What is Decision Bias and how to Avoid Data-Driven Blunders 🤦

Did the last news article you read reconfirm what you had suspected all along? No, this may not be a case of great intuition. You might just be another victim of confirmation bias.

What is decision bias?

Decision bias is the selective filtering and interpreting of information to confirm one’s preconceived notions. Simply put, it’s the cherry-picking of information to suit our assumptions conveniently.

This is a deadly bias we all succumb to every day. And, it is one of the most common reasons for bad business decisions.

Steve Ballmer said, “There’s no chance that the iPhone is going to get any significant market share. No chance.”

With a firm belief in the steady rise of personal computers and the proven dominance of Microsoft in this space, any evidence to the contrary must have felt like an inconvenient outlier.

The Microsoft team chose the information they wanted to believe in until it was too late. They lost the opportunity to extend their dominance to the mobile ecosystem.

Are data-driven decisions safe from confirmation bias?

No! If anything, people who embrace data-driven decisions suffer the worst consequences due to this bias. In an ideal world, one uses data to evaluate assumptions and find new patterns. This helps them arrive at conclusions which can then lead to sound decisions.

But that’s not how most people operate. They do it in reverse.

People jump to conclusions based on their beliefs. They then look around for data to support their assumptions. That way, their faulty decisions are now backed up by data. This is decision science done reverse – I like to call these “data-driven blunders”!

You can convince an average individual to revisit their assumptions. It’s almost impossible to win over someone who has systematically arrived at the wrong decision.

“Some people use data analytics the way a drunk uses a lamp post – for support rather than illumination.” – Andrew Lang

How do you tackle confirmation bias with data science?

To solve confirmation bias, never begin with the data. Start by critically examining your beliefs. Get into the mindset that your assumptions could be wrong. Seek out evidence based on your opinion but with the primary intent of disproving it.

As Sherlock Holmes would say, “Once you eliminate the impossible, whatever remains, no matter how improbable, must be the truth.”

Here are three steps to question your assumptions and eliminate the impossible:

1. Look for unusual data: We often ignore some data because we don’t value it. Or worse, we might avoid data because it makes us uncomfortable. Start collecting them.

2. Scout for unusual insights: This well-rounded data is useful only if you look for insights with an aim to disprove your beliefs. Look out for big, useful, and surprising insights.

3. Craft them into unusual stories: Insights alone don’t move people to action. You need visual stories. Make the correct conclusions leap out and hence hard to ignore.

The first step to fighting confirmation bias starts by knowing that it always lurks in the background. Be willing to question your assumptions.

Remember, data is a great sidekick but a poor boss! Use data the right way, and it can turn into a great ally in your fight against cognitive biases.