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The Role of Cognitive Biases in Leadership (and Understanding the Impact on Organisational Culture) 


Given the nature of my work, I am no stranger to travel. On this particular occasion, I landed at a remote airport in an unfamiliar town. After finally locating the car hire desk (why are they always hidden?), I stepped into the dark, cold night and pouring rain to find my hire car. 

 

Not far from the airport, my hire car started pulling hard to the left, steering me towards the verge. I corrected, but it happened again and again. The more I corrected, the more the car seemed to resist—almost fighting back. 

 

I soon discovered the cause: the vehicle’s overactive lane-departure system. Supposed to keep me safe, this feature was overwhelmed by the combination of rain, low light, and winding roads, making decisions that were actually dangerous. Once I deactivated the system, normal driving resumed. 

 

This incident illustrates our constant wrestle with cognitive biases. Our brains, like the car's onboard computer, make automatic decisions for us. While often well-intentioned, these biases can push us towards danger, especially in complex or unusual situations. 

  

How to Spot a Bias 

 

A cognitive bias occurs when our brain makes us think or decide in a way that's not always logical or normal. These biases result from the brain's attempt to simplify information processing and can lead to perceptual distortion, inaccurate judgment, and illogical interpretation. 

 

There are a few key characteristics to help identify cognitive biases: 

 

1. Systematic and Predictable: Consistent and repeatable in similar situations. 

2. Subconscious: Often operates below the level of conscious awareness. 

3. Influence on Perception and Memory: Affect how we perceive information and recall past events. 

4. Heuristic-Based: Stem from mental shortcuts used to make quick decisions. 

5. Impact on Decision-Making: Can lead to poor decisions and judgments. 

 

Heavy stuff. If your leaders and teams are “pulling to the left” with biases when making decisions about hiring, promoting, prioritising work, or making commercial decisions, it has a massive impact on organisational culture and effectiveness. 

 

But, like the computer in my hire car, biases can be seen as features, not faults. Recognising this makes it easier to locate and use the off switch when needed. 

 

Cognitive biases come in all shapes and sizes, but once you start to recognise them, they become easier to spot. Familiarity with a few can lead to “AHA!” moments as you identify hidden obstacles. These are often referred to as blind spots for a reason. 

 

Understanding cognitive biases is essential for improving decision-making processes, allowing individuals to recognise and mitigate their influence. 

 



How to Flip Your System Override Switch 

 

To counter cognitive biases effectively, it's essential to understand how they work and apply strategies validated by psychological research. Ready to hit the system override switch? Here are strategies to counter four big biases that often derail leaders. 

 

How leaders can overcome cognitive bias

1. Status-Quo Bias 

Definition: The tendency to prefer things to stay the same rather than change. 

 

Strategies: 

- Reframe the Decision Context: Emphasize potential gains from change rather than losses from leaving the status quo. 

- Incremental Change: Break down change into smaller, manageable steps. 

- Highlight Inaction Costs: Make the costs of maintaining the status quo explicit. 

  

2. Confirmation Bias 

Definition: The tendency to search for, interpret, and remember information that confirms one’s preconceptions. 

 

Strategies: 

- Seek Disconfirming Evidence: Actively look for information that challenges existing beliefs. 

- Devil’s Advocate Technique: Assign someone to argue against your position. 

- Structured Decision-Making Processes: Use frameworks that require evaluating multiple perspectives. 

  

3. Sunk Cost Bias 

Definition: The tendency to continue an endeavour once an investment in money, effort, or time has been made. 

 

Strategies: 

- Precommitment: Set clear criteria for decision-making before engaging in a project. 

- Future-Focused Thinking: Focus on future costs and benefits rather than past investments. 

- Third-Party Perspective: Consult someone not involved in the initial decision for an unbiased perspective. 

 

4. Mere-Urgency Effect 

Definition: The tendency to prioritize tasks perceived as urgent over those that are important but not time-sensitive. 

 

Strategies: 

- Eisenhower Matrix: Categorize tasks based on urgency and importance. 

- Time Blocking: Allocate specific times for important, non-urgent tasks. 

- Mindfulness and Reflection: Regularly reflect on goals and priorities. 

 

Implementing these strategies can help individuals make more rational, well-rounded decisions by countering inherent cognitive biases. 

  

Reducing the Impact on Organisational Culture 

 

Cognitive biases not only affect individual leaders but also permeate organisational culture. For example, the status-quo bias can hinder adaptation and innovation by fostering resistance to change. By reframing the decision context and highlighting potential gains, leaders can cultivate a culture that embraces innovation and continuous improvement. 

 

Confirmation bias poses another challenge by fostering echo chambers within teams, stifling creativity and effective decision-making. Implementing strategies such as seeking disconfirming evidence and encouraging constructive debate can foster a culture of open-mindedness and critical thinking, enriching the organization's collective intelligence. 

 

Ethical considerations are crucial too. Biases like the halo effect, where positive traits influence perceptions of unrelated attributes, can lead to biased hiring or promotion decisions. Leaders must be vigilant in recognising and addressing these biases to ensure fairness and integrity. 

 

Like a car constantly steering you into the verge, cognitive biases pose significant challenges to leadership and organisational culture if they go unchecked. By understanding these biases and implementing strategies to counteract them, leaders can foster a healthier, more open-minded and clearer-thinking culture. 

 

By embracing diversity of thought and encouraging constructive debate, leaders can harness the collective intelligence of their teams to navigate complexity and deliver better outcomes rooted in better decisions. 

 

How is your organisation helping leaders and teams notice the effects of cognitive bias on your organisational culture? 

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