Will decision making improve if we understand the bias in the decision making unit?
As a human I know we all have biases, and we all have different biases. We expose certain biases based on context, time, and people. We know that bias forms because of experience, and we are sure that social context reinforces perceived inconstancy. Bias is like a mirror and can show our good and bad sides.
As a director, you have to have experience before taking on the role, even as a founder director. This thought-piece asks if we know where our business biases start from and what direction of travel they create. Business bias is the bias you have right now that affects your choice, judgment and decision making. Business bais is something that our data cannot tell us. Data can tell me if your incentive removes choice or aligns with an outcome.
At the most superficial level, we know that the expectations of board members drive decisions. The decisions we take link to incentives, rewards and motivations and our shared values.
If we unpack this simple model, we can follow (the blue arrows in the diagram below) that says your expectation builds shared values that focus/highlight the rewards and motivations (as a group) we want. These, in turn, drives new expectations.
However, equally, we could follow (the orange arrows) and observe that expectations search and align with rewards and motivations we are given; this exposes our shared values that create new expectations for us.
Whilst Individual bias is complex; board or group bias adds an element of continuous dynamic change. We have observed and been taught this based on the “forming storming norming performing” model of group development first proposed by Bruce Tuckman in 1965, who said that these phases are all necessary and inevitable for a team to grow face up to challenges, tackle problems, find solutions, plan work, and deliver results.
The observation here is that whilst we might all follow the Tuckman ideals of “time”; in terms of the process to get to perfroming, of which there is lots of data to support, his model ignores the process of self-discovery we pass through during each phase, assuming that we align during the storming (conflicts and tensions) phase but ignore that we fundamentally have different approaches. Do you follow the blue of orange route and from where did you start.
This is non-more evident than when you get a “board with mixed experience”, in this case, the diversity of experience is a founder, family business and promoted leader. The reason is that if you add their starting positions to the map, we tend to find they start from different biased positions and may be travelling in different directions. Thank you to Claudia Heimer for stimulating this thought. The storming phase may align the majority round the team but will not change the underlying ideals and biases in the individuals, which means we don’t explose the paradoxes in decision making.
What does this all mean? As a CDO, we are tasked with finding data to support decisions? Often leadership will not follow the data, and we are left with questions. Equally, some leaders blindly follow the data without questioning it. Maybe it is time to collect smaller data at the board to uncover how we work and expose a bias in our decision making.