Hard on the heels of our last blog about cognitive bias, we thought we might consider another bias that leaders can fall prey to. Today’s bias for discussion is the ‘interest bias’. This is the bias where we can become misaligned due to our own interests and perhaps a conflict with the interests of the organization at large.
Silo thinking is perhaps the most easily detectable manifestation of interest bias. Silo thinking is a term much used and it is indeed a real thing that we encounter frequently. This is the situation in which organizational units defend their own interests.
Furthermore, senior leaders sometimes honestly view the goals of a company differently because of their different roles or functional expertise. Heated discussions in which participants seem to see issues from completely different perspectives often reflect the presence of different (and generally unspoken) interest biases. Clearly having multiple perspectives on an issue should be encouraged, as such diversity, if considered constructively, generally provides a better answer than one derived from group think. The problem comes when those different perspectives are motivated by the wrong interests.
The truth is that adopting a sufficiently broad (and realistic) definition of “interests,” including reputation, career options, and individual preferences, leads to the inescapable conclusion that there will always be conflicts between one leader and another and between individual leaders and the company as a whole.
Strong decision-making processes explicitly account for diverging interests. For example, if before the time of a material decision, the group formulate and agree precisely the criteria that will and won’t be used to evaluate it, they make it more difficult for individuals to change the terms of the debate to make their preferred actions seem more attractive. Similarly, populating meetings or teams with participants whose interests clash can reduce the likelihood that one set of interests will undermine thoughtful decision making.
Misaligned incentives are also a major source of interest bias. If the ‘reward’ becomes misaligned to the core goals of the organization, the behaviours will become misaligned as the behaviours will be driven by the incentive, not the need to be aligned.
Open discussion of the biases that may be undermining decision making is invaluable. It can be stimulated both by a healthy review of past decisions and by observing current decision processes. Understanding if there is a risk, in this meeting, that the group is being too action oriented is an example. Perhaps we see someone who thinks he or she recognizes a pattern but whose choice of analogies seems misleading to us? Are we observing and uncovering biases that combine to create dysfunctional patterns that, when repeated in an organization, will become cultural traits?
Accepting that cognitive bias exists is the first step, and uncovering those biases should quickly follow. Only by understanding the real situation can we truly make good choices.