- [Narrator] Reducing workplace bias.
Rationality is meant to be the defining characteristic
of the human species.
We have the ability to solve complex problems
and create technologies that have profound effects
on the way we live.
We refer to ourselves as Homo sapiens,
literally, wise man.
However, while the species has the capability for wisdom,
it turns out that we are really more like wise guys
and that in reality, Homo needs to get more sapiens.
The best resource for understanding how we think
is Daniel Kahneman's "Thinking Fast and Slow".
In it, the Israeli psychologist highlights
decades of research on how we really think.
He divides thinking into two types: type 1 and type 2.
Type 2 thinking is rational thinking.
It is what is also known as critical thinking.
It would makes us sapiens.
Rational analysis and science are examples
of this rational process,
which ideally is purely about logic.
Type 1 thinking, however, is much more common and prevalent.
Effectively, the default setting of the mind.
In type 1 thinking, there is no critical analysis
or much rationality.
It is driven more by emotional comfort
and our need to be consistent.
Moreover, type 1 is far less demanding
than type 2 thinking, which requires a lot of energy.
The brain uses about 25% of the total energy supply
of the body and needs to conserve it as much as possible.
Example, you're walking along
and are thinking about your bank account.
You think about the recent deposits and withdrawal
and want to calculate the present balance.
What do you do?
You stop walking because your brain needs the energy
to make the calculation.
And it's hard for humans to walk
and do rational calculations at the same time.
So type 2 thinking is an effortful attempt
to use logic to solve a specific problem.
Type 1 thinking isn't a rational exercise,
but a rationalization exercise,
designed to save energy
and allow us to be consistent with our beliefs,
opinions, and more specifically, our feelings.
In type 1 thinking, it is emotions
and the need for consistency that drive our thinking.
Cognitive biases are a reflection of these dynamics.
They allow us to justify our thoughts and behavior
without doing the hard work of critical analysis.
One of the most common forms of bias is confirmation bias
in which we only seek out information
that supports our type 1 view
and ignores information that contradicts or challenges it.
This used to be called cognitive dissonance.
Other biases are reflection of our need
for shortcuts in a hectic, fast-paced world.
The halo effect is a great example.
It refers to the tendency of attributing
many positive characteristics
to someone whom you like or admire.
Based on one positive quality,
example, physical attractiveness,
we assume that the person is also smart,
funny, compassionate, et cetera, et cetera.
That's not just a generalization.
It's an overgeneralization.
Other biases reflect the complexity
of scaling emotions and risks.
Research suggests that most people err
on the side of caution when faced with risk,
overvaluing its potential harm.
There is the pessimism bias
that feeds off the natural tendency to be cautious.
And an exaggerated counter bias, the optimism bias,
that can have as being overly confident.
It is helpful to think of these biases
as reflections of our status as fairly primitive animals
who are focused more on threat and survival
rather than anything else.
This can account for the bias of temporal discounting
in which we minimize the future consequences
because we are programmed to live in the present.
This is one reason why many retirees
are so ill-prepared, they discount the future,
especially in the younger years and live in the present.
This focus on survival is also why most languages
have more negative words than positive ones.
Happiness is great, but secondary to survival.
Cognitive bias has been around for eons,
but might've become more prominent
as society has become more complex.
Technology and social media have certainly added
to the prevalence of type 1 thinking,
moreover in marketing society,
all manner of biases are used to get you to buy.
Marketing is all about making spurious connections
with people and events so that the product
seems more appealing by association.
"This product is used by Joe Celebrity," states the ad,
which is not a logical argument at all,
but in appeal to your desire to be like Joe.
"So and so lost 50 pounds on this program."
Well, she might've been the only one
out of thousands of people to do so.
Cognitive bias seems in-built
into the human mind and exacerbated by modern trends.
However, real wisdom comes in recognizing
these thought processes for what they are.
And that means acknowledging what you don't know,
understanding how these biases work in you
and others is not only the key to wisdom,
it will also help you make better life decisions.
The important areas of your life need critical thinking.
Moreover, these biases are just as prevalent
in organizations.
