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Cognitive Bias: You Know What Happens When You Assume... [Podcast]

Episode 48: In this episode, Michael and Kathryn discuss the concept of cognitive biases and break down how biases can interfere with your decision-making, how you lead your company, your communication, and your relationships. If you want to improve your work culture and grow your company, then this podcast episode is for you!

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In This Episode You Will Learn:

  • How your decisions are influenced by your world view.

  • Why making assumptions will often get you into trouble in your business.

  • Examples of situations where cognitive biases often come into play.

  • The Black Swan phenomenon.

  • Why recognizing and identifying your own cognitive biases will help you grow your Passion and Provision company.

 

"Part of the danger [with cognitive biases] is assuming that you don't have them."

– Kathryn Redman

  

References:  Myers Briggs Temperament Indicator (personality test)

 

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Michael:         Hello and welcome to HaBO Village Podcast. I'm Michael Redman.


Kathryn:
      And I'm Kathryn Redman.


Michael:
      And today we're going to talk about what the scientists call cognitive bias. What we say is it's about the thoughts we have, the opinions we have, and sometimes their shaped by stuff we haven't thought about. That's what cognitive bias is. So, today we're going to talk about how those things impact your decisions as a leader, how they impact passion and provision companies ...


Kathryn:
      And even how they impact marketing.


Michael:
      Oh marketing.


Kathryn:
      Oh, that's a concept.


Michael:
      Alright. So, thank you so much for joining us today. We really appreciate you guys taking the time to listen to us. So, I just realized that we have over 60 some odd podcasts now.


Kathryn:
      Almost 70.


Michael:
      Almost 70 podcasts and some of you have been listening the whole time and we just want to say thanks. We appreciate it and we really enjoy this and we hear that you enjoy it too. It's nice to hear comments from people. It doesn't happen often but it's great to get an occasional phone call, an occasional email saying how it has impacted you and helped you because help isn't help unless it's perceived as help and we want to be helpful. I know it sounds cheesy but it's real and let's move forward.


Kathryn:
      Oh good morning.


Michael:
      Good morning.


Kathryn:
      It's morning where we are.


Michael:
      Morning where we are and it's been hard to wake up this morning and we're jumping in here. We're going to talk about this concept of cognitive bias. There's lots of great articles out there. The real big point is cognitive bias means that we can, that our decisions are influenced really by stuff we don't even know.


Kathryn:
      Yeah. So, to back it up a little bit think of cognitive bias as the world view that you, the grid that you view the world through. So, you go through your day, because we all do it's just part of who we are as human beings, with a set of assumptions about how the world works, what's true, what's not true, a way to grid the world, a way to understand it, a way to understand people. And sometimes we're aware of those biases and sometimes we're not. So, a friend of ours wrote an article that just made me laugh because he asked these questions. Things like this, "Which is effective, planning or improvisation? Are people essentially good or essentially selfish? Will the future of America be better than its past? Is the Bible true or is it just a collection of ancient folk stories? Are attractive people more reliable then unattractive people?" I love that one. And if you think about that however you answer those questions begins to shed light on what you assume to be true in the world. And the challenge with cognitive bias is that our tendency is to believe that our world view is shared by other people and then to communicate with them as though they actually share that world view when actually they may answer completely opposite of you.


Michael:
      Well, and our world view may be shared by other people but it's not shared by all people.


Kathryn:
      Correct.


Michael:
      And when we look at a cognitive bias. So here's, so let's think about this. You're in a business meeting, you're negotiating some kind of outcome, you're thinking, "Alright I think this is going well. This is a good negotiation. Oh look he just did that. Oh she just did that. Oh those are good signs. Everything's going great." Out of nowhere they decide to say, "You know what? We've decided to go with somebody else. This isn't really going to work. Or, I don't like it." Then you're caught off guard. What happened? You read the room wrong. You read the people wrong. Well, it's cognitive biases that can actually do that to you at times because sometimes they come in and you go, "I made an assumption". Okay here's how we say it often. "I made an assumption about that person or about that situation that I could have swore was right and when it all played out it was totally different."


