Cognitive Bias


I’ve always done reasonably well in school, that is why it was a shock when I received a D- on a paper I had written. Now it wasn’t my favorite class (administrative law) and only counted as a small percentage of my overall grade. I went through the expected cycle: shock, denial, anger and depression. I then, as usual, began looking for the underlying reason, not only to my abysmal grade, but why I, and others it turns out, reacted with such emotional clamor and oh yes there was clamor.

The reason for the mental distress is the same reason a crushing defeat at the last minute in football stings so much or why movies that lead you through a spectacular build-up and fall flat with a mediocre ending leave you dejected. It is called the peak-end rule, a mental heuristic we all possess. Take the case of Yahoo researcher, Cameron Marlow,

In the case of my vacation, the last high-point of my time in Europe was in Florence, followed by one brief day in Copenhagen. Not that there’s anything wrong with Denmark, but that day ends up coming up in more of my conversations than the rest of the trip because that is how memory works (that and blood jello is really, really disgusting). If you’re planning any trips soon, make sure to end on a high note, because you will be the one telling the stories.

In my situation, the feeling that everything was going well was partially rooted in the lack of direction and expectations set by the professor. When the grades were received, those who misinterpreted the scope of the assignment were obviously distressed. Since these concerns were addressed with the professor following this initial assignment, everyone proceeded with a clear understanding going forward.

Unfortunately higher education is not the only place this lack of common direction exists, supervisors and managers are guilty of the same actions. Goals are poorly set with few guidelines, leading to an atmosphere were employees become complacent or pursue the wrong development plans. Some managers go so far as to ask employees to set their own training objectives with little support, then chastise them when they fail to live up to the internal expectations the manager initially had conceived but failed to communicate. When a performance review is finally conducted, generally every six months, employees are left confused and irritated with diminished morale.

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To say that I like Google’s products is an understatement. From GMail to Google Earth, they have all made my life a little easier. When the Mountain View based company was given the Fortune Best Place to Work honor earlier this year I can’t say I was too surprised, that was until I read the list of do’s and don’ts for getting hired.

Do

1. Go to Stanford, Harvard, or MIT. though Google has relaxed its GPA standards of late – and now considers candidates with less than a 3.7 average – be prepared to discuss any B’s you may have earned.

2. Stress how well you get along with others. Unlike some companies that tolerate lone wolves, Google (Charts) wants team players who’ll gladly work cheek by jowl with their teammates.

3. Talk about your many diverse interests (“I fly-fish! And love chess! And breed water buffalo!”) Narrow interests or skills are a big time turnoff at Google.

4. Be prepared to get up at a whiteboard and write software code during your interview. Brush up on “bit twiddling,” by the way. Really.

Don’t

1. Joke about the whole Don’t Be Evil thing. Googlers take their goodness very seriously.

2. Go on and on in your interview about the doctoral project that you didn’t bother building or trying to commercialize. Google likes doers, not thinkers

3. Talk about money. they’ll think you’re just trying to get rich. Even though you probably are, it’s something you’re not supposed to discuss out loud

4. Mention the competition. in its eyes, everything at Google is sui generis. Other than programming languages, if it wasn’t invented at Google, it’s not worth discussing.

This is a dangerous philosophy with which to lead a company. Once an organization begins neglecting outside ideas, more commonly known as Not-Invented-Here (NIH), it cuts itself off from a significant source of knowledge and makes itself susceptible to groupthink. Of course with a target share price of $550 they can afford to be a little picky, but let’s hope they learned the lessons from some of their brethren at Apple and IBM, among others, who fell victim to the same sense of invulnerability in the 1980’s and 1990’s.

Related Articles:

Can Anything Stop Google?

Thanks for reading and making this one of the best weeks yet.

01/22/2007 – Cobra didn’t need a doomsday device to be G.I. Joe

01/23/2007 – Loss of Talent and America’s Decline

01/23/2007 – Worst HR Ever

01/23/2007 – Steve Jobs and Options: Beyond Selfishness?

01/25/2007 – More Bad HR – All Your Information Are Belong to US

Corporate scandal is once again becoming vogue, whether it is accounting irregularities that topple entire companies, large executive golden-parachutes for sub-standard performance, or backdating of stock options.

Apple said in December that it would take an $84 million charge for misdating more than 6,400 options. It said an internal review found two questionable options awarded to Jobs but no wrongdoing by current management, including the CEO.

Inevitably there are scores of individuals stymied by what is characterized as greed, selfishness (which apparently can be measured now), even an improper entitlement filled childhood. All of this generally followed by criminal probes, class-action lawsuits, and a sense of general malaise by the time the verdict is read. But one must ask, are these characterizations correct, is it a simple case of narcissism, did they watch the movie Wall Street one too many times, or is something deeper at work, and better would we make the same decision in their place?

– Motivational Biases –

People often hold conflicting preferences, and the basis of this conflict is the difference between “want” and “should” (Bazerman, 2002). A party goer, being on a diet, knows they ‘should’ avoid the buffet, but wants some chips and salsa. People know they ‘should’ drive the speed limit, but ‘want’ to get home earlier. Executives know they should report all income received, but want a bigger bank account. It seems to indicate in a variety of situations the should self is always a positive attribute, however, it may be to conservative, risk averse, or timid to do the right thing. It is recommended that individuals develop a compromise between their want and should selves to avoid the potential conflict that could arise. During New Years thousands of people make resolutions to diet and loose weight. Typically after two-weeks they regress to their old patterns and pull into McDonald’s because they did not allow for their want self to have any position in their life.

