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Concepts and Definitions
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Barrier & Biases
Functional Fixedness
Functional Fixedness refers to the cognitive bias that limits an individual in their problem-solving using objects. What this means is that people will associate a specific function with an object limiting the potential creativity to solve a problem. In the early 1900s psychologist Karl Duncker demonstrated this concept with an experiment. In this experiment, Duncker provided participants with a candle, a box of thumbtacks, and matches. He asked the participants to attach the candle to a wall over a table and for the candle not to drip down. Most of the participants tried to directly tack the candle to the wall; the out-of-the-box thinkers tried to melt some of the candle wax and stick it to the wall. None of the participants thought to tack the thumbtack box to the wall to serve as a candle holder. This was because they assumed that the box only served as a box to provide them with thumbtacks and subconsciously dismissed its functionality.
Design Fixation
Design Fixation is essentially when you get really set on a certain way of approaching an idea and don't look at other ways to approach the problem. Other words for this that may sound familiar are getting set in your ways, tunnel vision, using old ideas, and being blind to the bigger picture. This mostly occurs when someone refuses to look at the big picture of an idea or they refuse to find alternative solutions to make the idea happen. A simple yet effective example would be a child who wants to get past a wall. The wall is only ten feet wide and it is easy to go around. The child decides to walk straight into the wall to get past the wall but he is pushed to the ground from this action. He gets back up and tries again but he never thinks to go around the wall. This is essentially what design fixation is. Now an example that can apply to our business world. Blockbuster was a massive video rental retailer in the late 20th century that had 1000s of stores across the country. In the 2000s, Netflix came along and decided to change the business by mailing rental movies to your door for cheap, and eventually, they would create the Netflix streaming platform. Blockbuster at first did not change its ways and stayed the course with its business model and was stubborn to change with its competitor. But Netflix took off and Blockbuster realized too late how their fixation on their business model had prevented them from being able to compete with Netflix. Blockbuster would soon go out of business in the early 2010s and Netflix became the dominant business of the two. See https://www.fastcompany.com/3044535/what-is-design-fixation-and-how-can-you-stop-it
Goal Fixedness
Goal fixedness refers to how the way that a goal is phrased can narrow our thinking. It is a cognitive bias that limits a person's ability to see other alternatives or solutions. People become fixated on the purpose and overlook potential other functions. We have to frame the goal in more general terms to allow for more alternatives. (It is similar to functional fixedness) “For example, if you talk about ‘adhering’ to a product, people may assume that the only way to attach it is with glue. If you talk about ‘fastening’ a product, however, options such as nails, brackets, glues, and screws may come to mind”.
System 1 vs. System 2 thinking
System 1 and System 2 thinking are concepts pioneered by psychologist Daniel Kahneman in his book Thinking, Fast and Slow. These two systems represent distinct modes of thinking that people use to process information and make decisions.
System 1 Thinking: is fast, automatic, intuitive, and largely unconscious. It operates quickly and effortlessly, relying on heuristics and patterns to make quick judgments and decisions. It is responsible for our immediate reactions and responses to situations without requiring much mental effort. System 1 thinking is prone to biases and can lead to errors, but it is vital for quick decision-making and survival instincts.
Examples of System 1 Thinking:
Preventative Measures for System 1 Thinking Biases:
System 2 Thinking: is slow, deliberate, analytical, and conscious. It involves lots of effort in processing information, logical reasoning, and critical thinking. It requires mental energy and attention, as it involves considering multiple factors, evaluating evidence, and making deliberate choices. It helps in overcoming biases and making more rational decisions.
Examples of System 2 Thinking:
Preventative Measures for System 2 Thinking Biases:
Planning Fallacy
The planning fallacy is basically overoptimism towards one's estimates of how long an action takes time. Victims of the planning fallacy struggle to understand how much time will be needed to complete a future task and underestimate the time needed. When looking at planning for an event, people often consider the most optimistic outcomes and ignore the ramifications of any potential setbacks or unforeseen circumstances. Getting ready in five minutes might actually happen one day, but the chances are more likely that most days it will take a few more minutes than that. The planning fallacy says that people will believe that it truly takes those five minutes, which will in turn make them late as underestimated times add up fast. This can be seen in business through deadline setting, as companies often set deadlines that are over-ambitious and set teams up for failure from the start. See also Escalation of Commitment & Overconfidence Bias
Escalation of Commitment is a human behavior pattern in which an individual or group facing increasingly negative outcomes from a decision, action, or investment nevertheless continue the behavior instead of altering course. The actor maintains behaviors that are irrational, but align with previous decisions and actions.
