Category Archives: Thinking

Thinking

Ethnic Diversity Reduces “Groupthink,” Economic “Bubbles”

Despite progress in raising awareness about implicit bias and stereotypes, most people are less likely to trust recommendations and evaluations from people of different ethnic groups.

Sheen Levine

Sheen Levine

However, this bias may reduce the “herd mentality” that characterized recent price “bubbles” in U.S. housing and global financial markets, reported Columbia’s Sheen S. Levine, Evan P. Apfelbaum of MIT, Goethe University’s Mark Bernard, Texas A&M’s Valerie L. Bartelt, Edward J. Zajac of Northwestern, and University of Warwick’s David Stark.
They concluded that, “Diversity facilitates friction that enhances deliberation and upends conformity.”

Economic “bubbles” occur when the majority of traders, probably influenced by a type of “groupthink,” set inaccurate prices, leading to a mismatch between market prices and true asset values.

Irving Janis

Irving Janis

Groupthink can occur when three conditions interact, according to Yale’s Irving Janis:

  • Group Cohesiveness
    • Deindividuation,” when group cohesiveness becomes more important than individual dissenting views,
  • Group Structure
  • Context
    • Stressful external threats,
    • Recent failures,
    • Decision-making difficulties,
    • Moral dilemmas.
Scott E. Page

Scott E. Page

A mathematical model, developed by University of Michigan’s Scott E. Page and Lu Hong of Loyola University, demonstrated that a wider range of viewpoints leads to less groupthink and more balanced decisions.

Diverse groups ran into fewer “dead ends” in developing solutions than homogenous groups full of smart individuals, who tended to think similarly.

David A. Thomas

David A. Thomas

Likewise, additional experimental evidence by Georgetown’s David A Thomas and Robin J. Ely of Harvard confirmed that identity-diverse groups can outperform homogeneous groups.
Group errors depended on group member ability and member diversity, expressed in the formula:

Collective Accuracy = Average Accuracy + Diversity.

To test the impact of group diversity on market “bubbles,” Levine’s group constructed experimental markets in Singapore and Texas, USA, in which participants traded stocks to earn money.

Evan Apfelbaum

Evan Apfelbaum

More than 175 volunteers with backgrounds in business or finance were randomly-assigned to groups of six ethnically-homogeneous or ethnically- diverse participants.

Traders knew the ethnic composition of their groups, but they couldn’t communicate with each other.
In addition, their “trades” of dividend-paying stock during 10 rounds were anonymous.

Homogeneous groups set inflated selling prices, yet traders in those groups still bought the stock, resulting in increasing stock prices.

Mark Bernard

Mark Bernard

In contrast, traders in diverse groups refused inflated selling prices, so the stock price fell to approximately the price in an “ideal” market with “rational” traders.

When traders and other decision-makers come from similar ethnic, social, and attitudinal backgrounds, they tend to place undue confidence in others’ opinions and decisions, and tend not to subject them to rigorous analysis and scrutiny.

Valerie Bartelt

Valerie Bartelt

As a result, they may be more likely to accept prices and deals that deviate from actual underlying values.
Levine’s group concluded that “homogeneity…imbues people with false confidence in the judgment of coethnics, discouraging them from scrutinizing behavior.”

  • How do you mitigate “groupthink” in organizational decision-making?

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Confident Cluelessness = The Dunning-Kruger Effect + Ignorant Bliss

Stav Atir

Stav Atir

Most people overestimate their own expertise, and do not recognize their own incompetence.
previous blog post highlighted this metacognition phenomenon known as the Dunning-Kruger effect.

This effect has been demonstrated for people’s overestimates of their skills in grammar, emotional intelligence, logical reasoning, firearm care and safety, debating, and financial acumen.

Emily Rosenzweig

Emily Rosenzweig

More recently, the effect was demonstrated by Cornell’s Stav Atir and  Emily Rosenzweig of Tulane,  who asked volunteers if they were familiar with concepts like centripetal force and photon as well as fictitious terms including plates of parallax, ultra-lipid, and cholarine.

About 90% of participants claimed some knowledge of at least one of the nine fake concepts, and people who thought they were most knowledgeable also said they recognized more of the meaningless terms.

David Dunning

David Dunning

Atir and Rosenzweig concluded that poor performers lack insight about their lack of skill because they ”don’t know what they don’t know.”

Another verification of the Dunning-Kruger effect was replicated among volunteers who completed a logical reasoning task, an intuitive physics problem, a financial acumen challenge, and others presented by University of California San Diego’s Elanor Williams, Justin Kruger of NYU, and Cornell’s David Dunning.

Elanor Williams

Elanor Williams

Some people achieved perfect scores, and expressed confidence in their answers, yet those who achieved no correct answers expressed the same degree of confidence as the most able performers.

