UNDERSTANDING THE PARETO PRINCIPLE (THE 80/20 RULE)

The Pareto principle states that for many outcomes, roughly 80% of consequences come from 20% of causes (the “vital few”). Other names for this principle are the 80/20 rule, the law of the vital few, or the principle of factor sparsity.

Management consultant Joseph Juran developed the concept in the context of quality control and improvement, naming it after Italian economist Vilfredo Pareto, who noted the 80/20 connection while at the University of Lausanne in 1896. In his first work, Cours d’économie politique, Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population. The Pareto principle is only tangentially related to Pareto efficiency. More generally, the Pareto Principle is the observation (not law) that most things in life are not distributed evenly. It can mean all of the following things:

The Uneven Distribution

What does it mean when we say that things aren’t distributed evenly? The key point is that each unit of work (or time) doesn’t contribute the same amount. In a perfect world, every employee would contribute the same amount, every bug would be equally important, every feature would be equally loved by users. Planning would be so easy. But that isn’t always the case.

The 80/20 principle observes that most things have an unequal distribution. Out of 5 things, perhaps 1 will be good. That good thing/idea/person will result in majority of the impact of the group. Of course, this ratio can change. It could be 80/20, 90/10, or 90/20 (the numbers don’t have to add to 100 even). The key point is that most things are not 1:1, where each unit of input (effort, time, labour) contributes exactly the same amount of output.

The Upside of the 80/20 Principle

When applied to life and work, the 80/20 Rule can help separate the vital few from the trivial many. For example, business owners may discover the majority of revenue comes from a handful of important clients. The 80/20 Rule would recommend that the most effective course of action would be to focus exclusively on serving these clients (and on finding others like them) and either stop serving others or let the majority of customers gradually fade away because they account for a small portion of the bottom line.

The 80/20 Rule is like a form of judo for life and work. By finding precisely the right area to apply pressure, we can get more results with less effort.

An Everyday Example – Home Cleaning 

Let us say we are cleaning our house. Some people might approach this by distributing their effort evenly across a variety of tasks, including dusting, vacuuming, and mopping each room. But this probably is not very efficient — it would take many hours to get everything done. The Pareto Principle tells us that 80% of how clean our house appears comes down to 20% of our cleaning efforts. Again, we don’t need to work out exactly what 20% of our cleaning looks like. But we do need to ask questions like:

We might conclude that giving the house a quick vacuum, clearing away the bulk of the clutter, and dusting down the main surfaces makes a huge difference. Or perhaps we figure that visitors will spend most of their time in the living room and dining room, so we will focus on them and only give other rooms a cursory clean? But giving every mirror a perfect polish and removing every speck of dust from the house might not make such a big difference to the overall result. 

The Downside of the 80/20 Principle

We get one, precious life. How do we decide the best way to spend our time? Productivity concepts will often suggest that we focus on being effective rather than being efficient.

Efficiency is about getting more things done. Effectiveness is about getting the right things done. In other words, making progress is not just about being productive. It’s about being productive on the right things. But how do we decide what the right things are? The 80/20 Rule states that, in any particular domain, a small number of things account for the majority of the results. The point is that the majority of the results are driven by a minority of causes. There is a downside to the 80/20 principle, and it is often overlooked. To understand this pitfall, here is a story.

A Story: Audrey Hepburn- A New Path

Audrey Hepburn was an icon. Rising to fame in the 1950s, she was one of the greatest actresses of her era. In 1953, Hepburn became the first actress to win an Academy Award, a Golden Globe Award, and a BAFTA Award for a single performance- her leading role in the romantic comedy Roman Holiday. Even today, over half a century later, she remains one of just 15 people to earn an “EGOT” by winning all four major entertainment awards: Emmy, Grammy, Oscar, and Tony. By the 1960s, she was averaging more than one new film per year and, by everyone’s estimation, she was on a trajectory to be a movie star for decades to come.

But then something funny happened- she stopped acting. Despite being in her 30s and at the height of her popularity, Hepburn basically stopped appearing in films after 1967. She would perform in television shows or movies just five times during the rest of her life. Instead, she switched careers. She spent the next 25 years working tirelessly for UNICEF, the arm of the United Nations that provides food and healthcare to children in war-torn countries. She performed volunteer work throughout Africa, South America, and Asia.

Hepburn’s first act was on stage. Her next act was one of service. In December 1992, she was awarded the Presidential Medal of Freedom for her efforts, which is the highest civilian award of the United States.

The Shortcoming of the 80/20 principle:

For a moment, let us all Imagine it is 1967. Audrey Hepburn is in the prime of her career and trying to decide how to spend her time. If she uses the 80/20 Rule as part of her decision-making process, she will discover a clear answer- do more romantic comedies. Many of Hepburn’s best films were romantic comedies. They attracted large audiences, earned her awards, and were an obvious path to greater fame and fortune. Romantic comedies were effective for Audrey Hepburn.

In fact, even if we take into account her desire to help children through UNICEF, an 80/20 analysis might have revealed that starring in more romantic comedies was still the best option because she could have maximized her earning power and donated the additional earnings to UNICEF.

Of course, that’s all well and good if she wanted to continue acting. But she didn’t want to be an actress. She wanted to serve. And no reasonable analysis of the highest and best use of her time in 1967 would have suggested that volunteering for UNICEF was the most effective use of her time. This is the downside of the 80/20 Rule: A new path will never look like the most effective option in the beginning.

Optimizing for the Past or the Future

Let us look at another example. Jeff Bezos, the founder of Amazon, worked on Wall Street and climbed the corporate ladder to become senior vice-president of a hedge fund before leaving it all in 1994 to start the company. If Bezos had applied the 80/20 Rule in 1993 in an attempt to discover the most effective areas to focus on in his career, it is virtually impossible to imagine that founding an internet company would have been on the list. At that point in time, there is no doubt that the most effective path—whether measured by financial gain, social status, or otherwise—would have been the one where he continued his career in finance.

The 80/20 Rule is calculated and determined by our recent effectiveness. Whatever seems like the “highest value” use of time in any given moment will be dependent on our previous skills and current opportunities. The 80/20 Rule will help us find the useful things in our past and get more of them in the future. But if we don’t want our future to be more of the past, then we need a different approach. The downside of being effective is that we often optimize for our past rather than for our future.

The Way Forward

Given enough practice and enough time, the thing that previously seemed ineffective can become very effective. We get good at what we practice. When Audrey Hepburn dialed down her acting career in 1967, volunteering didn’t seem nearly as effective. But three decades later, she received the Presidential Medal of Freedom—a remarkable feat she is unlikely to have accomplished by acting in more romantic comedies.

The process of learning a new skill or starting a new company or taking on a new adventure of any sort will often appear to be an ineffective use of time at first. Compared to the other things you already know how to do, the new thing will seem like a waste of time. It will never win the 80/20 analysis. But that doesn’t mean it’s the wrong decision.

