cognitive biases

June 21, 2022 •

10 min reading

Cognitive biases at work: Reducing their impact on team dynamics

Written by

A journey into the complexities of cognitive biases at work: knowing how to recognize them, their impact on teams and leaders, and how to best manage them. Understanding cognitive biases is crucial in building a healthy working culture and running a successful business, especially when it comes to hiring, talent retention and teamwork. 

What are cognitive biases?

A cognitive bias is a deviation that occurs in our thinking process that often leads us to make incorrect judgments which can lead to poor decision-making. But the question is, why do cognitive biases occur? The answer is because our brain has limitations in its processing capacity and doesn’t function like an algorithm. Whereas a computer can process seemingly endless amounts of data, a human brain is limited in the amount of information it can structurally process simultaneously. It simply can’t identify, process, analyze, understand, and visualize every single bit of information it is presented with in a systematic and rational way.

This information processing limitation of the brain is called ‘bounded rationality’ and this is what causes cognitive biases. Bounded rationality leads our brain to take mental shortcuts in the way it processes information. For instance, it may select, consciously or unconsciously, only some information it needs to make a judgment and/or take a decision, and leave out, consciously or unconsciously, other information. We make poor judgments and consequently take wrong decisions when they basing ourselves on limited information.


Team dynamics

Because these biases distort our judgment and decision-making processes, they can affect team dynamics in several ways. The first issue is what is called the ‘Dunning-Kruger effect’ – named after psychologists, David Dunning and Justin Kruger. This effect is the result of overconfidence biases.

“John” is a recent business school graduate who just joined your marketing team. You ask him to prepare a presentation. What you’re expecting is a thorough and granular analysis identifying the company’s competitors which evaluates their strategies to determine strengths and weaknesses relative to your company’s many brands. But here’s the pitfall: because you’ve done so many competitive analyses during your long career, you have mastered the art of doing them. But your brain has probably forgotten how difficult this task was when you were first asked to do it. With time and practice, you’ve become subconsciously confident that because you can do it, it shouldn’t be a big deal for John to do it too.

Here is the second pitfall: John, because he is a novice at such a task, is probably going to underestimate the amount of time and thinking it will take him to search for and compile all the relevant data needed for a thorough analysis. His lack of experience and technical knowledge weakens his judgment resulting in him underestimating not only the difficulty of finding the required information but also the amount of time it will take to create the presentation. Additionally, John may be blinded by his enthusiasm of wanting to agree to any task you ask him to accomplish, to show you that he can do it, and can deliver fast. Here, both the expert and the novice are overconfident.

There is a confidence gap – the under- and over-estimates on each side – in the minds of both novice and expert. The acute disappointment when the presentation is late and not what was expected leads to frustration in the team.EHL Degree Programs  Which Master in Hospitality is right for you?  Discover which Master in Hospitality at EHL fits you best. It will only take  the time it would to make yourself a coffee  Start the quiz

How to overcome Dunning-Kruger effect

First, it's important for you to clarify to John what the objective of the task is. Explicitly highlighting these objectives from our example – what competitors are doing, why and where they are doing it, how this is potentially going to endanger the business of the company – will help the novice understand the task’s complexity. You may also want to provide John with a sample of some of your previous competitive analysis presentations.

Second, as the marketing team’s expert, you need to set quality criteria John must follow. For instance, explain: “I want pie charts, I want percentages, I want you to analyze each competitor and the danger their brands represent for our company. I want you to analyze each segment of the market. I want you to analyze each type of product per segment. Please be precise and granular in all the data and information in the presentation."

You need to break down the problem into constituent parts. This raises the novice’s awareness that it’s not easy. Whenever the novice needs information, the expert should be able to provide concrete examples, e.g., data, facts, and experiences that reduce both ambiguity and the novice’s blindness. Basically, what you’re doing here is tearing down the novice’s natural tendency to underestimate the complexity of the task and becoming overconfident; you are showing him it’s not as easy as he thinks.


Cognitive biases and feedback

The process of giving and receiving of feedback is a good example where we can become victims of cognitive biases. It is a key responsibility of a team leader to give regular feedback to team members. Yet, most of us find it hard to give concrete feedback: we don't want to seem like a micromanager or to hurt others’ feelings. Most of us want to be liked by others. One reason we want to be liked is because we fear being ‘thrown out of our own tribe’ – using an anthropological metaphor. Secretly, most of us crave social approval and we will do just about anything that is in our power to get it. This craving for social acceptance stems from a natural human tendency called the desire for social acceptance bias. We want to be socially accepted by our tribe, because being disliked potentially means that your teammates will end up rejecting you from the team. As leader, you don’t want your position in the team to be endangered, so being liked by your team members is a defense mechanism that prevents rejection.

As a team leader, also be aware that your team members feel uncomfortable at the idea of you giving them feedback. This will often cause them to mentally put themselves into automatic defensive mode even before the feedback session has begun. The reason why it is difficult for members to receive feedback from you - their boss - is because of their desire for social acceptance, which causes them, or ‘biases them’ to defend themselves from anything you say that they may judge endangers their status in the team. They want you to appreciate their work, they fear you may reject them as an individual or for their abilities.


Giving and receiving feedback 

The idea is to reduce any fear of rejection by giving well-structured feedback. The first rule is to be ‘facts & data driven’ rather than ‘personality driven’. Your team member will immediately feel reassured that you are not attacking them personally but, by basing yourself on verifiable facts and data, that you are interested in talking about their actions and consequences. As the feedback giver, this will emotionally disconnect you from the discomfort of providing feedback and will reduce your fear of being disliked.