Both high and low achievers made judgments based on intuitive “rules,” so they felt confident based on having a clear, if inaccurate, rationale.
Williams’ team concluded, “Rule-based confidence is no guarantee of self-insight into performance.”

Justin Kruger

Justin Kruger

Another “cringe-worthy” example is financial illiteracy accompanied by high confidence in financial acumen among people who filed for bankruptcy.

More than 25,000 people rated their financial knowledge, then tested actual financial literacy in the 2012 National Financial Capability Study, conducted by the Financial Industry Regulatory Authority with the U.S. Treasury.
Of these, 800 respondents said they filed bankruptcy within the previous two years.

Not surprisingly, bankruptcy filers achieved financial knowledge scores in the lowest third of respondents, but they rated their knowledge more positively than financially-solvent respondents.
Nearly a quarter of the recently bankrupted respondents gave themselves the highest possible rating whereas only 13 percent of other respondents were equally confident.

Deborah Keleman

Deborah Keleman

Even 80 physical scientists at top universities provided a number of inaccurate purpose-driven (“teleological”) explanations about “why things happen” in the natural world, including:

  • “Moss forms around rocks in order to stop soil erosion,”
  • “The Earth has an ozone layer in order to protect it from UV light.”
Joshua Rottman

Joshua Rottman

Participants provided these explanations at their own speed or with ambitious time constraints.
When these professional scientists provided rushed explanations, they were twice as likely to endorse inaccurate purpose-driven rationales, reported Boston University’s Deborah Kelemen, Joshua Rottman, and Rebecca Seston.

Rebecca Seston

Rebecca Seston

In addition, scientists were equally likely as humanities scholars to endorse teleological arguments despite most physical scientists’ rejection of purpose-driven explanations for natural phenomena.

However, these results suggest that teleological propositions are a default explanatory preference among humans, and could explain their presence in myth and religion across cultures.

These results suggest that most people hold a positive view of their capabilities even when faced with contrary evidence.
However, some groups, such as women, may hold an unrealistically modest view of capabilities despite affirming feedback.
These biases in self assessment point to the importance of realistic recalibration of confidence, aligned with consensual feedback.

-*How do you minimize the risks of “Clueless Confidence”?
-*How can systematic underestimates of competence be reduced to increase “Realistic Confidence”?

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Comparative Rankings May Reduce Gender Bias in Career Advancement

Iris Bohnet

Iris Bohnet

An “evaluation nudge” is a decision framing aid that may reduce biased judgments in hiring, promotion, and job assignments, according to Harvard’s Iris Bohnet, Alexandra van Geen, and Max H. Bazerman.

Alexandra van Geen

Alexandra van Geen

Based on their research, they recommended that organizations evaluate multiple employees  simultaneously rather than each person independently.
This approach contrasts widespread practices like “Stack Ranking” (“Rank and Yank”), advocated by GE’s Jack Welch and critiqued in a previous blog post .

This approach is frequently used for hiring decisions, but less frequently when considering employee candidates for developmental job assignments and promotions.

Max Bazerman

Max Bazerman

Bazerman and Sally B. White, then of Northwestern with George F. Loewenstein of Carnegie Mellon, provided the original demonstration of preference reversals between joint and separate evaluation.

George F. Loewenstein

George F. Loewenstein

Lack of comparison information in separate evaluation typically leads people to rely on internal referents as decision norms, though these may be biased or stereotyped preferences, according to Princeton’s Nobel laureate Daniel Kahneman and Dale T. Miller of Stanford.

Dale T. Miller

Dale T. Miller

Additionally, lack of comparative referents can lead evaluators to rely on easily calibrated attributes, found University of Chicago’s Christopher K. Hsee.
Both of these shortcuts can lead to biased decisions, which may systematically exclude members of under-represented groups.

Christopher K. Hsee

Christopher K. Hsee

Still another problem is the “want/should” battle of emotions and preferences, outlined by Bazerman and Ann E. Tenbrunsel of Notre Dame, with Duke’s Kimberly A. Wade-Benzoni itheir provocatively titled article, “Negotiating with Yourself and Losing.”

Ann E. Tenbrunsel

Ann E. Tenbrunsel

They argue that the want self” tends to dominate when deciding on a single option because there’s less information and less need to justify the decision.
In contrast, the more analytic “should self” is activated by the need to explain decision rationales.

Kimberly Wade-Benzoni

Kimberly Wade-Benzoni

Bohnet’s team asked more than 175 volunteer “employees” to perform a math task or a verbal task, then 554 “employer” evaluators (44% male, 56% female) received information on “employees’” past performance, gender, and the average past performance for all “employees.”