Content Curated By: Dr Shoury Kuttappa

THE SCARCITY MINDSET: MEANING AND BEHAVIORS ASSOCIATED – (CHAPTER 02)

***Continued from Chapter 01 (Covered previously: Meaning, Progressive & Degenerative impact, Loss Aversion, Psychological Roots)

Link to Chapter 01:

THE SCARCITY MINDSET: MEANING AND BEHAVIORS ASSOCIATED – (CHAPTER 01)

Forms in which Scarcity Mindset may Manifest

A) Believing That Situations Are Permanent: . . . . . . . . . . We think “Well, that’s just the way it is” instead of changing our frame of mind and seeking out our own happiness. Thinking this way depletes our energy, harms our self-esteem, and makes life a burden in general. Nothing is permanent. There are moments in our lives that will take our breath away. An abundant mentality thinks this way and sees life as dynamic and mouldable; something that is ours to shape and make to our liking. Perhaps most importantly, an abundant mentality sees life as an adventure.

B) Using Thoughts And Words Of Scarcity: . . . . . . . . . . What we tell ourselves ultimately becomes an extension of us if left unchecked. When negative thoughts arise, which is quite natural, one way is to become an observer and refuse to engage with them. Everyone is afraid of rejection. However, a recent study from Stanford reports that people tend to overestimate their chances of being rejected. Furthermore, even if we do happen to get rejected usually it is just a matter of widening our pool and continuing along our path.  Rejection doesn’t happen as often as we tend to think—and even if does, it’s simply a matter of moving forward.

C) Comparison/ Being Envious Of Others: . . . . . . . . . . This kills gratitude and stokes the fire of scarcity. When it comes to bettering our circumstances, we can consciously choose to devote our time and energy towards doing so and not wasting it on envious thoughts and feelings. Comparing ourselves to other people is a sure-fire way to stay stuck. The truth is we have no idea what the financial situation of another person or business is. Furthermore, everyone’s definition of success is different. It is important that we define what success means to us so that we can act accordingly.

D) Not Being Generous: . . . . . . . . . . When one lives with a scarcity mindset, they are more apt to “skim off the top” with time, money, relationships, etc. These actions have unintended consequences and make it less likely to generate the positive effects that we seek in our own lives. If we believe in lack, by default, we believe in giving less of ourselves. This does not necessarily mean money, it also means being generous by smiling, saying kind words, investing our time in people, and simply serving a greater good.

E) Overindulgence: . . . . . . . . . . When one thinks in terms of scarcity, they are most likely to overeat, overspend and, in general, become more gluttonous. This is because of another temptation: instant gratification. When we think of money as a scarce resource, there is a tendency to use that resource for pleasure. But pleasure could reinforce the scarcity mindset that one already possesses.

For instance: Let us say that we are having a tough day, feel down on ourselves, and need something positive. We could do something constructive like spending some time with the family (abundance)…or…we could buy that new, cool gadget that we have wanted with our credit card (scarcity). Here the abundant choice has absolutely nothing to do with money. We are focusing our time on what matters the most and not succumbing to some temporary pleasure that, while good for a time, does nothing more than add to the notion that we simply do not have enough.

F) There is too much competition: . . . . . . . . . .We live in an incredibly abundant universe, which means that there are plenty of clients, press opportunities, deals, contracts, blog readers and customers to go around. The best we can do is take care of our side of the street and focus on how our business serves people. Furthermore, we are living in a “share economy” where collaboration has taken centre stage. A classic example is AirBnB and Uber. The truth is this kind of economy, where people are sharing resources, talents, and skills rather than competing with one another, has opened the door for more opportunity within the markets.

G) There is not enough resources/ Economy is Bad: . . . . . . . . . .Lack of resources and funds stops people from doing a lot. Sometimes people use this as an automatic excuse out of fear. There is always someone making money regardless of the state of the economy. Those who curb their scarcity mentality are trained to see opportunity in everything. Many people found themselves in a position of having to create their own businesses because they could not find forms of traditional employment. We also have women starting businesses at a faster rate than ever before. Much of this came as a result of a bad economy.

It is like the old saying goes, Necessity is the mother of invention. It just so happens that often those inventions lead to abundance. In an effort to feel comfortable and secure, many would-be entrepreneurs forego creating businesses despite their desires because they feel like traditional employment is more secure.

Scarcity And Abundance Loops at Play (Using an example of Art)

Scarcity Mindset At Play (With Instances around us To Support Recognition)

Many organizations use psychological alteration to influence favorable decisions to maximize profit. Understanding how scarcity works allow us to be aware of such tactics and be prepared. Some examples of these are:

A) Time-limited scarcity: . . . . . . . . . In time-limited offers, the user needs to decide before a set deadline- this adds a sense of urgency to the decision-making process.

Instances: – – – – The most common real-life scenario is waiting until the last minute to complete projects/study for exams. In such cases, focus and attention levels increase and so does prioritizing. Flipkart indicates the count-down timer showing when the discounted price ends, which influences the user to grab the product deal before it expires.

B) Quantity-limited scarcity: . . . . . . . . .This is considered more powerful than time-limited scarcity, as availability depends on popularity or supply and is therefore unpredictable. This can be of the following types:

i) Limited Supply: – – – Items with limited supply are valued and desired more. Oil prices soar in countries like India due to limited supply, whereas the opposite is true in countries like Kuwait, Saudi due to availability. Amazon showcases “only 2 left in stock”, representing a product’s diminishing availability thus influencing the user to make the decision quickly.

ii) Popularity: – – –The popularity of an item represents the social proof that it must be good and valuable and triggers us to grab the deal. Myntra is used to showcase “18 people added this item to their cart” in their product page which informs the user that the product they are viewing is popular and might get over soon.

iii) Limited Supply and Popularity: – – – – This is more effective than the above two. Not only do we desire an item when it is scarce, but we also want it, even more, when we have to compete for it. Stamps and antique pieces are quite valuable because they are unique and cannot be easily supplied. People then outbid each other to possess the item which makes the value of the item increase significantly.Booking.com showcasing “only 6 rooms left” along with “6 people are looking at this moment”.

C) Access-limited scarcity:: . . . . . . . . .When access to certain information is limited, it is perceived as having higher value because of exclusivity, especially when it’s bound to social status.

Instances: – – – – Priority pass membership provides access to special airport lounges which include free complimentary food, alcohol, Wi-fi, and discounts on shopping. One Plus implemented an invite-only sales strategy which helped them create a great buzz in the market. People ‘lucky enough’ to be invited felt more privileged. This resulted in over 25 million visits to the site and close to a million sales in less than a year after launch.

D) Ban or Censorship:: . . . . . . . . .When anything interferes with our prior access to some item, we desire it more and want to have even more than before.

Instances: – – – – The ‘Romeo and Juliet’ effect highlights that the greater the parental disapproval of a relationship is, the more that relationship intensifies.

E) One-of-a-kind Special Events:: . . . . . . . . .‘Now or never’ scenarios. We seek to experience ‘once in a lifetime opportunities’, because of their unavailability later on.

