Professionals like to talk with pride about how they make "data-driven" decisions. They express faith in logic and disciplined analysis. Many scoff at others who confess to trusting their gut and going with their intuition.
Today, I'd like to ask a question to all of you highly analytical decision makers:
How do you adjust for the 175 cognitive biases that tend to push all human beings away from rational decisions?
To save time, you don't have to explain to me - or even to yourself - exactly how you compensate for all 175 biases. Since you are a rational, data-driven decision maker, I assume you have memorized all 175 and you have a unique and effective strategy for dealing with each one. But to refresh your memory, please just take a minute and mentally review your strategy for seven of them I've listed here (all taken from this Wikipedia page):
Automation bias: The tendency to depend excessively on automated systems which can lead to erroneous automated information overriding correct decisions.
Confirmation bias: The tendency to search for, interpret, focus on and remember information in a way that confirms one's preconceptions.
Conjunction fallacy: The tendency to assume that specific conditions are more probable than general ones.
Empathy gap: The tendency to underestimate the influence or strength of feelings, in either oneself or others.
Illusory correlation: Inaccurately perceiving a relationship between two unrelated events.
Neglect of probability: The tendency to completely disregard probability when making a decision under uncertainty.
Overconfidence effect: Excessive confidence in one's own answers to questions. For example, for certain types of questions, answers that people rate as "99% certain" turn out to be wrong 40% of the time.
You have compensation strategies for all seven, right? Just like you do for all 175, right?
Wrong. You don't, and neither do I. Perhaps Warren Buffett and Charlie Munger do, but not 99.999% of leaders and professionals.
Cognitive biases impact all human decisions and all human creations. You know that data-driven software you rely on to provide objective answers? It has biases built into it, too. Humans designed and programmed it
Buster Benson did a beautiful job of organizing all these 175 biases into "four qualities of the universe that limit our own intelligence and the intelligence of every other person, collective, organism, machine, alien, or imaginable god." They are:
1. There is too much information for anyone to process
2. There is not enough meaning in raw information
3. There is not enough time to thoroughly consider all information and possibilities
4. There is not enough memory in our brains or computers to store all relevant information
When I looked at this shorter list, one perception immediately occurred to me: coping with these four qualities is the fundamental role of intuition.
Yes, the people who deride intuition as being too vulnerable to human biases have it all wrong. Intuition is our way of getting to the right answers despite all our cognitive biases.
Intuition is what allows a scientist, analyst, or strategist to look at an overwhelming amount of data and say... this is what we can ignore for now so that we can focus on these other possibilities. It is an essential skill, given that we lack enough time and memory.
Does this mean that intuition is free from human biases? Of course not. But it is an extremely valuable tool in navigating those biases successfully. Unless, of course, you have 175 proven strategies for coping with each of the 175 cognitive biases. (I'm still waiting...)
