How Confirmation Bias Harms Your Business and What To Do About It

Human beings tend to evaluate information in a way that confirms what they already believe. As a result, our beliefs may fail to align with reality, even when we think we’re being objective and considering all the data.

The name for this cognitive trap is confirmation bias—and we’re all vulnerable to its effects, whether we realize it or not.

While confirmation bias can distort our judgment as individuals, it can also seep into decision making and work processes within organizations. In business, this problem could carry a high financial cost. Fortunately, you can take concrete steps to limit the impact of confirmation bias on your company’s decisions.

Is Confirmation Bias All Bad?

The reasons for confirmation bias may vary. We may have emotional reasons for taking a position, or material interests that predispose us to believe in it. There’s also the simple reason that it takes work to reevaluate our beliefs, and that our time and attention are limited resources.

On a deeper level, confirmation bias is a natural outgrowth of how human minds work. It’s normal for people to try to confirm their beliefs are true—to such a point that some question whether we should think of it as a “bias” at all. The problem arises when we become so committed to our beliefs that we ignore contradictory evidence—or even interpret that evidence as proof that we’re right.

How Confirmation Bias Works in Business

In the business world, confirmation bias can seep into any level of decision making—with costly results. So how exactly does this happen?

Let’s say a company’s marketing team creates a strategy to promote a product in a new overseas market. Everyone at headquarters loves the concept, and the initial results appear promising (despite doubts from the regional branch office about the messaging). The top brass are convinced that they have found a winning approach.

As time goes on, new data suggests that the campaign is not having the impact everyone expected. The marketing team and leadership, however, downplay this new evidence. Instead, they keep focusing only on data that seems to support their original judgment. By the time they recognize the problem and change course, the company has lost valuable time and money.

In this scenario, we can imagine the viewpoints of all the different parties involved:

• The members of the marketing team put weeks of work into developing the strategy, and they don’t want to have to go back to the drawing board. Their reputations within the company, and even their own self-regard, may also depend on its success.
• The firm’s executives have many other issues that demand their attention; they don’t need one more problem on their plate. What’s more, a switch in strategy could necessitate painful adjustments to the budget.
• For people further down in the hierarchy, the rewards for questioning the company’s strategy are low. Meanwhile, the risks may be high if they upset their colleagues or superiors, or if they voice doubts that turn out to be wrong.

All these people have powerful incentives to stay the course, even when new evidence should lead them to change their minds. They aren’t necessarily making a conscious choice to ignore inconvenient information. Instead, their desire to maintain their existing beliefs is shaping their decisions in ways they don’t fully recognize.

What Steps Can You Take?

Your company can combat confirmation bias by taking active steps to instill the right culture and establishing processes to encourage more impartial decision making. Here are some possible actions to put you on the right path.

1. Make the process of updating a best practice

As author Julia Galef points out in her book The Scout Mindset, it’s harder to change our minds when it requires admitting we “made a mistake.” Instead, we can lower the stakes by framing course corrections as “updating”—a routine, value-neutral process of revising our beliefs as new information comes in. On an organizational level, leaders can model this behavior for others and create an atmosphere where updating is a normal expectation, not an occasion for fault finding or blame.

2. Implement continuous review processes

Your organization can encourage updating by building it into your routine decision-making processes. This may entail assigning a team to perform ongoing reviews of critical projects or initiatives and provide regular, evidence-based reports on their findings. In the localization industry, language quality review and management can provide a model for this kind of continuous review process.

3. Diversify the voices involved in decision making

The chances of collective bias go up when everyone in the room shares the same perspectives. To reduce this risk, consider how to bring people with more varied roles and viewpoints into key decisions. (The company in our original example, for instance, might have recognized the problem more quickly if its discussions at headquarters had included its regional sales and marketing staff.) More broadly, this is one of many arguments for increasing diversity in a company’s workforce and management.

4. Appoint a devil’s advocate to test your beliefs

When making critical decisions, it may help to ask a member of your team to play devil’s advocate (Source: HBS Online). This person has the explicit mission of challenging the beliefs that guide your company’s actions, even if it means making arguments they don’t personally believe. For instance, a devil’s advocate could be assigned to critique your existing strategy and present the strongest possible case against it, using the best arguments and data at their disposal.

5. Use the right metrics, the right way

Well-chosen metrics can promote less biased decisions—but they can also mislead us by providing an illusion of objectivity, when we’re actually just cherry-picking metrics that support our existing beliefs. To limit this problem, seek out multiple metrics to measure the same outcomes, and use a consistent set of metrics over time. It’s also a good idea to reassess and update your metrics from time to time, especially as new sources of information become available.

6. Seek an unbiased third-party assessment

When the costs of confirmation bias are high, the best solution may be to bring in an unbiased third party to provide objective feedback. This person or group should come from outside your organization and should genuinely have nothing to gain by promoting one set of beliefs over another. The risk, of course, is that decision makers will ignore the assessment and cling to their initial beliefs, regardless of the findings. You have a better chance of avoiding this problem if you gain buy-in from all stakeholders in advance and ensure the third-party consultant or advisor commands their trust.

Leadership Makes the Difference

Can you eradicate confirmation bias from your business? That seems unlikely, given how human minds operate. Nonetheless, you can reduce its risks and costs through adjustments to your decision-making process.

The fight against confirmation bias begins at the top. Your leadership can promote better decisions by setting the tone and instilling the right practices at every level of your organization. At the same time, the right third-party expertise can help you make unbiased choices when they matter most.

If you are interested in learning more about how Beyont’s language quality management can help your company avoid the pitfalls of confirmation bias, please contact us below.