As in my earlier example, let's suppose that John sends the presentation 24 hours late. Most managers will respond with “You’re unprofessional! You always send things late!” A better response would be “John, I see the presentation is 24 hours late” – here the emphasis is on the delay – the action – rather than John himself. This makes him more comfortable and less defensive. It also invites John to explain the delay.

Second, the team leader should explain to team members how their behaviors/actions impact other team members. Another way to tackle the delay example would be to say, “John, it's important that you deliver the presentation on time, because if you don't, it impacts the other team members who need this information to be able to launch the product in the market.” Again, you disconnect it from the individual’s personality but connect it to the outcome of their behaviors. Both sides are less defensive. You can go further by saying, “John, I would like you to deliver on time. Please feel free to approach me or shoot me an email whenever you have a question about the presentation so that I can provide you with the necessary information or ask other people to help.” The critical point here is that you can't ask somebody to change their behavior if you are not willing to help that person to do it. Otherwise, you are sending contradictory messages.


Dealing with performance assessments

How should team leaders fairly assess team members’ performance? It is very easy to subconsciously take data and make high level conclusions about an individual’s performance. Often we don't base ourselves on objective criteria to measure performance but, instead, base our conclusions on a team member's personality and water cooler gossip. This is one of the worst things that a leader can do.

Say you overhear someone saying that a customer complained about John. You have two possibilities: either you record that information in your brain and then you build a conclusion that ‘John is not a professional person. He’s sloppy. I'm not surprised that he got a complaint.’ Then another team member, Jack, tells you that John is not being collaborative. You add this to the first piece and mentally build a case against John. Alternatively to your mental record, you can ask yourself "Why did John receive a complaint? Why was John not being collaborative?"

A leader should go on a fact-finding tour to find out more by asking other people if John is collaborative or why there was a customer complaint. By asking these questions, you are looking for facts that will explain why these things happened rather than just concluding that John is unprofessional. To assess daily performance on a heathy basis, you need to be willing to discover the facts, not just base your assessment on third party gossip and individual comments.


Inferring without facts

Inferring things about people without facts stems from a bias known as attribution theory. You would be surprised how many senior managers fall into this trap. Attribution theory is where you base everything on the individual’s personality. All these layers of issues pile up into what I call the toxic Big Mac – lots of layers – e.g., "Jack is always late, he never delivers on time, he received a customer complaint, he delivered a presentation too late, he doesn't dress properly, people don't like him." Okay, maybe some of this could be true, but before you embark on a fact-finding data tour, you should not infer anything. It's toxic, because the more you compile this information, the more you're going to build up a bad image of the personality of the person and the worse the relationship becomes with your team member. This is because of attribution theory but also because of another bias called confirmation bias.

The confirmation bias trap is where the more you become convinced that somebody is not competent, the more you're going to look for examples that confirm that he or she is not professional. When you are in this trap, as you are on your fact-finding trip, you look for information and examples that will confirm your biases. By building a case based on confirmation biases, you are falling into the bias trap known as the self-fulfilling prophecy. Because you are so convinced that John is unprofessional, you start treating John as an unprofessional person, and he eventually becomes someone who's likely to be rejected for promotion or development or may even be fired. John may simply give up trying as it has become a vicious circle.


Creating trackable processes

When you see biases happening, as a team leader, you have the responsibility to go back to John’s quarterly or annual objectives and review his performance tracking roadmap. What you need to do is write down all the data, information and facts that you have collected about John’s behavior – true data and true facts, not just corridor rumors. Then you invite John for a friendly talk, and you present these areas of improvement to him. This is a part of self-awareness. It's not about throwing these things into John's face. It's about sending a first email saying, “Listen, I would like to discuss various points with you.” You sit down, you talk, and you explain what's been discussed and go over the feedback.

It is vital that you create these trackable systems and engage in a dialogue about improvements with team members. Because it is a written tracker, your team member has a document to take away and work on. Then one, two to three months later, depending on the urgency, you both sit down again and together you assess progress. Ideally, team members should be aware of the process of how this performance tracking has been constructed. This is called procedural justice – the breaking down of the black box. People like to feel involved in creating a process, even if that process will, at the end of the day, be a tool to also assess their poor performance. Because they were involved in this process, it's no longer a black box. Even if the outcome is negative, they might be more willing to accept their non-performance as the process will clearly show it.


Staying open minded and self aware

As we gain experience, our mind learns patterns of functioning. This is called pattern recognition. We recognize the modus operandi, work processes, ways of collaborating with colleagues, people’s personalities, and preferences etc. We build a picture of reality based on our experiences. With pattern recognition comes emotional tagging, like a tag on Facebook. We tag all the emotions, positive and negative, that go hand in hand with that pattern. Think of all the collaborations you've had with your previous colleagues, all the successes and failures you had in your previous job, they have created joy, fear, pride, etc. Pattern recognition is a cognitive bias. Emotional tagging is an emotional bias. They operate together.

When you go to work in another company, in another setting, you should not fall into the trap of expecting the same patterns to occur because you will not be working with the same people. You will not collaborate in the same way. You will not be doing the same type of tasks. You will not experience the same type of successes and failures. Therefore, you will experience different types of joy, comfort and disappointment. Knowing that all these biases and mind distortions exist will help you overcome falling into pattern recognition and emotional tagging.

Generally, you can only do something about biases if you recognize their existence and how to break out of them. This will help you become a more resilient and better future leader.

Written by

Associate Professor at EHL Hospitality Business School

Designed to accommodate busy hospitality professionals, delivered 80% online

As a student of the MBA in hospitality, you will benefit from a holistic learning experience that combines online courses with three weeks of campus-based learning.