Instances: – – – – Reliance Jio provided great introductory offers in India at the time of its launch which attracted a lot of customers. In Kanchipuram, the idol of Aththi Varadar is available for darshan once every 40 years for only a few days. Lakhs of devotees visit the temple to experience this once in a lifetime opportunity.

Ways to deal with Scarcity Mindset

Content Curated By: Dr Shoury Kuttappa

THE LONG VIEW (OR) BIG PICTURE THINKING – CHAPTER 02

***Continued from Chapter 01 (Covered previously: What Is Big Picture Thinking, Importance Of Big Picture Thinking, Detail Oriented Or A Big Picture Thinker- The Difference)

Link to Chapter 01:

THE LONG VIEW (OR) BIG PICTURE THINKING – CHAPTER 01

Identifying the Different Approaches – Approach Indicators

No matter which field we belong to – an aspiring entrepreneur, someone who’s putting together a dream team, or polishing our leadership skills, big picture thinking can help open up, innovative and unexpected creative paths, ideas and solutions.

Detail-Oriented Approach Indicators

• We prefer tweaking an existing plan than creating one from scratch
• We think over issues in such great detail that we sometimes miss the bigger picture
• We end up putting down or highlighting almost all notes
• We work towards high-quality work in most areas of our life and struggle with perfectionist tendencies
• We’re organized and/or like routine

Big Picture Approach Indicators

• We can easily spot patterns in problems
• We have a low tolerance for busywork, tedious errands, and routine
• We are good at figuring out an overview of strategies to get something done
• We get bored when we have to deal with the tiny details of a project
• People view us as incredibly creative and we like to come up with original ideas
• We don’t obsess over little details and therefore, solve problems fairly quickly

The Balance: Big Picture & Detailed Orientation- Components in Business

Strategies Towards a Big Picture Focus

A) Identify habits that limit our big picture thinking ability:. . . Our natural preferences often prevent us from blue sky thinking. So, the first step: break bad habits. Here’s a 3-step framework:

B) See things from a different lens: . . . Diving into big picture questions helps us connect the dots from our actions/tasks to the big goal. In this book, The Magic of Thinking Big, David J. Schwartz calls this, “see what can be, not just what is.” A good starting point is to ask ourselves, ‘what am I trying to achieve?’ Some big picture questions may be:

C) Think big by looking up: . . . The super basic rundown is that whenever we are focusing on the big picture, look up. And look down when not seeing the big picture.

A nice example of chunking reasoning is to think of transport. We can start with a motor car. If We chunk down, We might go to wheel, then rim, then rubber, then tread and even road. If We chunk up, We might go to transport, then to travel, then to vacation, then to wellbeing, etc.”

D)  Use bulleted lists to think big: . . . This is a trick many of use on a regular basis – making a bulleted list of the big picture and then adding sub-bullets to each pillar step. We can then step back and look at what can be added or removed from the sub-bullet pointers to keep the needle moving forward.

So why did this work? Because bullet points give us the visuals on the big picture. It’s challenging to connect the dots when we can’t see them. It’s also tough to translate the big picture if we don’t have it in front of us. What’s more, bullet points are easy to access and revise anytime. This, in turn, provides clarity.

E) Start journaling / mind mapping: . . . When we put our internal prattle on paper, we can easily spot where we are flailing or how it can be shaped to fit the bigger picture. To begin with, note down the big picture, followed by the small details pestering us. The trick is to make sure that it represents not only the big picture, but that it represents the detail, or actionable elements as well. Then record our thoughts to see if they deviate from the big picture plan. 

F) Schedule in some thinking time: . . . Often, when we rush to make a decision, we end up feeling sorry about it. When this happens, it’s usually for one of three reasons:

If we find ourselves nodding yes to any or all of these points, pencil in some uninterrupted, thinking time to our schedule. This space is crucial to making better decisions that rely on the big picture. We will also be able to rate our priorities better – what matters in the big picture, how it contributes to the big picture and so on. This will help us to stop hustling so hard, and ditch the shiny object syndrome.

Self Reflection- The Key

If we pause and contemplate how we are doing, we can make small tweaks that help us stay consistently productive. Some pointers to reflect on may be:

When we are busy executing any tasks in our lives for far too long, it’s easy to forget the details or the big picture depending on the type of thinker we are. For instance, as a big picture thinker, we may be excited by how our old and new ideas are connecting and work on outlining them, forgetting that the ideas have to be structured by many crucial details to work in the long term. The details person on the other hand might be buried in unending to-do-lists, feeling secure in the routines only to be disrupted by an enormous transition they didn’t anticipate.

Content Curated By: Dr Shoury Kuttappa

THE LONG VIEW (OR) BIG PICTURE THINKING – CHAPTER 01

Most people fall under either of the two main types of thinking paradigms- big picture or detail-oriented. The big picture thinker usually keeps coming up with ideas of what the ideal world would look like. The detail-oriented thinker on the other hand mostly thinks pragmatically and is organized.

A Story:

Around 1959 or 1960, Dashrath Manjhi, a laborer in India’s Gehlaur village lost his injured wife because the nearest hospital was about 45 minutes away. 22 years later, the same man had carved a 10-meter long path through the rocky ridge – all with a hammer and chisel – that chopped the travel time to 15 minutes.

Manjhi is an extreme example of seeing the big picture — instead of getting overwhelmed by the details of how he was going to get it done, he focused on the broader issue at hand: he didn’t want anyone else to suffer his wife’s fate. So, he worked tirelessly for years to prevent that from happening again.

What Is Big Picture Thinking?

Big picture thinking is the ability to grasp abstract concepts, ideas and possibilities. Big picture thinkers emphasize the system in which they are operating. This includes looking into various stakeholders such as customers, employees and investors but also competitors, social trends and future technological disruptions.

A big picture thinker is someone who mostly thinks of issues from a broader, overview-type perspective. When dealing with any project, they focus on the overall importance of the project and the major steps required to execute it. When big picture thinkers focus on details, they get tired easily. It’s the big picture that energizes and keeps them going. These types of people are often called visionaries or dreamers. They’re usually full of ideas, great at outlining how things could change, and what needs to be done to make the world a better place. Most inventors are big picture thinkers.

Imagine driving on the Howrah bridge at Calcutta (or any bridge). Do we look at the left and the right only? Hopefully not. We would have trained ourselves to cover both our left and right sides, as well as look far ahead in front of us. (If we only focused on a tiny word on the bumper sticker of the vehicle directly in front of us, we risk getting into an accident.) That’s essentially what big picture thinking is — looking at the entirety of a plan or situation.

Seeing the big picture means seeing the whole. The ability to comprehend the context of the matter and the system that is at work. We get to grips with the scope and focus on it, strategizing what will work and what will not. Put another way, big picture thinking is the ability to envision something.

In contrast, a detailed oriented person delves into the specifics of a project or process. In doing so, they may lose sight of the plan or the big picture. But, this does not mean that one thinking modality is right and another wrong. Instead, they are both necessary to function effectively.