Kathryn:
      "And then, I based everything I said on that assumption and it was fundamentally flawed."


Michael:
      Now, yes absolutely. And there's a lot of technical words and a lot of stuff but really what happens is if I have a desired outcome cognitive bias can get in the way. It can get in the way of understanding how to navigate a situation. Because we were just hanging out with some friends of ours this last weekend. He is one of the officers, pretty high command in the California Highway Patrol for those of you who are not in California.


Kathryn:
      Yes, California Highway Patrol.


Michael:
      He is a long-time friend of ours. When we get together we get to hear a lot of cop stories, and law enforcement stories, and stuff like that. But one of the things that's interesting when we talk to him is how he talks about how do you train an officer when they pull somebody over, get out of the car, and go up to the person in front of them. And he talks about two different ways that the officer can approach. One is I have a closed off mindset. I have an assumption that that person's broken the law, they've done it intentionally. I go up, I am polite but not friendly. I am there and I my intention's to give a ticket or check out what needs to happen, probably write a ticket. I'll be polite. I'll be courteous but I won't be friendly, I won't be open, and they broke the law. The ticket scenario's over, the person drives away, the officer thinks that was a good stop, everything was fine, and the interaction with the person went well. Then the person thinks as they drive away what a jerk, that guy was a moron, he wasn't friendly at all, he wasn't nice, he was rude, he didn't care what was going on, didn't care about me.


Michael:
      And our friend who is a commander, chief, whatever he is he's in charge. He says he wants his officers to be the type of people that when somebody's pulled over it's a positive experience. Yes you broke the law, yes you're getting a ticket, but it should be a positive experience. And when you close yourself off like that and you have preconceived ideas of what's happening and you're not trying to go beyond, and be friendly, and be open to what can happen in that conversation, and picking up more queues. He says what actually happens also is the officer puts himself or herself in a more dangerous situation. Because they start shutting down their ability, their receptors to pay attention to all of the different information that's coming in from that person and from the environment around them because they have preconceived ideas about how this is going to go, what's going on. So, they're not looking for extra clues and queues.


Kathryn:
      Interesting.


Michael:
      Now, that's one example. Another example of cognitive bias happens in the car all the time. Kathryn and I laugh about this. The person pulls out in front of you ... And we may have talked about this before.


Kathryn:
      Oh it happened to me this morning.


Michael:
      Oh did it?


Kathryn:
      Yeah.


Michael:
      Okay well explain the situation.


Kathryn:
      So, four way stop sign and the person driving in the BMW just didn't notice her part of the four way stop sign and just went right through it. So, I have two options at that point. The character attribution flaw as we call it is a form of cognitive bias. It assumes, "She's a horrible human being. She's an idiot. I can not believe she did that. What person in their right mind doesn't understand there's a stop sign there? She could of killed me. She's dumb." I mean you name it right? And then, there's other colorful words that sometimes come to mind when people cut you off in traffic.


Michael:
      But you would never think of those.


Kathryn:
      But I would never think of those things.


Michael:
      No. No. No. No.


Kathryn:
      So, the other response that I'm training myself into and I get there and I was there this morning. I just laughed this morning was, "She missed that. Well, I've done that several times. I bet she feels silly and if she doesn't she'll never know. It's okay no one got hurt." And instead of assuming she was a horrible human I simply backed into a place of not assuming that she is a jerk or did it with intention, or malice, or is a careless human being at the core of her soul, so unaware. Instead of that it was, "Well we make mistakes no big deal. I've done it a 100 times no big deal."


Michael:
      So, these are all forms of bias right? So, you're looking at this and the more, here's what happens with Kathryn and I. The more we've begun to talk about this in recent months the more we're realizing we do it and the more often we're catching ourselves and able to stop and train ourselves and start to shift our mindset. It happens all the time in business and in marketing. And in marketing you might assume people only want a product because of this, or that, or the other, and you only talk about this specific thing. When you're looking at personality temperaments, we talk about the Myers Briggs a lot.


