DE-RISKING HUMAN NATURE: A FEW OF THE BIASES THAT CAN LEAD TO OR HEAD OFF A CRISIS
Most of us believe we are generally sensible people. We consider ourselves level-headed at work maybe even more so than at home, where, let’s face it, things can sometimes get emotional. At work, we respond thoughtfully to change. We listen and discuss. We make plans. We understand our roles and our organisation’s needs. And then we do what is expected and needed, purposely.
But this is not really us.
Humankind’s usual way of behaving – impulsive and impatient, ignoring inconvenient truths, fearful of the unknown – is why some company restructurings, acquisitions, product launches, tech rollouts and strategic business decisions go awry. It is human nature to think we are the solution but sometimes our nature is part of the problem, driving us to act based on biases that increase risk.
Conventional wisdom has it that people act rationally out of self-interest. But Princeton University psychologist Daniel Kahneman won a Nobel Prize in economics in 2002 for his pioneering work with the late Amos Tversky that showed otherwise. They uncovered mental shortcuts or ‘heuristics’ that humans take to make ‘good enough’ decisions and navigate the complexities of the world. Most of the time, these irrational judgments, or cognitive biases, are harmless. Yet, on occasion, our cognitive biases can cause problems and transform manageable issues into full-blown crises.
Recognising patterns in human behaviour and stepping in to modify it pre-emptively can reduce risk and boost an organisation’s odds of producing intended results. Amazon, which is one of history’s most valuable and pioneering companies, has managed high-stakes transformational change time after time. One of its secrets: the company employs full-time behavioural scientists throughout its operations including at an internal research unit called Amazon Connections to, as the company says in its recruitment materials, use quantitative and qualitative data, “quick question” surveys and research studies “to deliver deeper insights that we can surface to leaders”.
Oct-Dec 2019 Issue