The Importance Of Big Picture Thinking

“Take a step back”, “Look at the big picture”, “Think about it in the grand scheme of things”. These snippets of advice tend to go in one ear and out the other if we are naturally a detail-oriented person. Often, they can feel like a waste of time – why invest in all that fluffy thinking when there’s just so much to actually get done?

But scientific research has revealed that big picture thinking is linked to venture success for entrepreneurs. These entrepreneurs are 30-48% more likely to think in broad terms than the rest of us. It is not easy to encourage big picture thinking. It takes a ton of work and mental reminders such as, “how will this matter to me in 3 days, 3 years, 3 decades…” 

We might be wondering, ‘what is the benefit of having a solid idea of the big picture?’ While both big picture vs detail-oriented thinking are crucial, they also complement each other. Zooming in on the details only can be a bit messy to deal with. By thinking big, we are less likely to fret over the details that won’t matter in the long run. Not to mention, a big picture person is likely to see how an obstacle impacts the big picture and how that can turn into an opportunity – a real plus if we are leading a team.

Both big picture thinking and detail thinking are important. Anyone who is prone to be in one or other mode by default will limit their ability to contribute to the whole picture.

Detail Oriented Or A Big Picture Thinker- The Difference

We can get a better understanding of big picture vs detail-oriented when we look at them as “universal versus specific thinking.” Some common words and phrases are:

One way to find out whether we are a big picture thinker or a specifics’ person is seeing what we tend to focus on naturally. Do we look at the detailed ins and outs of a project? 

Perhaps we give so many details in our reports that our manager finds it annoying?

Or, do we tend to keep a bird’s eye view on things, and feel frustrated when working on projects where we can’t see how it connects to a broader plan? When we look closely, we see that both types of thinking are needed in a workplace.

***To be continued in Chapter 02 (Identifying the Different Approaches, The Balance: Big Picture & Detailed Orientation- Components in Business, Strategies Towards a Big Picture Focus, Self Reflection- The Key) Link to Chapter -02:

THE LONG VIEW (OR) BIG PICTURE THINKING – CHAPTER 02

Content Curated By: Dr Shoury Kuttappa

GOAL SETTING: ITS SYSTEMIC BEHAVIORAL IMPACT – CHAPTER – 02

***Continued from Chapter 01 (Covered previously: Case Studies on Goals going Awry, Inappropriate Calibration of Goals, Impact of Time Horizon on Goals,)

Link to Chapter 01:

GOAL SETTING: ITS SYSTEMIC BEHAVIORAL IMPACT – CHAPTER 01

Goals Becoming Too Challenging

Proponents of goal setting claim that a positive linear relationship exists between the difficulty of a goal and employee performance. Specifically, they argue that goals should be set at the most challenging level possible to inspire effort, commitment, and performance—but not so challenging that employees see no point in trying. This logic makes intuitive sense, yet stretch goals also cause serious side-effects like:-

Shifting Risk Attitudes:-> Goal-setting often distorts risk preferences. People motivated by specific and challenging goals adopt riskier strategies and choose riskier gambles than do those with less challenging or vague goals. Related literature has found that goals harm negotiation performance by increasing risky behavior. Negotiators with goals are more likely to reach an inefficient impasse than are negotiators who lack goals. A negotiator who has obtained concessions sufficient to reach their goal, will satisfies and accept the agreement on the table, even if the value maximizing strategy would be to continue the negotiation process. Clearly, in some domains, goal setting can significantly harm performance rather than promote better outcomes.

In the 1996 Mt.Everest disaster in which eight climbers died due to the decisions of the two team leaders is an example of destructive goal pursuit. On Mt. Everest, world-class high-altitude guides, Rob Hall and Scott Fischer, identified so closely with the goal of reaching the summit that they made risky decisions that led to their own and 6 of their clients’ deaths. Some warning signs of leaders who have become excessively fixated on goals may be:

Unethical Behavior:-> Goal setting has been promoted as a powerful motivational tool, but substantial evidence demonstrates that in addition to motivating constructive effort, goal setting can induce unethical behavior. Goal setting can promote two different types of such behavior:

First, when motivated by a goal, people may choose to use unethical methods to reach it. For example, at Sears (reference – case study from chapter 01), mechanics told customers that they needed unnecessary repairs and then performed and charged them for this unneeded work.

Second, goal setting can motivate people to misrepresent their performance level—in other words, to report that they met a goal when in fact they fell short. For example, in 1993, employees at Bausch and Lomb who were driven to reach sales targets reported sales that never took place. They falsified financial statements to meet earnings goals.

Goal setting, of course, is not the only cause of employee unethical behavior, but it is certainly an important, understudied ingredient. A number of factors serve as catalysts in the relationship between goal setting and cheating: lax oversight, financial incentives for meeting performance targets, and organizational cultures with a weak commitment to ethics.

The interplay between organizational culture and goal setting is particularly important. An ethical organizational culture can reign in the harmful effects of goal setting, but at the same time, the use of goals can influence organizational culture. Specifically, the use of goal setting, like “management by objectives,” creates a focus on ends rather than means. Goal setting impedes ethical decision making by making it harder for employees to recognize ethical issues and easier for them to rationalize unethical behavior.

Psychological Costs of Goal Failure:-> One problem embedded in stretch goals is the possibility that the goal may not be reached. In negotiations, for example, challenging goals can increase negotiation and task performance, but decrease satisfaction with high-quality outcomes. These decreases in satisfaction influence how people view themselves and have important consequences for future behavior. It was found that giving someone a challenging goal versus an easy goal on an attention task or an intelligence test improved performance, but left people questioning their concentration abilities and overall intelligence. These goal-induced reductions in self-efficacy can be highly detrimental, because perceptions of self-efficacy are a key predictor of task engagement, commitment, and effort.

Fostering  Collaboration and Learning in Goals

In order to adapt to a competitive landscape, organizations need employees who are able to learn and collaborate with their colleagues. Goals can inhibit both learning and cooperation.

Goals inhibit learning :->  When individuals face a complex task, specific and challenging goals may inhibit learning from experience and degrade performance. A person who is narrowly focused on a performance goal, will be less likely to try alternative methods that could help her learn how to perform a task. The narrow focus of specific goals can inspire performance but prevent learning.

“Learning goals” can be used in complex situations rather than “performance goals.” In practice, however, managers may have trouble determining when a task is complex enough to warrant a learning, rather than a performance goal. In many changing business environments, perhaps learning goals should be the norm. Even when tasks are complex enough to clearly warrant learning goals, managers face the challenge of identifying the specific, challenging goal levels for learning objectives.

Goals create a culture of competition :->  Organizations that rely heavily on goal setting may erode the foundation of cooperation that holds groups together. An exclusive focus on profit maximization can harm altruistic and other behavioral motives. Similarly, being too focused on achieving a specific goal may decrease extra-role behavior, such as helping coworkers. Goals may promote competition rather than cooperation and ultimately lower overall performance.