Michael:
      The Myers Briggs has four major temperaments involved which means there's four major quadrant types of thinking, patterns of the way people initially think and approach a situation. This stuff is 50 years old now, it's got tons of research, it's validated at a high level, this is just the way people are. And I'm going to remind you because we've talked about it in other podcasts. Some people, their initial thought is, "I care about what makes things better. I care about the how and or I care about the why. Why does that happen? Maybe how does that happen? I care about how to improve it. That's an NT. I want more information and I'm looking for a way to improve myself or others." Because everybody cares about getting better. Some people care about now, they care about fun and more quick responses, those are SP's. Decisions based on what seems appropriate at the moment as opposed to, it's a shorter time span often times thinking about it. That's the initial.


Michael:
      Then, you have people who initially think about emotions and relationships with people, those are NF's. "How does this connect with somebody else? How are they going to perceive it? How is it going to effect the relationship?" And the fourth one is, "This isn't very systematic. This isn't very logical. This isn't very organized. Can we put this in organized? I can't think about this until it's in an organized fashion because if it's not in an organized fashion then it's not going to do any good so I might as well not even think about it because."


Kathryn:
      That's your methodical.


Michael:
      And you have that, we call those the SJ's, the methodicals, and they're just thinking about that temperament. Now, everybody in those categories, that's in those categories does that a little or a lot. There's kind of gradients in that. Imagine one to 100 and that's their predisposition is to lean into one of those. They may do it more severely or not. Right off the bat if you don't understand that there's three other temperaments out there besides yours which often right?


Kathryn:
      Totally.


Michael:
      When we talk to people most people don't even understand that this information is new to them or the personality temperament stuff is new to them they're like, "Oh my gosh that's new". Or they knew it existed but they didn't know how to codify it. That right there creates a cognitive bias if you don't realize it because you can't anticipate, or ask questions, or look for queues that somebody else might have a different want, need, desire that motivates them to communicate. Because so often you'll say, "I can't figure out how to motivate this person". And what we're doing is we're trained to motivate them like we would be motivated.


Kathryn:
      Right. And I mean you think about that across marketing, across hearing about your people at the office, about management, and interacting, and how does that person see the world? And the more than you can begin to understand both your own cognitive bias ... 'Cause part of the danger I think is just assuming that you don't have them and assuming that you're, that everybody would answer the questions the same way as you. When you ask the question, "Are poor people not as smart as rich people?"


Michael:
      Well, I mean that's true but ... Sorry.


Kathryn:
      I mean you asked the question.


Michael:
      I don't mean to offend anybody.


Kathryn:
      And even if you answer that question, "Well it depends", there's still a bias in there for you. You're still going to go one way or another. And so, how we view even just humanity is really key in that. My best friend in the world runs the Jesus Center here in town, the homeless shelter. And the cognitive bias towards homelessness is really strong. We make all sorts of assumptions whether we know the story, don't know the story. We group people, we label them, we categorize them, and then we assume we have the right information, and we proceed accordingly. Whichever side of the world you fall on in that, whether you want to help or whether you don't.


Michael:
      Now, let's talk about it for a second because you may be saying, "Wait a minute folks, Michael and Kathryn this is a bunch of crap because my biases". Or, you might be saying, "Other people have biases and I don't really have biases much". Because what you're talking about is something that I haven't just made up I've experienced. I've experienced it over, and over, and over again. I have seen it in the world. I have actually seen it in action. I'm not making this stuff up. And I have friends that corporate.


Kathryn:
      Corroborate.


Michael:
      Corroborate.


Kathryn:
      Words are hard.


Michael:
      And words are hard. Who will agree with me. And so, you're like, so I have evidence. Here is the deal. Have you ever heard of the black swan phenomenon? Have you ever heard of the black swan phenomenon?


Kathryn:
      I have.


