great. But, when the data are qualitative or subjective, it runs the risk of leaning toward the better story (or the more likeable storyteller), not necessarily the better evidence. Bias is always present.

2. Hypothesis Testing

If you’ve ever taken a statistics class (or were taught the scientific method), you’ve heard about hypothesis testing. Essentially, it involves making a prediction (or an assumption) about what is going to happen, collecting unbiased information to prove or disprove it, and then evaluating whether or not the information supports the prediction.

Businesses use hypothesis testing as well whenever they vet an investment or fund a business, for example. We predict what revenues will be based on market trends and past company performance, we predict what the expenses will be based on what we can find out about supply, production and distribution costs, and we evaluate if we should pursue it by looking at metrics like return on investment.

But hypothesis testing can still be biased. Was it the evidence or the story that was more compelling? If an executive has a bias going in, will she be more likely to change her mind in light of new evidence or will she explain that evidence away to fit how she sees the world?

Avoiding bias is as much about the effort you make to become aware of where your biases are as the techniques you use to try and prevent them.

3. The Five Why’s

The five why’s aim to uncover biases in decision-making by boiling everything down to the essentials – in operations, it’s called root cause; in marketing, the core message; in sales, the pitch, in product development, the MVP, etc. Asking why helps break the problem down into only the essential pieces. Those are the key differentiators that make it easier to make those decisions. If you are the one with the ask, the clarity gained from asking the five why’s before presenting the information to the decision-maker makes the communication more concise and compelling. If you are the decision-maker, by the time you get to the last why, it should be clear what is really needed and if the recommended approach will get there.

But there is an important note of caution: Why is only one of the questions that need to be asked before a decision is made. Biases are likely embedded in each of the answers, so knowing where to challenge or probe will help test if the recommendation is sound.

Avoiding Bias Means Becoming Open and Aware

These days, we are all learning that we have biases, even if we thought we did not. The best way to learn from those biases is to push ourselves: to continue to notice where we might fall into our “prior-way-of-thinking” traps, then look for opportunities to invite new perspectives, and challenge our ideas. These structural tools are one approach that can help – especially when biased-thinking (a.k.a. “old ways”) is prevalent in an organization and new approaches are needed. But truly building your awareness to make fact-based decisions with a clear mind is something you build from within, through belief, mindfulness, and other techniques. It requires you to take notice of what you and others are doing, and what the impacts of those gestures, postures, words, and decisions are. The decision to do something differently then is all yours.