When Goals Harm Motivation Itself:-> As goal setting increases extrinsic motivation, it can harm intrinsic motivation – engaging in a task for its own sake. This problem is important, because managers are likely to over-value and over-use goals. Although people recognize the importance of intrinsic rewards in motivating themselves, people exaggerate the importance of extrinsic rewards in motivating others. In short, managers may think that others need to be motivated by specific and challenging goals far more often than they actually do. By setting goals, managers may create a hedonic treadmill in which employees are motivated by external means (goals, rewards, etc.) and not by the intrinsic value of the job itself.

Implementation and Calibration of Goals

Proponents of goal setting have long championed the simplicity of its implementation and the efficiency of its effects. In practice, however, setting goals is a challenging process, especially in novel settings.

Goal setting can become problematic when the same goal is applied to many different people. Given the variability of performance on any given task, any standard goal set for a group of people will vary in difficulty for individual members; thus, the goal will simultaneously be too easy for some and too difficult for others. Conversely, idiosyncratically tailoring goals to each person can lead to charges of unfairness. This has important implications, because employee perceptions of whether rewards fairly match effort and performance can be one of the best predictors of commitment and motivation.

When reaching pre-set goals matters more than absolute performance, self-interested individuals can strategically set (or guide their managers to set) easy-to-meet goals. By lowering the bar, they procure valuable rewards and accolades. Many company executives often choose to manage expectations rather than maximize earnings. In some cases, managers set a combination of goals that, in aggregate, appears rational, but is in fact not constructive. In reality, CEOs (and many Wall Street executives) face asymmetric rewards—a large bonus for meeting the goal in one year, but no fear of having to return a large bonus the following year for underperforming.

Harnessing the Power of Goals

Goals can inspire employees and improve performance as well. Just as doctors prescribe drugs selectively, mindful of interactions and adverse reactions, so too should managers carefully prescribe goals. To do so, managers must consider—and scholars must study—the complex interplay between goal setting and organizational contexts, as well as the need for safeguards and monitoring.

According to General Electric’s Steve Kerr, an expert in reward and measurement systems, “most organizations don’t have a clue how to manage ‘stretch goals’”. He advises managers to avoid setting goals that increase employee stress, to refrain from punishing failure, and to provide the tools people need to meet ambitious goals.

It’s one thing to know about goal setting, and how it can help us, but another entirely to know how to actually set goals and stick with them. Goal setting tools are a great way to help us set goals, keep track of, and stay focused on what we are trying to achieve. These tools can be informal, for instance:

There are several concepts and tools for Goal Setting. Which tool is right for us will depend on what our goals are, how long we want to take to achieve them, and whether it is an individual or group goal.

Here are some popular tools:

Content Curated By: Dr Shoury Kuttappa.

GOAL SETTING: ITS SYSTEMIC BEHAVIORAL IMPACT – CHAPTER 01

For decades, goal setting has been used as a tool for improving employee motivation and performance in organizations. Across hundreds of experiments, dozens of tasks, and thousands of people across four continents, the results are clear. Compared to vague, easy goals (e.g., “Do your best”), specific and challenging goals boost performance. Locke (1964) is credited with the very first Goal Setting Theory, where he focused on goal setting within the workplace.

He found that employees were motivated more by clearly set goals and actionable feedback to help them achieve those goals. Locke also found that motivation is key to achieving our goals, and we feel more motivated when we’re not 100% certain we can achieve the goal we’ve set for ourselves. Taking on challenges is highly motivational as it allows us to develop our skills, flex our problem-solving muscles, and gain a deeper sense of personal achievement.

But has the systematic harm caused by goal setting been largely ignored? When managers set targets for specific dimensions of a problem, they often fail to anticipate the broader results of their directives. Goals inform the individual about what behavior is valued and appropriate. The very presence of goals may lead employees to focus myopically on short-term gains and to lose sight of the potential devastating long-term effects on the organization.

Case Studies to Consider:

Consider Sears, Roebuck and Co.’s experience with goal setting in the early 1990’s. Sears set sales goals for its auto repair staff of $147/hour. This specific, challenging goal prompted staff to overcharge for work and to complete unnecessary repairs on a company-wide basis. Ultimately, Sears’ Chairman Edward Brennan acknowledged that goal setting had motivated Sears’ employees to deceive customers.

In the late 1990’s, specific, challenging goals fueled energy-trading company Enron’s rapid financial success. Enron’s incentive system was of paying a salesman a commission based on the volume of sales and letting him set the price of goods sold. Even during Enron’s final days, Enron executives were rewarded with large bonuses for meeting specific revenue goals. In sum, Enron executives were meeting their goals, but they were the wrong goals. By focusing on revenue rather than profit, Enron executives drove the company into the ground.

In the late 1960’s, the Ford Motor Company was losing market share to foreign competitors that were selling small, fuel-efficient cars. CEO Lee Iaccoca announced the specific, challenging goal of producing a new car that would be “under 2000 pounds and under $2,000” and would be available for purchase in 1970. This goal, coupled with a tight deadline, meant that many levels of management signed off on unperformed safety checks to expedite the development of the car—the Ford Pinto. One omitted safety check concerned the fuel tank, which was located behind the rear axle in less than 10 inches of crush space.

Lawsuits later revealed what Ford should have corrected it in its design process: the Pinto could ignite upon impact. Investigations revealed that after Ford finally discovered the hazard, executives remained committed to their goal and instead of repairing the faulty design, calculated that the costs of lawsuits associated with Pinto fires (which involved 53 deaths and many injuries) would be less than the cost of fixing the design. In this case, the specific, challenging goals were met (speed to market, fuel efficiency, and cost) at the expense of other important features that were not specified (safety, ethical behavior, and company reputation).

As these disasters suggest, the harmful effects of goal setting have received far too little attention in the management literature. Although prior research has acknowledged “pitfalls” of goal setting, we argue that the harmful side effects of goal setting are far more serious and systematic than has been acknowledged.

Calibration Of Goals

Advocates of goal setting argue that for goals to be successful, they should be specific and challenging. Countless studies find that specific and challenging goals motivate performance far better than “do your best” kind of goals. According to these findings, specific goals provide clear, unambiguous, and objective means for evaluating employee performance. Specific goals focus people’s attention; lacking a specific goal, employee attention may be dispersed across too many possible objectives. In turn, because challenging goals, or “stretch” goals, create a discrepancy between one’s current and expected output, they motivate greater effort and persistence. However, here are what can cause disarray:

When Goals Are Too Specific:-> Unfortunately, goals can focus attention so narrowly that people overlook other important features of a task (example – the Ford Motor Company Case). This focusing problem has broad application and direct relevance to goal setting.

When Goals Are Too Narrow:-> With goals, people narrow their focus. This intense focus can blind people to important issues that appear unrelated to their goal. Suppose that a university department bases tenure decisions primarily on the number of articles that professors publish. This goal will motivate professors to accomplish the narrow objective of publishing articles. Other important objectives, however, such as research impact, teaching, and service, may suffer. Consistent with the classic notion that you get what you reward, goal setting may cause people to ignore important dimensions of performance that are not specified by the goal setting system.

