Programmed to Deceive

I’ll be visiting Kigali, Rwanda this week as one of the judges of the grand finale of the DataHack4FI Hackathon. The event brings together aspiring teams of data scientists and programmers from across the African continent. In preparing for the hackathon, I asked an ex-entrepreneur (she gave up her venture for the relative comforts of a corporate job), what lessons she might have for other budding entrepreneurs. She answered without hesitation and with bitterness borne of experience, “Be prepared to face the truth."

Our brains are wired to deceive. Like an overprotective parent, our minds conspire to keep us safe by reducing the terrors and vagaries of the world to a more palatable and humdrum set of heuristics. The problem is these are sometimes wrong and in business, this can have devastating effects.

Buster Benson writing in Better Humans, has put together an impressively comprehensive Cognitive Bias Cheat Sheet. Here are a few of them that we recognise in our work with clients and you may recognise them too.

We find stories and patterns even in sparse data: We’re inclined to believe a personal testimony,  especially if it comes from someone we trust or respect, rather than try to understand complex data and variation across a continuum. Executives in particular, never have the luxury of having the full story. They have to make decisions everyday on incomplete, incorrect or non-existent data. The temptation to give credence to anecdotes is high.

We project our current mindset and assumptions onto the past and future: We’ve seen on more than one occasion bankers shy violently away from considering the cloud as a viable application and storage option, claiming it to be ‘unsafe’. This is in spite of their on-premise environment being so porous that they are one moderately determined fraudster away from a major security breach.

We’re motivated to complete things that we’ve already invested time and energy in: While IT is critical to an organisation and absolutely has to be got right, we often find that the weight of expectation placed on complex, long-dated IT fixes, makes organizations oblivious to the real benefits that can be gleaned relatively quickly, from smarter use of their data assets. 

We are drawn to details that confirm our own existing beliefs: Given the pace at which technology is driving societal change and upending existing business models, this is a particularly dangerous existential fallacy. Homogenous teams feel easier - but easy is bad for performance.  In some organizations we’ve seen, there is a startling disconnect between executives and workers in terms of what each believes about the organisation. Time to think about using data to get near real-time organizational ‘temperature checks’ as opposed to the much loved, but ponderous annual employee satisfaction survey. 

Interestingly enough, we can use these same biases - and there are many more of them - to increase our own awareness of how our brains trick us, and thereby be better equipped to see the world as it really is. Facing the truth can be hard. The alternatives however, are much worse.

Contact Ixio Analytics for bias-free advanced analytics and insights.

DataHack4FI is an initiative of insight2impact and supported by its partners.