Here’s a familiar scenario for most board directors. You’re reviewing management reports in preparation for an upcoming board meeting. There’s a report on a just-completed project, or maybe a proposal for a new one. You take a quick look. Ho-hum. Nothing new there. It’s just as you thought – the project was a success and the proposal makes sense.
Maybe you’re right. Or maybe it’s confirmation bias at work.
Confirmation bias has a profound impact on all of us, in terms of how we think and – most importantly – how we make decisions. It causes us to seek out and overvalue evidence that confirms our beliefs, while undervaluing, or even ignoring, facts that don’t conform to those beliefs.
“What the human being is best at doing is interpreting all new information so that their prior conclusions remain intact.” – Warren Buffet
Every board of directors is made up of people with the same tendency toward confirmation bias, so its easy for the whole board to fall into the trap. That poses a challenge for sound decision-making.
Cognitive biases are mental shortcuts that we use to assess information and make decisions efficiently. Quite simply, confirmation bias is a type of cognitive bias that causes us to look for information that supports our preconceived beliefs and to reject conflicting ideas or evidence.
Under the influence of confirmation bias, we search for, favor, interpret, and recall information in a way that confirms what we already know or think we know. Not only do we select information that supports our views, but we ignore contrary information and interpret ambiguous evidence as supporting our existing attitudes.
It’s essentially a form of self-deception that leads to narrow-minded, short-sighted thinking. The more we’re affected by it, the less likely we are to listen to critical or opposing views. Unfortunately, we’re all susceptible to it. It’s not hard to recognize it in others, even though we’re often quite oblivious when it comes to our own thinking.
We draw on evidence to solve problems, but confirmation bias distorts the reality that we rely on for that evidence. We ignore evidence that entertains new ideas, and instead we keep assigning greater value to information that confirms our existing beliefs. Not only does this impact our ability to find a solution to a problem, it may even prevent us from identifying the problem in the first place.
Confirmation bias also impacts our memory - we’re more likely to remember information that’s consistent with what we already know, while conveniently forgetting facts that run counter to our beliefs.
It can even impact interpersonal relationships. For instance, once we’ve formed our first impression about someone, we reinforce this belief through subsequent interactions and ignore any actions that contradict our first impressions. And when we look for favorable traits in our own social group – surprise, surprise - we find them. Yet we interpret the behavior of other social groups through the lens of what we already assume about them.
In a rational world, if we encountered evidence that challenges our beliefs, we’d evaluate the new evidence, and adjust our beliefs accordingly. In the real world, that’s not what happens. Instead, we’re subject to the backfire effect, and as a result we tend to reject the new evidence and strengthen our support for our original stance.
Just knowing that confirmation bias exists can help you avoid it in your own thinking. Look at a belief you hold, and deliberately search out ways in which you’re wrong, rather than the ways in which you’re right.
Try to look at the alternative to a belief you hold and see the viewpoint of the other side. You don’t need to compromise your values and beliefs to open your mind. Entertaining another idea doesn’t mean accepting it.
Listen to and carefully consider all sides before coming to a conclusion. And even when you’ve reached a conclusion, continue reassessing it as new information becomes available.
Try out the following tips. You should be able to find one or two that work well for you.:
Confirmation bias is an individual phenomenon, but it also takes place within groups. In the boardroom, it can lead to behaviors such as dismissing others’ opinions, interrupting discussions, holding side conversations, and holding back from sharing ideas. Since people tend to overvalue the opinion of those who agree with them, directors may have a hard time pushing against the tide.
It can also produce and sustain Groupthink, where decision-making is hindered by the belief that harmony and group coherence are crucial to success. Groupthink inhibits diversity of thought and limits the expression of opposing viewpoints. It can lead to decisions based on incomplete or biased information – decisions that result in poor outcomes.
Confirmation bias can lead to overconfidence in the outcome that directors are hoping for by causing them to overvalue evidence that supports success. Directors who were strongly in favor of a new strategy can find glimmers of positivity in almost any report from management. On the other hand, confirmation bias can also confirm a negative view - the director who was against the strategy from the start may see only the bad news.
The more the board becomes entrenched in its beliefs, the greater influence confirmation bias has on directors’ behavior. It even impacts director recruitment. The result is that directors become trapped in an echo chamber where biased thoughts prevail without being challenged.
Here are some symptoms to look for:
Fortunately, there are a few ways to reduce the influence of confirmation bias. These methods generally involve trying to help people overcome their tendency to focus on confirmatory information and reject challenging information, while encouraging them to conduct a valid reasoning process.
Following are a few techniques to consider:
When it comes to the board, the importance of group dynamics — the human element – can’t be overestimated. Each director brings their own habits, preferences, beliefs, and biases to the boardroom. Taken together, all of these individual factors have a huge impact on the board’s culture. When directors are willing to take a hard look at the biases on their own boards, it bodes well for overall board effectiveness.
To combat confirmation bias, here are some practices you might suggest to your own board:
Scott Baldwin is a certified corporate director (ICD.D) and co-founder of DirectorPrep.com – an online membership with practical tools for board directors who choose a growth mindset.
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