Did you know that decision making biases cost $359 billion annually?

Bias has a significant financial impact on businesses. For example, unconscious bias in the workplace, which can influence hiring, promotion, and daily decision-making, contributes to an estimated 359 billion dollar loss to the economy, due to the resulting conflicts and reduced productivity.1 Additionally, poor decision-making caused by cognitive biases, such as overconfidence and confirmation bias, can lead to costly mistakes, such as failed projects or misguided strategic choices. These biases not only affect organizational efficiency but also have broader implications for economic productivity.

Processing information quickly is crucial for decision-making and efficiency, especially in today's fast-paced environment, allowing us to navigate complex tasks with speed. However, our brains often rely on cognitive shortcuts, or biases, to simplify this process, which can lead to snap judgments that aren't always accurate.

While biases can help us process information faster, they also risk reinforcing stereotypes or misjudgments when left unchecked, underscoring the importance of both critical thinking and bias mitigation in personal and professional environments.

Balancing speed with accuracy helps ensure better, more inclusive outcomes.

According to Dr. Steven Jones, CEO of Global LeaderSHYFT, “If you have a brain, you have bias.” This shared condition creates challenges in our day-to-day lives – especially in the workplace. However, while scientists doubt we’ll ever be able to eliminate bias entirely, we are increasingly able to recognize and manage the way bias impacts our thinking.

Recognizing Implicit Bias in Decision-Making

Scientists call these shortcuts implicit biases, because they often happen outside our conscious thought. There are many types of bias. For instance, cognitive ease, is a bias where individuals default to decisions that feel easier or more comfortable, even if they’re not the best option. As BiasSync CEO Michele Ruiz puts it, “Brains don’t like complexity. They gravitate to what's easy.” In business, this could mean sticking with a familiar candidate over a more qualified but less familiar one, if it feels like a safer decision.

Another common bias is recency bias, where recent events or information disproportionately influence our decisions. According to Dr. Jones “in performance reviews, employees often focus on excelling in the last few months because that’s what their manager remembers most.” This kind of bias can disrupt equitable performance evaluations and undermine fair decision-making.

The Halo and Horn Effects in Diversity and Decision-Making

The halo effect and horn effect are two sides of the same coin, where we allow one positive or negative trait to overshadow everything else. In the workplace, the halo effect might manifest when a highly skilled individual contributor is assumed to be a natural fit for leadership, even if they lack the necessary people skills. Conversely, the horn effect might occur when someone makes a mistake early in their career and struggles to shake that negative perception, even if they’ve made significant improvements. Ensuring equity in how people are evaluated means avoiding these biases and looking at a person’s overall contributions.

Confirmation Bias: A Barrier to Behavior Change

Confirmation bias is one of the most pervasive obstacles to fair decision-making. It happens when we seek out information that aligns with our existing beliefs, disregarding data that challenges them. Dr. Jones shares an example of a CEO who ignored his team’s input on a candidate, insisting that his choice was correct despite evidence to the contrary. “He was so certain he was right; he couldn’t hear any feedback.” This type of bias not only stifles diversity of thought but also limits the potential for genuine equity within an organization.

Mitigating Implicit Bias: A Conscious Effort for Equity

Fortunately, there are ways to mitigate implicit bias and promote equity. The first step is awareness. Some experts recommend that leaders ask themselves critical questions, known as the Rule of Two, before making decisions: “What are two reasons someone might agree with this choice? What are two reasons someone might resist it?” This exercise encourages reflection and helps counter confirmation bias by allowing more diverse perspectives into the decision-making process.

In his work with high-performing organizations, Dr. Jones emphasizes the importance of staying curious. “We often rely too much on our initial instincts, but by asking more questions and challenging our assumptions, we can make more informed, balanced decisions,” he explains. Fostering a workplace culture where curiosity is encouraged can drive behavior change by ensuring a variety of viewpoints are considered.

Implementing objective data in decision-making processes is another effective way to reduce the influence of bias. Whether in hiring, performance reviews, or promotions, having clear, data-backed metrics ensures that decisions are made based on fact, not bias. Analyzing data across different demographics can help ensure equity. For example, if certain groups consistently report lower engagement or satisfaction, that’s a signal that implicit bias may be affecting those employees' experiences.

Overcoming Affinity Bias and Benevolent Bias in a Diverse Workplace

Affinity bias, or the tendency to favor people who are like us, can limit diversity and inclusivity within teams. Leaders need to actively seek out and value different perspectives, rather than defaulting to those who feel more familiar. This requires a conscious effort to embrace diversity and recognize the potential of employees from all backgrounds.

On the other hand, benevolent bias occurs when leaders make decisions based on what they think is best for someone else. For example, they might assume that a new mother wouldn’t want a demanding project that involves travel, without ever asking her. “It is tempting to make decisions for others without asking them,” Michele Ruiz notes, highlighting how this bias can limit opportunities for growth and undermine equity in the workplace.

Final Thoughts: Fostering Behavior Change and Equity in Decision-Making

Implicit bias is a natural part of how our brains function, but it doesn’t have to control our decisions. By becoming more aware of various biases—whether it’s recency bias, the halo effect, or confirmation bias—leaders can take steps to mitigate their impact.

To drive behavior change and create a more inclusive workplace, high performing leaders often implement objective measures, ask critical questions, and foster an environment that values diversity. Savvy leaders also work to foster certain personality measures that science shows mitigate the negative impacts of implicit bias, such as cognitive empathy and openness. By doing so, organizations can create equitable opportunities for all employees and build a culture where everyone can thrive.

If you are interested in learning more about BiasSync’s data-driven approach to equity and inclusion, you are welcome to contact the team. For specific strategies on data-based decision-making and the impact of implicit bias in the workplace, we encourage you to watch the full webinar.