“Employers” were paid based on their “employees’’” performance in future tasks, similar to managerial incentives in many organizations.
Consequently, “employers” were rewarded for selecting people they considered effective performers.
Based on information about “employee” performance, evaluators decided to:

  • “Hire” the “employees,” or
  • Recommend them to perform the task in future, or
  • Return to “employees” to the pool for random assignment to an employer.
Keith E. Stanovich

Keith E. Stanovich

The Harvard team found that “employers” who evaluated “employees” in relation to each other’s performance were more likely to select employees based on past performance, rather than relying on irrelevant criteria like gender.

Richard F. West

Richard F. West

In contrast, more than 50% of “employers” evaluated each candidate separately without reference to other “employees,” selected under-performing people for advancement.
Only 8% of employers selected under-performers when comparing “employees” to each other, and multiple raters for multiple candidates also tended to select the higher performing “employees.”

Team Bohnet suggested that people have two distinct and situation-specific modes of thinking, “System 1” and “System 2,” illustrated by University of Toronto’s Keith E. Stanovich and Richard F. West of James Mason University.

Keith Stanovich-Richard West System 1- System 2 ThinkingThese varied cognitive patterns can lead evaluators to select incorrect decision norms, leading to biased outcomes.

As a result, decision tools like the “evaluative nudge” decision-framing can reduce bias in hiring and promotion decisions, leading to a more equitable workplace opportunity across demographic groups.

-*What other evaluation procedures can reduce unconscious bias in performance appraisal and career advancement selection processes?

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Intrinsic Motives, not Positive Consequences Linked to Achieving Goals, Career Performance

Amy Wrzesniewski

Amy Wrzesniewski

Sustained effort toward a goal may be intrinsically motivated by personal commitment to a larger “mission.”
At the same time, goal-seeking activity may be extrinsically motivated by external rewards, counteracting intrinsic motivation’s positive impact on effective career performance.

Xiangyu Cong

Xiangyu Cong

This complex interaction of internal and external motives was investigated among more than 10,000 people admitted to the United States Military Academy (“West Point”) by Yale’s Amy Wrzesniewski, Xiangyu Cong, Michael Kane, Audrey Omar, and Thomas Kolditz, with Barry Schwartz of Swarthmore.

Michael John Kane

Michael John Kane

Wrzesniewski’s team considered the long-term impact of holding both intrinsic motives (desire to serve and protect citizens) and extrinsic motives (have a respected career) for attending West Point cadets on:

  • Promotion to commissioned officer rank,
  • Extending officer service beyond the minimum required period of 5 years,
  • Selection for early career promotions.
Audrey Omar

Audrey Omar

Cadets who were intrinsically motivated were more likely to accomplish these goals.
However, those who also reported extrinsic motivation were less likely to achieve these career distinctions.

Richard Koestner

Richard Koestner

A meta-analytic review of nearly 130 experiments by University of Rochester’s Edward Deci and Richard Ryan with Richard Koestner of McGill confirmed the undermining effects of extrinsic rewards on intrinsic motivation from childhood through adulthood.

Mark Lepper

Mark Lepper

People may report less intrinsic motivation when extrinsic rewards are available, a phenomenon called the “overjustification hypothesis”  by Stanford’s Mark Lepper, David Greene, and Richard Nisbett of University of Michigan.

Clark McCauley

Clark McCauley

People typically view their work as being intrinsically or extrinsically motivated:

  • Job, mostly extrinsically motivated
  • Career, some intrinsic and extrinsic motivation
  • Calling, intrinsically motivated by fulfillment from the work itself, resulting in greater satisfaction and better performance than the other two orientations, according to Wrzesniewski’s previous work with Schwartz, collaborating with Bryn Mawr’s Clark McCauley and Paul Rozin of Penn.
Paul Rozin

Paul Rozin

These results  empirically support long-standing philosophical guidance to find meaning in work rather than primarily focusing on positive consequences of goal achievement.

Thomas Kolditz

Thomas Kolditz

This is especially relevant because the U.S. Military employs extrinsic motive appeals in marketing messages to recruit cadets, suggesting that military services provides “money for college,” “career training,” and enables members to “see the world.”

However, extrinsic motives tend to be associated with less career recognition and tenure than those who find meaning in the organization’s mission.

-*How do you increase intrinsic motivation when extrinsic motivation may seem more appealing?

-*What elements make your work “a calling”?

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Perceived Diversity = “Like Me”

Christopher Bauman

Christopher Bauman

Judgments of “diversity” are rarely completely objective:  They are influenced by subjective elements, including  the rater’s racial and ethnic group.
People tend to rate a group as “diverse” when it includes members of the evaluator’s race, found University of California, Irvine’s Christopher W. Bauman, Sophie Trawalter of University of Virginia and UCLA’s Miguel M. Unzueta.

