The Cognitive Edge: How to Outsmart Bias and Improve Business Decisions

One of the key factors in determining job grades, titles, and compensation in organizations is the scope or impact of the decisions made by the person in that role.

Higher impact decisions = higher level employee

Lower (or no) decision making = lower-level employee

Decisions are risky, multifaceted, and undeniably influenced by factors other than logic.

Some elements that lead to better decisions include:
  • Considering multiple angles
  • Managing emotional reactions
  • Being adaptable to changing conditions and evidence
  • Ensuring the assumptions, beliefs, and theories used to make the decision are falsifiable

Wait, what? What does falsifiable mean?

In grad school, one of the courses that was famous for kicking our butts was Research Methods taught by Dr. Hauenstein. The textbook was three inches thick, and I had to record every lecture (on an actual cassette tape) and listen to them two to three times to make sure I absorbed everything.

I’ll never forget the lecture on falsifiability. It rocked my budding scientific brain and changed the way I evaluated, well, the world.

In 1934, Karl Popper contributed the following philosophy to the scientific world: Nothing can be universally proven. Theories and hypotheses can be supported by evidence but not proven. HOWEVER, everything we believe or assert scientifically MUST be falsifiable (i.e., capable of being disproven). You cannot accept one without the other.

Here are some examples of falsifiable theories:

  • All swans are white. If I observe hundreds of white swans, my theory is supported. If I observe a black swan, my theory is false.
  • The COVID-19 injection causes magnetism in the body. If I measure the magnetic fields around a person both before and after they receive a COVID vaccination, using a reliable magnetism measuring tool, my theory can be either supported or refuted.
  • Water boils at 100 degrees Celsius at sea level. This can be tested and verified or falsified through scientific observation and measurement.

Examples of unfalsifiable theories:

  • Freud: “The patient is fixated at the oral phase of development.” If the patient exhibits behaviors supporting my theory, it is confirmed. If they show contrary behaviors, it is because they are denying their oral fixation. Either way, my theory is correct.
  • Jonas Nightingale (fraudulent faith healer in 1992 movie Leap of Faith): “I heal the sick and the lame…unless their faith isn’t strong enough!” If they are healed, it is because of my abilities. If they are not, their lack of belief is the problem, not my healing abilities.
  • Horoscopes and astrological readings that identify patterns but lack specificity regarding the connections between cause and effect. These predictions cannot be tested and thus cannot be falsified.

In other words, if a theory can never be tested or refuted, only supported, then it is nothing more than conjecture.

Why should we care (or even know about) falsificationism?

Without using falsificationism as a guide in our decision-making, we can fall prey to beliefs and people who give us narratives that will lead our decisions astray. In short, we will likely make bad decisions based on bad data.

Without the standard of falsification, any uninformed person seeking attention can declare something like, “The government controls the weather with laser beams.” They don’t have to give any specifics that can be observed and/or tested. They can simply accuse any naysayer of being manipulated by a cabal or sedated by chemtrails. Their theory is always right.

Beware of any assertion that can never be proven wrong. Once we accept a viewpoint, a belief, or a theory, we are loathe to release it. We don’t want to be wrong.

Our beliefs, even when discredited, persist and influence our decision-making.

For example, Sigmund Freud’s theories were not falsifiable, not terribly useful in clinical settings, and yet are still popular today.

Why do we stubbornly hold onto false beliefs?

One explanation for the persistence of falsified beliefs is a cognitive shortcut that we all use called confirmation bias.

Confirmation bias is our tendency to surround ourselves with information and people who confirm our established beliefs and values.

Detrimental effects of Confirmation Bias:

  • We are overconfident in our beliefs and defend them in the face of contrary evidence (i.e., belief perseverance)
  • We inaccurately recall or misremember evidence that challenges our assumptions
  • Our opinions become more extreme as we selectively expose ourselves to increasing amounts of confirmatory evidence (i.e., attitude polarization)
  • We reinterpret neutral, ambiguous, or even contrary evidence to further support our accepted theories

Humans are fallible creatures whose brains seek understanding, control, and comfort in a complex, ever-changing environment. Everyone is at risk of confirmation bias.

How to make better decisions:

  • Be aware of the Pollyanna Principle, our tendency to believe things that make us feel good and reject thoughts that are uncomfortable. Embrace discomfort.
  • Engage in exploratory thinking. Analyze and consider multiple points of view. Make lists of the pros and cons of your choices.
  • Practice metacognition. Think about how you are thinking, especially when pressured to decide quickly. Confirmation bias thrives under pressure.
  • Recognize that social media algorithms amplify confirmation bias. They create a false perception of consensus.
  • Adopt a contrary viewpoint “just for the sake of argument.” Play the proverbial Devil’s Advocate in conversations with others and yourself.
  • Approach discussions as a learner, not as an expert. Learners ask good questions. Experts continually plan what to say next. Learners make more informed decisions.
  • Practice adversarial collaboration. Intentionally work with people who have opposing viewpoints to solve problems and advance understanding.

Thinking is hard. Decisions are hard. Adulting is hard. As much as we should love and appreciate our beautiful brains, we must also recognize its foibles and shortcuts that can lead us toward unproductive thought patterns, behaviors, and emotional states.

Thank you for hanging in here to the end of this dense and geeky post. Times are a bit weird right now. It is my goal to help you navigate any weirdness you may be experiencing.

And as always, I do this with love, respect, and desire for your success.

Take good care of you,

Melissa

3 Comments

  1. Charlie Collins

    One of the most profoundly valuable of the many valuable contributions from an amazingly valuable woman in our world

    Reply
  2. Neil Goodenough

    A particularly insightful message. I had never before heard of the concept of falsifiability as a requirement for verifying a theory, but I am beginning to see how this makes sense.

    Thank you for another helpful post

    Reply
  3. Julie Bestry

    Fascinating. Innately, we can recognize a situation such as you describe where “if it works, it’s my skill; if it fails, it’s your lack of faith/appreciation/whatever.” But you’ve given us a clear, if mind-blowing rubric and a way to “check ourselves before we wreck ourselves” in order to make better decisions.

    Adversarial collaboration? Like Lincoln’s team of rivals? It takes some pretty fancy metacognition to think about why you’re picking yes-men and yes-women to get to where you can have that adversarial collaboration, but you’re right, it usually yields more powerful ideas.

    And “Approach discussions as a learner, not as an expert?” This reminds me of the slightly more pithy (and goofy) Ted Lasso: “Be curious, not judgmental.” Good stuff, Doc, as always!

    Reply

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