5 Biases That Lead to Bad Decisions (Part 3 of 4)

From the introduction: Each of us is susceptible to irrational behavior’s irresistible pull. Only when we gain insight into our irrationality can we see the extent to which it affects our work and personal lives. Fascinating patterns emerge, and we can master our behaviors and decisions when we connect the dots.

Value Attribution

It takes enormous energy to consciously work through all possibilities and risks when weighing important decisions, so the brain looks for shortcuts. We use unconscious routines, known as “heuristics,” to cope with complexity – and they normally serve us well.

But these shortcuts also present traps because they largely occur without our awareness. Value attribution serves as a quick mental shortcut to determine what’s worthy of our attention. When we encounter new objects, people or situations, the value we assign to them shapes our future perceptions of them.

If, for example, we see a poorly dressed street performer playing music in a subway station, we assume he’s a struggling amateur with little talent, even when the music is good. These assumptions were proved true when Joshua Bell, one of the finest violinists alive, participated in a field study for the Washington Post.

While Bell, dressed in jeans and a baseball cap, played a $3.5 million Stradivarius, subway travelers rushed by without paying attention. While he certainly sounded far from mediocre, he looked the part – and commuters attributed the value they perceived (appearances) to performance quality.

The Bell experiment illustrates why we may turn down a pitch or idea based on appearances, rumors or any other peripheral value. It also explains why we may blindly follow the advice of someone who has been highly recommended.

Our expectations change our reality, as the “placebo effect” demonstrates. Once a doctor or advertisement tells us a drug will relieve pain, the medication has a greater chance of working – even if it has no healing properties whatsoever.

Becoming aware of our brain’s tendency to make assumptions can help us prevent disastrous mistakes and missed opportunities.

Diagnosis Bias

When we encounter new people at a party, we quickly diagnose them by placing tags on them, such as “approachable” or “standoffish.” This helps us quickly decide if we want to engage them in conversation.

By employing this mental shortcut, we fail to see a person’s good qualities. Nowhere is this clearer than in job interviews.

A meta-analysis of data found there is little correlation between unstructured job interview success and job performance in new hires. The marks given to job candidates after a first date-type interview have little to do with how well those hired will actually perform on the job.

Nonetheless, companies are drawn to this interview format. Managers form impressions by asking questions they hope will ensure a person is a good fit:

• Does this candidate share my interests?
• How’s the chemistry between us?
• Is there a connection?

Managers value their intuition and think they have a refined ability to truly see and understand an applicant. They overestimate their ability to form objective opinions and underestimate their subconscious’ biases.

Managers should, instead, forego unstructured interviews and focus on a candidate’s past experience and responses to hypothetical scenarios.

This blog post was part 3 of 4.  If you would like to read from the beginning, click here.   Bookmark us and come back tomorrow for the conclusion!