Sophie Trawalter

Sophie Trawalter

Almost 1900 volunteers from diverse racial groups rated headshots of a company’s six-person management team for its “ethnically diversity”:

  • Caucasian team” included six white headshots (100% white),
  • Asian team” showed four white and two Asian people (mirroring the 66% majority of white people in the U.S.),
  • “Black team” featured four white and two black people (66% white),
  • Asian + Black” team had four white, one black, and one Asian person (66% white).
Miguel Unzueta

Miguel Unzueta

Members of racial minority groups rated leadership groups as “more diverse” when they included members of their own racial group rather than members of other racial minority groups.

Participants rated groups as it “less racially diverse” when they did not include at least one member of their own racial group, and this “in-group representation effect” was stronger for African Americans than for Asian Americans.

Later, more than 1,000 volunteers read news articles about the prevalence of prejudice, then provided ratings.
They showed no “in-group representation” effect, suggesting that reading about how another minority group suffers from prejudice reduced raters’ self-referential evaluation bias.

These results indicate that people’s expectations affect perceptions of diversity.
Priming awareness and empathy for similar experienced encountered by other groups reduced in-group biases.

Jim Sidanius

Jim Sidanius

African Americans, compared with other groups, frequently are  judged as experiencing:

Felicia Pratto

Felicia Pratto

In contrast, Asian Americans tend to be attributed higher status and as a result, report less discrimination than other racial minority groups.

Andrea Romero

Andrea Romero

Despite this advantage, Asian Americans have a lower return on their investment in education than Whites, even though they achieve higher levels of education and income than other racial minority groups, reported University of Arizona’s Andrea Romero with Robert Roberts of University of Texas and another group led by UT colleague Myrtle P. Bell with David A. Harrison and Mary E. McLaughlin.

Myrtle P Bell

Myrtle P Bell

Higher levels of “diversity” have been linked to greater:

Valerie Purdie-Vaughns

Valerie Purdie-Vaughns

Separate studies by Columbia’s Valerie Purdie-Vaughns and Ruth Ditlmann, Claude M. Steele of Stanford, University of British Columbia’s Paul G. Davies and Jennifer Randall Crosby of Williams College confirmed these findings, as did related work by UCLA’s Jaana Juvonen and Sandra Graham with University of California Davis’s Adrienne Nishina 

Jaana Juvonen

Jaana Juvonen

Diversity is “in the eye of the beholder” because a team may appear more diverse to raters when the group’s composition aligns with the observers’ own characteristics.

-*How do you reduce personal in-group biases based on individual expectations and experiences?

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Creating Productive Thought Patterns through “Thought Self-Leadership”

Albert Ellis

Albert Ellis

Many leaders’ actions and decisions are influenced by internal commentaries and related judgments.
Often, these thoughts are self-critical, provoking apprehension and anxiety.

Aaron Beck

Aaron Beck

Cognitive Behavior Therapy, developed by University of Pennsylvania’s Aaron Beck, provides a systematic way to restructure sometimes irrational “self-talk“,  as do Albert Ellis‘s Rational-Emotive Behavior Therapy, and Stanford University’s David Burns‘ synthesis of these approaches.

David Burns

David Burns

Arizona State University’s Charles Manz and Chris Neck  translated these self-management concepts to managerial development.
They outlined a Thought Self-Leadership Procedure as a five-step feedback loop:

Charles Manz

Charles Manz

1. Observe and record thoughts,
2. Analyze thoughts,
3. Develop new thoughts,
4. Substitute new thoughts,
5. Monitor and Maintain new, productive thoughts.

-*What practices do you use to develop and apply productive thought patterns under pressure?

Chris Neck

Chris Neck

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Career “Planning” = Career “Improvisation”

Kathleen Eisenhardt

Planning is most suited to relatively certain circumstances in which processes and decisions are typically linear, argued Stanford’s Kathleen Eisenhardt and Behnam Tabrizi in their analysis of global computer product innovation.

In contrast, frequently-changing or uncertain conditions with many iterative modifications require improvisation coupled with frequent testing.

Behnam Tabrizi

In “VUCA world,” described by the U.S. Army War College as volatile, uncertain, complex, ambiguous environments, current career “planning” occurs under rapidly-shifting conditions more appropriate for an agile strategy.
As a result, it is increasingly difficult to meaningfully respond to the frequently-asked interview question: “What are your career plans for the next five years?

Iterative exploration, rapid prototyping/experimentation, and testing characteristic of agile development and design thinking are more suited for rapid changes in economic, political, and technology changes that affect known career paths.

Alison Maitland

Alison Maitland

Possible Futures of Work are investigated in three thought-provoking books:

-*When have you found it more useful to “improvise” instead of “plan” your career?
-*What are the benefits and drawbacks of career “improvisation”?

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