When Goals Are Too Many:-> A related problem occurs when employees pursue multiple goals at one time. People with multiple goals are prone to concentrate on only one goal. Related research suggests that some types of goals are more likely to be ignored than others. When quantity and quality goals are both difficult, people tend to sacrifice quality to meet the quantity goals. Goals those are easier to achieve and measure (such as quantity) may be given more attention than other goals (such as quality) in a multi-goal situation.

Impact of Time Horizon on Goals

Even if goals are set on the right attribute, the time horizon may be inappropriate. For instance, goals that emphasize immediate performance (e.g., this quarter’s profits) prompt managers to engage in myopic, short-term behavior that harms the organization in the long run. The efforts to meet short-term targets occur at the expense of long-term growth. Some companies are learning from these mistakes; Coca Cola announced in 2002 that is would cease issuing quarterly earnings guidance and provide more information about progress on meeting long-term objectives.

The time horizon problem is related to the notion that it can lead people to perceive their goals as ceilings rather than floors for performance. For instance, a salesperson, after meeting her monthly sales quota, may spend the rest of the month playing golf rather than working on new sales leads.

An excellent example of this problem comes from a study of New York City cab drivers. This study answers the age-old question of why it is so hard to get a cab on a rainy day. Most people blame demand: when it is raining, more people hail cabs than when the weather is clear. But as it turns out, supply is another important culprit. As a day progresses, cabs start disappearing more quickly from Manhattan streets on rainy days than on sunny days. Why? Because of the specific, daily goals that most cab drivers set: a goal to earn double the amount it costs them to rent out their cabs for a 12-hour shift. On rainy days, cabbies make money more quickly than on sunny days (because demand is indeed higher), hit their daily goal sooner, and then they go home (the problem of goals as ceilings).

This finding flies in the face of the economic tenet of wage elasticity, which predicts that people should work more hours on days when they can earn more money and less on days when they earn less. If NYC taxi drivers used a longer time horizon (perhaps weekly or monthly), kept track of indicators of increased demand (e.g., rain or special events), and ignored their typical daily goal, they could increase their overall wages, decrease the overall time they spend working, and improve the welfare of drenched New Yorkers.

***To be continued in Chapter 02 (Goals Becoming too Challenging, Fostering Collaboration and Learning in Goals, Implementation and Calibration of Goals, Harnessing the Power of Goals, Goal Setting Tools) Link to Chapter -02:

GOAL SETTING: ITS SYSTEMIC BEHAVIORAL IMPACT – CHAPTER – 02

Content Curated By: Dr Shoury Kuttappa.

INVERSION AS A CRITICAL THINKING APPROACH: BEHAVIOURS ASSOCIATED

The ancient Stoic philosophers like Marcus Aurelius, Seneca, and Epictetus regularly conducted an exercise known as a premeditatio malorum, which translates to a “premeditation of evils.” The goal of this exercise was to envision the negative things that could happen in life. For example, the Stoics would imagine what it would be like to lose their job and become homeless or to suffer an injury and become paralyzed or to have their reputation ruined and lose their status in society.

The Stoics believed that by imagining the worst-case scenario ahead of time, they could overcome their fears of negative experiences and make better plans to prevent them. While most people were focused on how they could achieve success, the Stoics also considered how they would manage failure. This way of thinking, in which we consider the opposite of what we want, is known as inversion. It is a rare and crucial skill that nearly all great thinkers use to their advantage.

How Great Thinkers Shatter the Status Quo with Inversion

The German mathematician Carl Jacobi made a number of important contributions to different scientific fields during his career. In particular, he was known for his ability to solve hard problems by following a strategy of man muss immer umkehren or, loosely translated, “invert, always invert.” Jacobi believed that one of the best ways to clarify our thinking was to restate math problems in inverse form. He would write down the opposite of the problem he was trying to solve and found that the solution often came to him more easily.

Inversion Vs Reverse Engineering

The Inversion Thinking concept finds its roots in how mathematicians solve complex problems. Look at any problem backward and turn the situation upside down to find the solution. Also, it is not to be confused with reverse engineering.

In reverse engineering we work backward from an achieved solution. For example, if we want to achieve a target of 10 customers, we need to submit 30 proposals, then to give 30 proposals we have to prospect 100 customers and for that every day we should meet 5 customers. This is simple reverse engineering, reversing from a positive result. But in Inversion Thinking, we consider the opposite of what we want. What if the opposite was true? What if I focused on a different side of this situation?

Inversion is a powerful thinking tool because it puts a spotlight on errors and roadblocks that are not obvious at first glance. What if the opposite was true? What if I focused on a different side of this situation? Instead of asking how to do something, we ask how to not do it. Great thinkers, icons, and innovators think forward and backward. Occasionally, they drive their brain in reverse.

This way of thinking can reveal compelling opportunities for innovation. Art provides a good example. One of the biggest musical shifts in the last several decades came from Nirvana, a band that legitimized a whole new genre of music—alternative rock—and whose Nevermind album is memorialized in the Library of Congress as one of the most “culturally, historically or aesthetically important” sound recordings of the 20th century. Nirvana turned the conventions of mainstream rock and pop music completely upside down. Where hair metal was flashy, Nirvana was stripped-down and raw. Inversion is often at the core of great art.

At any given time there is a status quo in society and the artists and innovators who stand out are often the ones who overturn the standard in a compelling way. In a way, the secret to unconventional thinking is just inverting the status quo. This strategy works equally well for other creative pursuits like writing. Many great headlines and titles use the power of inversion to up-end common assumptions.

Success is Overvalued. Avoiding Failure Matters More. This type of inverse logic can be extended to many areas of life. Avoiding mistakes is an under-appreciated way to improve. In most jobs, you can enjoy some degree of success simply by being proactive and reliable—even if you are not particularly smart, fast, or talented in a given area. Sometimes it is more important to consider why people fail in life than why they succeed.

The Benefits of Thinking Forward and Backward

Inversion can be particularly useful in the workplace. Leaders can ask themselves, “What would someone do each day if they were a terrible manager?” Good leaders would likely avoid those things. Similarly, if innovation is a core piece of the business model, we can ask, “How could we make this company less innovative?” Eliminating those barriers and obstacles might help creative ideas arise more quickly. And every marketing department wants to attract new business, but it might be useful to ask, “What would alienate our core customer?” A different point of view can reveal surprising insights. We can learn just as much from identifying what doesn’t work as we can from spotting what does. What are the mistakes, errors, and flubs that we want to avoid? Inversion is not about finding good advice, but rather about finding anti-advice. It teaches us what to avoid.

Some more ways in which inversion can come into play in work and life:

Project Management: . . . . . Failure Premortem. Imagine the most important goal or project we are working on right now. Now fast forward six months and assume the project or goal has failed. Tell the story of how it happened. What went wrong? What mistakes did we make? How did it fail? In other words, think of the main goal and ask, “What could cause this to go horribly wrong?” This strategy is sometimes called the “kill the company” exercise in organizations because the goal is to spell out the exact ways the company could fail. Just like a Premeditation of Evils, the idea is to identify challenges and points of failure so you can develop a plan to prevent them ahead of time.

