Decisions, Decisions

Do you swear to tell the truth, the whole truth and nothing but the truth so help you God?

Our society takes truth seriously (or at least we used to). We have sworn testimony, Hippocratic oaths, military service swearing-in (not to be confused with swearing like a sailor). Most people would consider themselves honest, but how truthful are we being to ourselves? 

Behaviorists would answer: Not very.

One of my classes this semester focuses on Leadership & Organizational change, taught by Sheena Iyengar (author of The Art of Choosing). One of our recent lectures focused on the traps of decision making, pushing us to understand the subtle biases that cloud our judgment, even while we are certain of our internal impartiality and honesty. A few of the interesting ones:

1    1. Anchoring/Framing

How a question is phrased changes how we respond to it, because the mind gives disproportionate weight to the first information it receives. Initial impressions “anchor” the mind in a specific place and then alter our perception of what follows.

Example: Amos Tversky performed a study where cancer patients/doctors were asked one of two questions:

A.      Which would you prefer? Surgery where 90% of patients survive surgery and 34% survived for at least 5 years afterwards, or radiation where all patients survived treatment but only 22% were still alive 5 years later

B.      Which would you prefer? Surgery where 10% of patients die during surgery and 66% died within five years, or radiation where 0% died in treatment and 78% died within five years

The information in both scenarios is identical, only the framing of the question changed. Yet those who received question A chose radiation 25% of the time, and those who received question B chose radiation 42% of the time.

Solution: Try rephrasing questions. As Iyengar notes in her book, Roberto Goizueta, Coca-Cola’s CEO in the 1980s, worried that his staff was becoming complacent and unwilling to take big risks because they saw themselves as market leaders of the soda market, with 45% market share. He called in his staff and told them that Coca-Cola only held 2% of the entire liquid market (not just soda). By rephrasing the question, staff were more willing to take risks to grow Coke’s share (and Coke’s stock went from $4.3B in 1981 to $152B in 1997)

      2. Availability

We tend to make snap decisions, and then bias ourselves by cherry-picking from available information to confirm our initial impression (and unconsciously ignoring dissonant information).

Example: Studies have shown that interviewers tend to make a decision about a candidate in the first 60 seconds (plus or minus 30 seconds) of an interview, then their brains spend the rest of the time hearing what they “want” to hear to confirm their decision one way or another. Of course, interviewers honestly believed they waited to make a fair decision until the end of the interview… but if you took clips of interviews and removed the audio, impartial observers could predict by the interviewer’s body language within the first few minutes whether or not the candidate would be hired.

Solution: Try to remove emotion/perception by making evaluations more quantitative. For job interviews, ask candidates how they would respond in business scenarios (business simulation/case interviews are 3 times more likely to predict job performance than “tell me about yourself” interviews). For more general decisions, try pro/con lists weighted by importance.

3. Variety of Choice

We think that more choices make us happier. In fact, our brains behave differently – we are more likely to believe we made the right choice when we had fewer options to choose from.

Example: A group of engineers were given hypothetical project scenarios from their bosses. Managers either gave the engineers 1 choice, 2-3 choices, or 6-8 choices. Instinct tells us the engineers would be happiest with 6-8 choices, right? Nope. In fact, they perceived managers who gave them 6-8 choices as “weak and indecisive.” Managers who gave one choice were thought “overly authoritative” (not surprising – we don’t like total dictators), but managers who gave 2-3 choices were preferred overall – and described as “decisive, impactful.”

Another example is in job searching. MBA candidates who did the most research and went on the most interviews were rewarded with higher salaries than counterparts who went on fewer interviews. But in the long run, those who went on fewer interviews were more likely to feel that they had made the right decision choosing the job they did. They were happier choosing from fewer options.

Solution: Be aware that your brain likes comfortable, safe situations – like choosing between only a couple options. If you are a manager (or parent!) this means giving your charges 2-3 things to pick from. If you are making your own decisions, focus on a handful of options that really interest you - but don't pander to your biases by not researching other possibilities... after all, the job candidates who did more research ended up with higher paying/more prestigious jobs.