– Positive Illusion –

Most people see themselves, the world, and the future in an unrealistically sustainable positive manner. These positive illusions can be summed up in the following four descriptions:

  1. Unrealistically positive views of self,
  2. Unrealistic optimism,
  3. The illusion of control,
  4. Self-serving attributes (Bazerman, 2002).

Individuals will see themselves as better than others with brighter futures. These narcissistic tendencies often give the impression of control in uncontrollable situations and cause an overwhelmingly large share of credit to be taken for positive outcomes and distancing from negative ones. Consider the results from a Hudson survey regarding managers opinions of themselves relative to that of their subordinates.

Nearly all managers (92 percent) consider themselves to be an excellent or good boss. However, the latest Hudson survey found that employees do not necessarily agree, as only 67 percent rate their managers favorably. In fact, ten percent of workers say their boss does a poor job.

There is a great discussion as to whether or not positive illusion is a healthy endeavor. In the a laboratory stress-challenge paradigm, is was found that high self-enhancers had lower cardiovascular responses to stress, more rapid cardiovascular recovery, and lower baseline cortisol levels (Taylor, Lerner, Sherman, Sage, and Mcdowell, 2003). Life, however, does not take place in a laboratory. Positive illusion and unrealistic optimism can lead to excessive risk taking and those who underestimate their risk are routinely less likely to show interest in taking preventative action (Schneider, 2001). Individuals with strong self-illusions fall into the trap that “it will never happen to me.” Smokers, for example, are less likely to quit because they believe the probability that they will get cancer or emphysema is small. Perhaps this is the same line of thinking that afflicts many corporate executives when facing the prospect of larger bonuses and severance packages. Although they may face the risk of federal investigators and trial; it definitely explains the smile.

(Left to Right: Steve Jobs – Apple, Bob Nardelli – Home Depot, Ken Lay – Enron)

A few weeks ago, following ABC’s Primetime Basic Instincts special, I posted an article related to our inherent nature for ‘good deeds,’ or reciprocal altruism.

Rooted in our own evolutionary psychology, this concept can be related to game theory (which was featured last week on the same program) and the prisoner’s dilemma model. In this scenario a person will cooperate with another based on the other persons last action.

Today researchers from The Duke University Medical Center announced they have found one of the principle regions of the brain which predicts the propensity for a person to exhibit altruism or selfishness.

Altruism – the tendency to help others without obvious benefit to oneself – appears to be linked to an area called the posterior superior temporal sulcus.

News such as this is surely to raise some questions as to whether our actions are governed more by nature than nurture; the subject of debate which extends into our political and social lives. It is important to remember however that our innate qualities are in constant interaction and adaptation with the environment around us, forcing a constant evolution between our genes and culture.

01/14/2007 – Raging Ants: Culture Commitment and Teams

01/15/2007 – The New Young Manager – Culture & Failure

01/17/2007 – The Signal and Privacy – Personal Paparazzi

01/18/2007 – Telecommute at Your Own Risk

01/19/2007 – 10 Minute Movies Part 2

– To Telecommute or Not to Telecommute –


According to this post on Slashdot,

“Over 60% of 1,320 global executives surveyed by executive search firm Korn/Ferry International said they believe that telecommuters are less likely to advance in their careers in comparison to employees working in traditional office settings. Company executives want face time with their employees, the study said.”

Despite this possibility, a significant number of survey respondents, 48 percent, indicated they would consider employment that involved telecommuting with 78 percent believing that those who telecommute are more productive than the traditional office based employee. Productivity aside, why is it that employee who work remotely are less likely to advance in their careers?

– Social Intelligence and Recency –


There are principles coming into play with regard to telecommuting, one being social intelligence, the other reaches back to our cognitive biases, the recency effect. With the concept of Social Intelligence we take social cues from being in contact with one another, making eye contact and observing body language. This is why some find speaking on the phone so difficult, why we needed to create emoticons for email and why virtual environments and instant message programs result in increased instances of flaming. Whereas the recency effect, that results from disproportionate salience of recent stimuli or observations, comes into play around the time of evaluations. Consider the following story.

I have a colleague whose company is currently undergoing a merger. As with any merger there is expected to be a duplication of tasks, meaning layoffs. The company practices a matrix form of management which means he reports to both a project manager and functional manager. Under this system he is constantly monitored by his project manager, however his semi-annual and annual evaluations are conducted by the functional manager, which resides in a different location on campus. During a recent performance review he was told he needs to get in more face time, indicating a majority of his work went unseen. Although he has been instrumental in his department, his appraisal is based on what the supervisor has observed over the past month that she had assumed the supervisor role.

– Communicate, Communicate, Communicate –

Though working in a traditional office setting, the principle applies equally to telecommuting. I am personally in favor of working remotely. With the proliferation of information technology there is no reason that many jobs may not be performed just as well, if not better, from home or the local Starbucks as they can be in the office. The real challenge is to increase communication channels with supervisors who are responsible for determining career advancement. This will not be a one-sided responsibility but instead an opportunity for both parties to work together to ensure achievements are recorded. Perhaps the promises of Web 2.0 technologies and enhanced video conferencing will provide the answer to this dilemma.

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