Michael:
      Okay. So, the black swan phenomenon is we say we have evidence and experience therefore. Now, in life we have to make therefore decisions. I'm not saying you shouldn't. A little bit of philosophy here or psychology. But you have to make decisions based on the input you are given. The danger often that lends us to this bias is that we believe that our experience no matter how old we are is actually enough experience to make a categorical decision. And we forget that it's only our experience.


Michael:
      Now, here's where the black swan comes in. There was a book called the Black Swan. The whole philosophy, concept that comes out is that the question's asked, "Are there black swans?" And people say, "No, there are no black swans". "How do you know there's no black swans?" "Because I've never seen a black swan." Right, I have seen tons of swans, I've seen them here, and I've seen them here, and I've seen them here. I've seen them on the east coast of America, I've seen them on the west coast of America, I've seen them in Great Britain."


Kathryn:
      I feel like there's a song coming on or a Dr. Seuss book. I see them here, I see them there, I see them everywhere.


Michael:
      Everywhere and they're always white.


Kathryn:
      And bright and lively.


Michael:
      And so, you say, you make the assumption that there are no black swans. You cannot say that until you have inspected, this is the idea behind the black swan concept.


Kathryn:
      Every swan on the planet.


Michael:
      Every swan on the planet. And then, you can say true. There are rules of thumb and as along as you know it's a rule of thumb, as long as you're aware that it's not always, it may be a consistent experience in your world, but that it's not an absolute you then come back into the place where your cognitive biases aren't catching you, aren't tricking you. And here's the deal, cognitive biases, this is a big point here. If you have cognitive biases and you're unaware of them then you can be manipulated way easier or you can use it as a tool to manipulate others way easier. And that's one of the points here is what does that look like. Because we want you as leaders to go ... If you want to grow a passion and provision company, if you want profit and more joy in your company for yourself and at that point you care about your employees and you actually want to create an environment where your employees have more provision in their life and they're not in poverty. You want to pay them well. You may want to pay them more but you can't afford it.


Michael:
      So, how do you continue to grow that and how do you have more joy, more engagement, happier people working for you? And then, if you care about those things you probably care about the community. You care about giving back to the world around you. You care about the world your kids are growing up in, or your family, or somebody. And so, all of the sudden you're like, "Okay how do I do this?" Cognitive biases, these places where we've learned something and we believe it's a 100% true based on our personal experience and there's no other way to do it and there's no other perspective it's legitimate, that gets in the way of creating a place full of profit joy, this passion and provision company. So, what we have to do is we have to make sure that we're aware of these and say, "Hey okay the cognitive biases are real. I need to continue to educate myself on what they are. Two, I need to learn to spot them more. And I need to learn to be more conscious and spot them in myself." She's laughing at me because I said two and I'm holding up three fingers.


Kathryn:
      If you could just see it. It's all I can do to yeah and then he saw me laugh so sorry.


Michael:
      Well, you heard her laugh. Okay. So, you've got to think through these things and then be aware that, more conscious about it because here's what's happening. If we're going to grow as leaders we've got to continually evaluate our internal operating system as some leadership books and concepts write about. That programming that we have, the if then statements that we have in our mind and in our subconscious is really churning a lot and making decisions is helping us move fast. And we have to upgrade our IOS on a regular basis. We have to look for those things that are getting in our way of having, achieving our goals, and achieving a passion and provision company, and then move forward.


Michael:
      Now, I know this is a long runway to all of this but this is really at the core how are you thinking. And cognitive biases are those things that are telling you that the world is one way when it actually is different and that, the delta between those things is getting in your way and stopping you. It's either stopping you or slowing you down from achieving those goals that you have in your business, and in your personal life, in your marriage, wherever. And we want you to continue to be aware of that as we have been. Because it's funny, we've known about this for years but we go in cycles of it coming to the surface and paying attention. And now, we talk about it regularly in the car because people blow through stop signs, they pull out of parking lots in front of you. It happened to me on the way this morning too. And the first thing was this person was at a stop sign. They came around the corner of the street. I had the right of way and they pulled out. But they did it the worst way possible.