Overconfidence Bias is the tendency for a person to overestimate their abilities. It may lead a person to think they're a better-than-average driver or an expert investor. Overconfidence bias may lead clients to make risky investments.
Base Rate Neglect, an important bias in estimating probability of uncertain events, describes humans' tendency to underweight base rate (prior) relative to individuating information (likelihood). However, the neural mechanisms that give rise to this bias remain elusive.
Cognitive Dissonance is the mental stress or discomfort that an individual experiences when they hold two or more contradictory beliefs, values, or perspectives at the same time. This can happen as someone’s behavior changes with their beliefs, or when new information starts to challenge their existing values. Examples include Cultural Beliefs: Someone who was raised in a culture with traditional beliefs might experience cognitive dissonance if they decide to move to a country with a different culture, i.e. Arranged vs Non-arranged marriages; Smoking: Someone who is aware of the dangers of smoking yet continues to smoke could experience cognitive dissonance. They might feel the discomfort of knowing that smoking is harmful, but they choose to do it anyway. A common way to combat cognitive dissonance is to change your beliefs and become more open-minded. This will allow you to better soak in new information so it doesn’t completely tarnish your values or perspectives.
Confirmation Bias is the Human tendency to search for, favor, and use information that confirms one’s pre-existing views on a certain subject. Examples include someone who might hold a stereotype towards a certain group of people. Any action that aligns with the stereotype will overlook other behaviors; a manager who has high expectations for an employee might focus more on their accomplishments rather than their bad qualities and mistakes. A common way to combat confirmation bias is to have more mental awareness. It is important to understand that your brain is naturally inclined to seek out information that confirms existing beliefs. See https://online.hbs.edu/blog/post/confirmation-bias-how-it-affects-your-organization-and-how-to-overcome-it
Fundamental Attribution Error
The fundamental attribution error refers to an individual's tendency to attribute another's actions to their character or personality while attributing their behavior to external situational factors outside of their control. In other words, you tend to cut yourself a break while holding others 100 percent accountable for their actions. The fundamental attribution error is essentially when one perceives others' actions as being because of their personality, while their own behavior is attributed to external factors.
For example, a "lazy employee." If a co-worker was late to an important meeting, you might be inclined to form a judgment of her character based on this one action alone. It's possible, that your co-worker's behavior is due to several external factors such as a family emergency or traffic jam, which have nothing to do with the quality of her character. Another example is when parents could blame other children's bad behavior on bad parenting. but then blame their own child's behavior on other things, such as lack of sleep. In action, forming impressions of a person's character based on limited information can have long-lasting effects. To prevent, when you become resentful of someone for a bad "quality" they demonstrate, try to make a list of five positive qualities the person also exhibits. This will help balance out your perspective and can help you view your co-worker as a whole person instead of through the lens of a single negative quality.
Parable of the Boiling Frog
The parable of the boiling frog as it relates to business serves as a caution to not adapting to change and being complacent. It says that a frog placed in boiling water will simply jump out, however, a frog placed in cold water that is gradually warmed to boiling will not realize the danger until it is too late. This reinforces that in business it is vital to observe signs of change and adapt. It is easy to see water when it is boiling (major disruption/competition) but it is hard to predict when cold water will boil (prediction disruption). A small temperature increase (small change) can suggest the water will be boiling later (major disruption). A company that is complacent and firmly resting on its laurels is in danger of having its once-comfortable pot of water turn boiling too fast to escape. This parable reinforces the need for risk management, innovation & disruption, adaptation, and strong company identity and leadership.
Recency & Primacy Bias
Recency bias is "the tendency to overemphasize the importance of recent experiences or the latest information we possess when estimating future events." If we have made a recent mistake within a computation error, we are likely going to put an overemphasis on fixing and not allowing for that error in the next project. It gives information to mislead a person to favor what has happened more recently to indicate what will happen next. Primacy Bias is the idea that we are going to remember the information that we first saw best. If you are playing a game of clues for example, if you find out which room was correct first, the other information in the middle of the game is harder to recall. Same if you are looking at a grocery list, you are likely to remember what you first read rather than what is down the list.