Productivity: . . . . .. . Most people want to get more done in less time. Applying inversion to productivity we could ask, “What if I wanted to decrease my focus? How do I end up distracted?” The answer to that question may help us discover interruptions we can eliminate to free up more time and energy each day. This strategy is not only effective, but often safer than chasing success. This insight reveals a more general principle: Blindly chasing success can have severe consequences, but preventing failure usually carries very little risk.

Decluttering: . . . . . . . . Marie Kondo, author of the blockbuster best-seller The Life-Changing Magic of Tidying Up, uses inversion to help people declutter their homes. Her famous line is, “We should be choosing what we want to keep, not what we want to get rid of.” In other words, the default should be to give anything away that does not “spark joy” in our life. This shift in mindset inverts decluttering by focusing on what you want to keep rather than what you want to discard.

Relationships: . . . . . . . . .. . . . . What behaviors might ruin a marriage? Lack of trust. Not respecting the other person. Not letting each person have time to be an individual. Spending all of the time on kids and not investing in the relationship together. Not having open communication about money and spending habits. Inverting a good marriage can show us how to avoid a bad one.

Personal Finance: . . . . . . . . .. . . . .Everyone wants to make more money. But what if you inverted the problem? How could you destroy your financial health? Spending more than we earn is a proven path to financial failure. It doesn’t matter how much money we have, the math will never work out over time. Similarly, accumulating debt is a hair-on-fire emergency to be resolved as quickly as possible. And gradually creeping into unchecked shopping and spending habits can lead to self-inflicted financial stress.

Consider the Opposite

Inversion is counterintuitive. It is not obvious to spend time thinking about the opposite of what you want. And yet inversion is a key tool of many great thinkers. Stoic practitioners visualize negative outcomes. Ground-breaking artists invert the status quo. Effective leaders avoid the mistakes that prevent success just as much as they chase the skills that accelerate it.

Inversion can be particularly useful for challenging our own beliefs. It forces us to treat our decisions like a court of law. In court, the jury has to listen to both sides of the argument before making up their mind. Inversion helps to do something similar. What if the evidence disconfirmed what we believe? What if we tried to destroy the views that we cherish? Inversion prevents us from making up our mind after our first conclusion. Some more examples of Inversion Thinking Questions may be:

It is a way to counteract the gravitational pull of confirmation bias. Inversion is an essential skill for leading a logical and rational life. It allows us to step outside our normal patterns of thought and see situations from a different angle. Inversion is different than working backward or “beginning with the end in mind.” Those strategies keep the same goal and approach it from a different direction. Meanwhile, inversion asks you to consider the opposite of your desired result.

Content Curated By: Dr Shoury Kuttappa.

COGNITIVE BIASES: MANIFESTATION AND MITIGATION TECHNIQUES – (CHAPTER 02)

***Continued from Chapter 01 (Covered previously: Cognitive Biases and Debiasing, The Debiasing Process)

Link to Chapter 01:

COGNITIVE BIASES: MANIFESTATION AND MITIGATION TECHNIQUES – (CHAPTER 01)

Various Debiasing Techniques

There are a few general debiasing strategies (sometimes referred to as cognitive-forcing strategies), which can help deal with many of the cognitive biases. Many of these strategies are interrelated since the underlying principles behind them are similar.

A) Develop awareness of cognitive biases: . . . . . . . . . . . . . . . . . .>>  In some cases, simply being aware of a certain bias can help us reduce its impact. For example, consider the illusion of transparency, a cognitive bias that causes people to overestimate how well others can discern their emotional state, so that they tend to think that other people can tell if they are feeling nervous or anxious even in situations where that is not the case.

This happens because our own emotional experience can be so strong, we are sure our emotions ‘leak out.’ However, observers are not as good at picking up on a speaker’s emotional state as we tend to expect. What is inside of us typically manifests itself too subtly to be detected by others. We must relax and understand that if we become nervous, we will probably be the only ones to know.

B) Improve the way we present information: . . . . . . . . . . . . . . . . . >> This can affect the way people process it, and the same information, presented in two different ways to the same person, can lead to two very different outcomes. Accordingly, by modifying the way we present information to people, we can reduce the influence of certain cognitive biases.

The exact way in which this strategy can be implemented depends on the circumstances, and on the cognitive biases that we are trying to avoid. Presenting information in an optimal way, that encourages people to think through it rather than react intuitively, can go a long way toward mitigating various cognitive biases.

C) Favour simple explanations over complex ones: . . . . . . . . . . . . . . . . . >> This is rooted in the overkill backfire effect, which is a cognitive bias that causes people who encounter a complex explanation to reject it in favour of a simpler alternative, and to sometimes also reinforce their belief in the simpler alternative. When it comes to debiasing, simple explanations are often preferable to complex ones. This concept can be applied in many areas of the debiasing process, from how we think through past events to how we present information.

D) Slow down the reasoning process: . . . . . . . . . . . . . . . . . >> The benefit of doing this is that it allows to reflect on our reasoning process, and to think through alternative viewpoints, while also helping to avoid relying on biased intuitions. One way of encouraging this is to establish specific routines and protocols, which ensure that we slow down when necessary. Slowing down can help us reduce various cognitive biases, by enabling us to run an unrushed reasoning process, which is less influenced by our biased intuitions and emotional considerations.

E) Use nudges: . . . . . . . . . . . . . . . . . >> Nudges are simple modifications that are made to an environment to alter people’s behaviour in a predictable way, without forbidding any options or changing their incentives on a significant scale. This means that to count as a nudge, an intervention must be easy to avoid. For example, placing water bottles instead of soda cans near the register of a cafeteria counts as a nudge, while banning soda outright does not. Using nudges usually entails making changes to the people’s decision-making process, in a way that involves the implementation of other debiasing strategies.

One instance where nudges can be helpful is in the mitigation of the backfire effect, which is a cognitive bias that causes people to strengthen their support of their pre-existing beliefs when they encounter evidence which shows that those beliefs are wrong. This bias evident, for example, in the fact that when people are introduced to negative information about a political candidate that they favour, they often end up increasing their support for that candidate. One of the main ways to mitigate the backfire effect is to preface information that people might feel defensive about with questions that encourage them to process it.

F) Change incentives: . . . . . . . . . . . . . . . . . >> In theory, there are two parameters related to incentives that we can modify in order to reduce the likelihood of biased decision-making: –

1. . . . . . increase the benefits (positive feedback or rewards) of making a non-biased decision. 
2. . . . . .  increase the penalties (negative feedback or punishments) for making a biased decision. 

However, in practice, changing people’s incentives does not always work, and might even backfire in some cases, such as when people feel actively antagonized by the changed incentive structure. Since the effects of changing incentives are difficult to predict, it’s important to be wary if we are thinking about changing them as part of debiasing process.

