The return to the office needs to be accompanied by a radically new outlook from employers and employees so that we avoid falling into the same patterns of behaviour that in the past led to poor decision-making.
Nobel prize-winning author and psychologist Professor Daniel Kahneman told the BBC on Radio 4’s Start the Week this morning that as workers returned to the office it was essential to improve our evaluation of behaviour and understand the discordance between actions and words.
Financial journalist Gillian Tett, meanwhile, explored how using anthropological approaches would improve our reasoning at work in the post-lockdown era.
Wherever there is judgement there is noise and more of it than you think” – Prof Kahneman
Kahneman introduced the concept of “noise”, the subject of his latest book, which he describes as the variability in decisions made by people. Investigating to what extent decisions were uniform he studied the work of insurance firms’ underwriters, who when given with the same facts often came to completely different conclusions to those that the company’s executives had expected, much to their surprise. To further illustrate this he used a US study of 208 judges who were presented with the same 16 cases. One would have expected, he said, the judges to broadly agree what the sentences should be in the cases. But despite an average of seven years there was wide divergence of more than three years in sentencing decisions. “Wherever there is judgment there is noise and more of it than you think,” he said.
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Similar studies had shown decision-making to be similarly random in other spheres, said Kahneman. Physicians tended to give different kinds of decisions when presented with the same symptoms at different times of day, with more antibiotics being prescribed in the afternoon. Temperature also affected decision-making with judges passing more severe sentences on hot days. He described this variability, or noise, as “unacceptable” and something businesses needed to tackle as they reset after lockdown. Like bias, it led to unnecessary errors.
One of the reasons why noise was so prevalent in organisations was because the amount of agreement in meetings was “much too high” because of the pressure for conformity from the leader or the person who speaks first or most confidently. As a result, decisions in meetings often did not “reflect the true diversity of opinion around the table”. Instead, people should be invited to share their own judgments prior to meetings “so people are aware of the amount of noise that they must bridge to reach a consensual decision”.
Recruitment was “really troubled” by noise, said Kahneman. A single person making decisions about candidates was usually convinced they were making the right decision, because they were unaware of noise, he said. When you have multiple people making the hiring decision it was vital to have independence. Independence was key if you wanted to gauge authentic judgments and opinions free of external influences. Both noise (variable error) and bias (an average bias) contributed equally to inaccurate decisions, he added.
Algorithms and simple rules were noise free, said the professor. If they were unbiased, using algorithms would improve decision-making, he said. “When algorithms are biased it is somebody’s fault …the person who made them. But they should be noise-free. Algorthmic bias is attracting a lot of attention but people in many ways were even more biased. People are both biased and noisy,” he told the programme.
We’ve fooled ourselves that business is all about numbers, balance sheets and data sets” – Gillian Tett, FT journalist
Listening to Kahneman was Ann Cairns, executive vice chair of Mastercard. She said that “noise” had led to far too few women being appointed to senior positions. Simply by maintaining independence from the hiring decision-making process and asking HR managers why so few women were being recruited or promoted and requesting that they reflect on their own thought processes she was able to reflect positive change.
Author of new book Anthro Vision and US managing editor of the FT Gillian Tett was also involved in the discussion. She described the return to the office as “an extraordinary opportunity to rethink our assumptions and notice things we never noticed before”. Citing the Chinese proverb “fish can’t see water”, Tett told BBC Radio 4 today that anthropology offered methods of improving decision-making and of avoiding the mistakes of the past. “Lockdown has shaken up everything,” she said, adding that office workers would “feel like Martians landing on Earth for the first time. “Look around you and try to see the things that you didn’t used to talk about,” she said.
A trained anthropologist herself, Tett explained how attending a financiers’ conference in France 15 years ago was analogous to attending a wedding ritual among tribal peoples in Tajikstan. She said: “You have a tribe of bankers using rituals and symbols to reinforce their world view and their social networks. The problem comes when the unstated assumptions take over and prevent people from seeing what’s hidden in plain sight.”
The “problem” in this case was the global financial crash of 2008, which Tett was one of few to correctly predict.
“Anthropology makes the familiar look strange and the unfamiliar look familiar,” she said. She noted how Kit Kat sales in Japan had surged for reasons unknown to manufacturer Nestlé. It transpired that students were using Kit Kats as a good luck symbol in exams. “People were interpreting Kit Kats in different ways.” Such findings had led to organisations now using anthropologists to analyse themselves and global markets.
Tett said that as people returned to offices it would be wise for leaders to reflect on the nature of meetings. Some people thought meetings were called merely to rubber stamp decisions, she said, others thought they were for forming a consensus. At General Motors an anthropologist was brought in to find out why teams were not agreeing on progress about a new car design. “It was because the three groups involved each had a different view of what meetings were for,” she said.
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“We’ve fooled ourselves that business is all about numbers, balance sheets and data sets,” Tett added. “We ignore what the word ‘company means’. We all assume ourselves as rational with individual agency and linear thoughts. But our choices are affected by the people are around us and a much wider context that we don’t always see. Fish can’t see water.” She warned that as people became re-immersed in the company culture back in the office that wider context which may have appeared more visible during lockdown would be ignored.
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