Self-serving bias
Self-serving bias refers to the tendency of individuals to attribute their successes to internal factors or personal qualities while blaming external factors or circumstances for their failures. It is a cognitive bias that allows people to protect their self-esteem and maintain a positive self-image. An example of self-serving bias is when someone contributes their successes such as intelligence, preparation, or skills. But when failing or facing failure or negative experience contributes to bad luck, unfair circumstances, or the people's actions for their failures. Self-serving bias can lead to distorted thinking and poor decision-making. It can prevent individuals from taking responsibility for their failures, hinder self-improvement, and damage relationships by fostering a lack of accountability. In some cases, it can even lead to conflicts and disputes when people refuse to acknowledge their role in negative outcomes. A way to help overcome self-serving bias is by taking an outside view of the situation and your behavior, this requires you to really think about your actions and be accountable for the way you behave. You can also use digitization by tracking your KPI's or performance metrics to understand that what you're doing is either working or not working. By viewing things as numbers and statistics it can help you overcome the mental barrier of "that was someone else's fault and not my own" as you're using more "System 2" thinking instead of "System 1" thinking that would allow you to blame others based on emotion.
Anchoring & the Availability Heuristic
The Anchoring bias is seen when one piece of information is used to justify one’s opinions or beliefs. This can be seen when comparing two similar items with different prices. Seeing the cheaper item first will “anchor” the idea that the other item is too expensive and vice-versa.
The Availability bias is using past events/information to judge how likely a similar outcome is to occur. For example, when people asked what is more lethal, sharks or bike accidents, most individuals would say shark attacks since their coverage is more available. However, shark attacks are very rare, but the reporting coverage makes the information more available.
Survivorship Bias
Survivorship bias is basically when we only focus on people, projects, or things that were successful during a selection process while ignoring/overlooking the ones that failed. Two Examples: Start-up businesses that failed while bigger companies like Apple and Microsoft get an immense amount of recognition. College dropouts are never mentioned while college graduates are highly recognized at a university. To prevent this bias, be strategic and selective when picking your data sources to ensure accuracy in your observations. See https://thedecisionlab.com/biases/survivorship-bias
Blindspot Bias is a cognitive bias that fails to recognize the impact on one's own judgment, while at the same time noticing the impact of bias of judgments made by others. Also could be described as the tendency to see yourself as less biased than others. Individuals with Blindspot Bias may display a bias and not realize what they are doing is wrong, and then when someone else displays the exact same bias, they immediately recognize it as a fault on the other person. But what they are doing is not wrong because. they do not see faults within themselves. One of the problems faced with Blindside Bias is that individuals are unable to see their faults which take away from their ability to see their faults and in return grow from them.
Outcome Bias refers to the tendency to judge the quality of a decision or action based on its outcome rather than the decision-making process itself such as considering the current situation/information. For example, a football coach calls a risky play. If it is successful, it could result in a touchdown and the coach would be praised. However, if it fails, the coach would receive hate.
This evaluation based solely on the outcome represents outcome bias. It disregards the decision-making process, the available information, and the factors that led the coach to make the decision. To prevent, remove the outcome to an unbiased playing field. To do this, you can assess the quality of a decision based on the information and factors available at the time the decision was made, rather than relying on hindsight. Evaluate the decision based on the reasoning, analysis, and logic used in the decision-making process.
Placebo Bias refers to the influence of expectations and beliefs on the effectiveness of a treatment or intervention. It occurs when a person's belief in treatment leads to perceived positive effects, even if the treatment itself has no intrinsic therapeutic value. For example, researchers are conducting a study to see whether or not a new medicine improves cognitive function. One group receives the medicine and another group receives a placebo (fake medicine) that has no effects. If the placebo group shows improvements in cognitive performance, it may be due to their belief and expectation that the placebo will enhance their cognitive abilities, rather than any actual effects of the supplement. To prevent this, perform clinical trials that include a control group that receives a placebo. By comparing the effects of the active treatment to those of the control group, researchers can determine if the new drug is effective.
Abilene Paradox is a social phenomenon that describes a situation where a group of individuals collectively decide on a course of action that is counter to the preferences of any of the individuals in the group. This often results from a failure to communicate honestly or effectively, typically because individual members mistakenly believe their own preferences are out of step with the group. Consequently, everyone goes along with the decision, even though it may not be in anyone's best interest. For example, a group of friends decides where to eat for dinner. None of them want to eat at a particular restaurant, but they each incorrectly assume that the others want to go there. To avoid disappointing their friends, they all agree to go to that restaurant, even though no one in the group actually wants to. To prevent this each member's opinion should be valued and taken into consideration. This can be achieved by fostering a culture that respects diversity of thought and encourages the expression of individual preferences.
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