Expose Leadership Behavioral Biases using Team Business Simulations

Article by Ken Thompson, 06 Apr 2017

Dominos

Behavioral Economics (BE) is the discipline of explaining why we do what we do. BE attempts to explain why we are so frequently “predictably irrational” in our decision-making and it identifies a number of traps, known in BE as biases, which we frequently fall into as individuals or teams.   A short synopsis of some of the key biases in BE can be found here.

A longer and hilarious introduction to BE using illustrations from The Simpsons TV Show (and poor old Homer in particular) can be found here. One of the most dangerous biases in leadership is the Availability Bias which manifests itself in two ways:

Firstly if we are given new information then we automatically assume it is both important and relevant and are likely to give it more weight in our decision-making than the other information we already have.

Secondly if it is pointed out that we are missing some bit of information we automatically assume that this information is highly important and urgent and redirect all our energies into trying to find it. A key skill in leadership is “Filtering” and the Availability Bias, if not recognised and addressed, can seriously hamper this.

This can be very effectively shown in a business game if the teams are first asked to produce their strategy/game plan. Then in the course of the game they are constantly  fed with a series of news updates which they must react to. Many of these updates are about stuff which is outside their control and some of these are pure red herrings. Lack of filtering skills means a team can get blown off course and overly reactive to events rather than sticking to their strategy with some flexibility built in.

Recent research we have carried out into how teams perform in business simulations shows just how easily the Availability Bias can disasterously blow teams off strategy without them even realising it!

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