They affect the movement of the markets,
the investment in new technology and business,
the evaluation of employees,
hiring practices and every other endeavor.
They also impact politics and major decisions
that can impact millions of people.
Cognitive bias also polarizes people
and can lead to judgmental attitudes and extremism.
It's the right time to uncover this mechanism
and pay it proper respect.
In this module, I will explore 24 cognitive biases,
identify their roots and help you not only see them,
but help you to a wiser perspective.
How will identifying cognitive bias help you?
Let's look at a couple of real life examples
of how cognitive bias play out in real life.
You are very enamored with a someone
you have known for a few months.
In fact, you are in love.
Is this a person you should marry?
Romance is a great setting for cognitive bias.
Overwhelmed with oxytocin and dopamine,
you feel amazing.
In fact, you have never felt like this before.
Unfortunately, this will bias your perception and thinking.
It will certainly induce a halo effect
in which you see your partner as perfect.
Confirmation bias means
that you will certainly ignore any indications
that your partner was less than perfect.
The anchoring bias will have you believing
that this feeling is the way
it will always be, the new normal.
Typically, this infatuation phase lasts a few months,
then the oxytocin and dopamine flow subsides.
And suddenly, your perception is different.
You start seeing some annoying things
about your potential spouse.
Again, bias can creep in.
You've committed time, energy, and yourself,
and to the relationship.
And it's likely that confirmation bias will intrude
as you justify your behavior
and the time you have invested.
Knowing about cognitive bias
and doing something about it are two different things.
What's the answer?
In a relationship, type 2 thinking needs
to address such questions as,
do we have the same goals in life?
Do we have the same values?
In what ways do we support each other?
And in what ways do we need to do some work?
Are there any data that might inform you
about relationships of this kind?
For example, when there was a significant age gap
or racial difference or religious difference
or socioeconomic background.
And it almost certainly is wise
to wait a couple of years
so that not only has the infatuation phase past,
you have had more experience with your partner
and have more data on which to base your decision.
Let's look at another example.
You go to the doctor for some tests
and the diagnosis comes back.
You have a complicated condition
and the doctor reveals the prognosis.
You have about five years to live.
You are devastated.
But you are also misled.
The data for this particular condition suggests
that 70% of people diagnosed with it
do die within five years.
This statistic will likely anchor your expectations.
Moreover, the diagnosis can become
a self-fulfilling prophecy as it creates depression
and a lot of other negative thoughts and even behaviors.
However, what about the 30%
of people who live longer than five years?
And the fact that there are people
who live a full life despite the condition.
What are they doing that you could emulate?
What characteristics do they have that you share?
I know of several people who have been given
grave prognosis and have refused to accept
the cognitive bias that goes along with them.
They have focused on the reality.
A lot of people actually survive.
They then pursued and research
what they needed to do to increase their odds
and they succeeded.
It's not that they rejected the diagnosis.
They simply saw the simplicity
of the prognosis as a form of bias.
That's what they rejected.
You can see that even when there has been critical thinking
and data collection,
results can still be distorted or misrepresented.
Cognitive biases manifest in every aspect
of corporate behavior from hiring to development,
from investment to mergers.
It's not that understanding these biases
means they magically go away.
They don't, but having clarity about how the mind
over and undervalues choices helps minimize the fallout
of being misled by the attempt to simplify.
For example, a company needs to hire a new CEO.
One candidate has just been in the news
for their success at another company,
whose track record is very similar
to several of the other candidates,
but his current appearance
in the media makes him seem more viable
because he has seen more often,
the availability bias,
and he's currently on a hot streak,
the hot hand fallacy.
There is a serious risk
that his candidacy will be overvalued
because of these factors.
Hopefully, you can see how understanding
the cognitive bias dynamic
can lead you to ask questions that challenge
over-simplified ideas and misrepresented facts,
which can literally save your life.
Cognitive bias plays in every area of your life.
Relationships, finances, health,
work, aging, parenting, you name it.
It is everywhere.
Because it is the default setting of the human mind.
Evolution involves recognizing that fact
and thinking more wisely.
That's the way humans and you will get more sapiens.
Reducing workplace bias.