Kathryn:
      With malice and contempt for you? Absolutely aggressively like they were trying to hurt you?


Michael:
      No, the opposite. The person took their foot off, what looked like took their foot off the brake. I'm like, hey folks you've seen this before alright feel my pain. So, this person they pull their foot off the brake and the car starts to slowly idle forward and it's idling forward enough that it's getting in your way and you've got to slow down. And then you think, "Are they going to stop?" No, they don't stop. And then, they slowly move to five miles an hour, and seven miles an hour, and 10 miles an hour. This thing feels like it's taking about an hour to happen while I'm driving at 35, 40 miles an hour down this curvy street. And then, and I might have been going too fast. And then, it's like they just kind of go, the speed limits 30 and they're just kind of going 15, and then 18, and then 20, and then finally they pick up speed. And I'm thinking, "What are you doing?" But what I know is probably happening, it's a slow street, there's nobody around, I'm the only person on the street coming.


Kathryn:
      The person's probably 82.


Michael:
      Well, and they were probably looking at their phone or doing something else, checking their radio.


Kathryn:
      Well, in which case they should be condemned.


Michael:
      And then, they just didn't see and they were preoccupied with something else. How often have I been preoccupied thinking nobody's coming when all of the sudden I look up and oh somebody's there.


Kathryn:
      Oh dear yes.


Michael:
      And it just. So, we get this chance to operate, and talk about it, and think about it. Alright, that's enough examples for today. That's probably enough talking about cognitive bias. Let's leave it with this question. What are you doing that could have a cognitive bias in it? How are you thinking in your world today? What kind of meetings do you have in the next 24 or 48 hours? What kind of situations do you have in life that maybe in the last 24, 48 hours you can see this cognitive bias kicked up in you? Turn your thoughts inward, think about that, think about those situations, and think about, "Wow I thought one way, somebody else said, 'No you made an assumption', and my assumption seemed perfectly logical." And that was the cognitive bias. That was the thing that got in our way. It might have been small but a lot of times it's big.


Michael:
      Where in your life is that happening? Where can you stop, and catch those, and think hey that's a cognitive bias? And my recommendation is when you catch those things the first thing you need to do is ask yourself, "Wait a minute, that might be a cognitive bias. What might they be thinking? What's a different situation or a different way it could be positioned?" And when we assume somebody is doing something for a certain reason think, "I'm watching behaviors. When have I engaged in those behaviors and done something like that and I haven't had a negative intent like I'm interpreting?" And try and put your mind in that situation. It actually can change the way you think, it can change your emotions, it can reengage and get you out of a frustrated angry state, or a defensive state, or a attacking state, depending on what kind of situation you're in. And this can continue to help you be conscious about changing your internal operating system.


Kathryn:
      Yeah. So, that when you're leading your people and they make mistakes and you're very frustrated you don't assume you understand why they made the mistake.


Michael:
      Vendors too.


Kathryn:
      Vendors.


Michael:
      I mean even your bosses.


Kathryn:
      Even your bosses. We make mistakes too.


Michael:
      Yeah right. Most of you folks listening here are leaders and most of you do some kind of management or leadership of other people in some relationship. So, hey this is, if you found this helpful today we have a company called Half a Bubble Out and here at Hubble Village and Half a Bubble Out we actually do this kind of consulting and marketing development for people in their companies. We help them tell their stories. We help them grow as leaders. And we love doing what we're doing. We've been doing it a long time. And so, if you think that this would be helpful for you and you're looking for a company, thinking partners, consultants, coaches, to work with you please give us a call. Come to HalfaBubbleOut.com our website and fill out a form or give us a call. We would love to talk to you about your situation and that's it for today.


Kathryn:
      Thanks for tuning in.


Michael:
      Thank you for tuning in. We appreciate you. Have a great day. I'm Michael Redman.


Kathryn:
      And I'm Kathryn Redman.


Michael:
      And we hope you have a passion and vision company. Bye.