Every decision starts with a belief. That is, we base our decisions on what we know to be true—what we believe. Sometimes, however, we believe something that isn’t true. Intellectually and emotionally, beliefs and unconscious bias influence our behavior when facts and reason alone do not. Our early relationships, experiences, and events create and control our belief systems. When we fail to examine our beliefs and bring them to the conscious level, we risk continuing to base decisions on false or inaccurate inputs.
In most organizations, leaders give considerable thought to espoused values. These values may appear on a plaque in the foyer or on a mouse pad. However, successful leaders also model them. Values play an important role in forming an organization’s culture. Senior leaders agree that “This is the way we do things around here.”
Unconscious assumptions remain more mysterious, lying below the surface, undetected but ready to influence outcomes. In damaged organizations, unconscious biases commonly contradict the espoused values, confusing within and without the company. They also engender mistrust, suspicion, and, eventually, the loss of customers and star performers.
Biases come in all kinds of shapes and sizes. The Dunning-Kruger Effect causes people with low ability to overestimate themselves. Outcome bias describes the tendency to over-value the results of a decision and under-value its quality. It arises when leaders base a decision on previous events’ outcome, without regard to how the past events developed.
Impact of Unconscious Bias
We shouldn’t confuse outcome bias with hindsight bias. Hindsight bias, also known as the I–knew-it-all-along phenomenon, refers to the common tendency to perceive past events as having been more predictable than they were. Unlike hindsight bias, outcome bias does not involve the distortion of past events.
Failing to seek disconfirming information often leads to yet another problem, confirmation bias. The tendency to search for, interpret, and recall facts that support previously held beliefs causes us to remember information selectively, leading us to interpret it subjectively.
Heuristics, our mental shortcuts, can reduce the burden of decision-making and free up cognitive resources. They can also prove costly. They may cause us to miss critical information or act on unfair biases. When we don’t discipline ourselves to hear differing opinions and consider alternatives conscientiously, we act impulsively. We make rash decisions or fail to take appropriate risks. These actions compromise innovation and growth, putting us on the path to bad habits.
High-stakes decisions demand that we close the gap between what we say and what we do—the intersection of what we believe and how we behave. When we complete this gap, we can begin to understand how our unconscious beliefs create biases. This helps us to understand better how that shapes our world view—and our mindset.
Sometimes we remain aware of our biases but allow them to influence our decision-making. At least we know we’re out on a limb when we do this. Other times, however, biases lurk around in our unconsciousness, causing us to make decisions based on flawed data. Until we drag these preconceptions into our conscious decision-making, we put good sense at risk. When we actively examine our attitudes, biases, beliefs, and values, we give others a reason to trust us. We also count on ourselves more too.