G) Increase involvement in the decision-making process: . . . . . . . . . . . . . . . . . >> Increasing how involved people feel about a certain decision and how much they care about it can reduce certain cognitive biases. By ensuring that people care more about making an unbiased decision, we can make them more open to using various metacognitive strategies, which can help debias successfully.

There are many ways in which we can increase people’s involvement in the decision-making process. One of the main ones is to emphasize their role as active participants in their own reasoning process, and to encourage them to rely on conscious reasoning, as opposed to subconscious intuitions. In doing this, we can ask people to clearly outline and verbalize their reasoning process, which can help them identify gaps in their logic, and think in a more rational way.

H) Increase personal accountability: . . . . . . . . . . . . . . . . . >> When people know that they will be held accountable for their decisions and that their decisions will be scrutinized by others, they tend to put more effort into the decision-making process, which can sometimes help people mitigate certain cognitive biases.

I) Elicit feedback from others: . . . . . . . . . . . . . . . . . >> Receiving feedback from other people can help reduce certain cognitive biases. This is especially noticeable in the case of biases that influence people’s perception of themselves, such as the worse-than-average effect, which causes people to incorrectly believe that they are worse than other people at performing certain difficult tasks. However, when considering other people’s feedback, it is important to remember that they are also prone to various cognitive biases. Therefore, it is important to always be wary when deciding who to ask for feedback, and when deciding how to implement that feedback once we receive it.

J) Standardize the decision-making process: . . . . . . . . . . . . . . . . . >> Deciding to make our decisions in a standardized way can help ensure that we use all the necessary debiasing techniques that we need to go through an optimal decision-making process.

For example, the use of a simple mnemonic checklist was shown to help doctors apply important metacognitive strategies and make better decisions in a clinical context.

K) Create favourable conditions for decision making: . . . . . . . . . . . . . . . . . >> We can facilitate the debiasing process by improving the conditions in which you make decisions. While it is often difficult to make those conditions absolutely perfect, even minor changes can be monumental in helping improve our ability to make rational decisions.

1. Improve internal conditions. These are factors that reduce our cognitive capacity, such as sleep deprivation, as well as factors that increase our cognitive demands, such as multitasking.
2. Improve external conditions. These are factors that reduce our cognitive capacity, such as high noise levels, as well as factors that increase our cognitive demands, such as social pressure.

Bias-Specific Debiasing Techniques

There are also some debiasing techniques that are applicable in more specific cases. They can only help deal with a certain type of bias. The advantage of such techniques is that even though they are applicable in fewer cases, they can often be more effective than generalized debiasing strategies. Some of them are:

A) Reduce your reliance on subjective memory: . . . . . . . . . . . . . . . . . >>  Research shows that our memory of past events is subjective, malleable, and prone to various distortions.

For example, there is the rosy retrospection bias, which is a cognitive bias that causes people to recall past events in a way that is more positive than how they experienced those events in reality. This bias can, for example, cause us to remember a past vacation as having been more enjoyable than it really was.

One way to mitigate these issues is to reduce reliance on such memory, by using objective records to examine past events. The main advantage of this technique is that we are better at remembering where information is stored and how to retrieve it, than we are at remembering the information itself.

B) Consider alternative outcomes to past events: . . . . . . . . . . . . . . .. . >> This can also help deal with some of the biases that distort our view of these events. For example, the choice-supportive bias is a cognitive bias that causes people to retroactively ascribe more positive features and fewer negative features to an option that they chose. This bias can, for example, cause to justify a purchase that we made by overemphasizing the positive aspects of the item that we decided to buy. By considering alternative items that we could have purchased, we could potentially mitigate the choice-supportive bias, which could help view the purchase in a clearer, more unbiased way.

When doing this, our focus should be on trying to find a small number of highly plausible alternative outcomes. This is because, as we saw earlier, struggling to find a large number of alternative outcomes to an event can be counterproductive, and could actually hinder our ability to debias.

C) Create psychological distance: . . . . . . . . . . . . . . . . . >> Consider the spotlight effect, which is a cognitive bias that causes people to overestimate the degree to which others are likely to notice their actions or appearance, meaning that it causes people to assume that others are likely to notice it if they wear something embarrassing or say something stupid, even if that is not the case. We experience the spotlight effect because when we think about how other people see us, we tend to anchor their viewpoint to our own. Since we are so used to seeing things from our own perspective, we struggle to accurately judge how other people see us. One way to reduce the impact of this is to create psychological self-distance when we think about how other people view us. This entails trying to look at ourselves from a perspective that is different from our own, such as from the perspective of the person that we are talking to.

Creating psychological distance can also help fight against other types of biases. For example, the authority bias, which is the tendency to obey the orders of an authority figure, even when you believe that there is something wrong with those orders. One way in which people managed to cope with the authority bias was by increasing the physical and psychological distance between themselves and the authority figure. For instance, when the authority figure gave instructions through a phone, and was not in the same room as the person receiving the instructions, people were more likely to think rationally.

In Conclusion

It is important to keep in mind that different debiasing strategies will vary in their effectiveness and will have a different impact in different scenarios.

**Source Credits:

The book- The Art of Thinking Clearly -by Rolf Dobelli

The book- Predictably Irrational -by Dan Ariely
The book- The Illusion of Transparency and the Alleviation of Speech Anxiety -by Savitsky & Gilovich

The book- Nudge by -Richard H. Thaler & Cass R. Sunstein

Content Curated By: Dr Shoury Kuttappa.

COGNITIVE BIASES: MANIFESTATION AND MITIGATION TECHNIQUES – (CHAPTER 01)

Cognitive bias mitigation (or Debiasing) is the practice through which we reduce the influence that cognitive biases have on people, to enable them to think in a more rational and optimal manner. Cognitive biases are systematic patterns of deviation from rationality, which occur due to the way our cognitive system works. Cognitive biases affect us in various areas of our life, from the way we interact with others to the way that we form our political opinions. Since these biases cause us to think and act in an irrational manner, their influence can be detrimental, which is why people often want to be able to mitigate them.

Examples of Cognitive Biases

Cognitive biases can influence our thinking in diverse ways, including the undermentioned:

A) Cognitive biases can affect how we form impressions of other people: -. . .  For example, the halo effect is a cognitive bias that causes our impression of someone in one area to influence our opinion of that person in other areas. This bias can cause us to assume that a person is highly knowledgeable and has an interesting personality, simply because they are physically attractive.

B) Cognitive biases can affect how we acquire information: -. . . . For example, the ostrich effect is a cognitive bias that causes us to avoid situations where we might encounter information that we perceive as negative. This bias can cause us to avoid going to the doctor, if we believe that the doctor will have bad news for us, that we do not want to deal with.

C) Cognitive biases can affect how we prepare for the future: -. . . . For example, the pessimism bias is a cognitive bias that causes us to overestimate the likelihood that bad things will happen. This bias can cause us to assume that we are going to do badly on an exam, even if we are prepared for it and it is likely that we will do well.

Does Cognitive Debiasing Work?

Research shows that cognitive debiasing does work in some cases, and that proper training and interventions can help reduce certain biases. However, there are situations where it does not entirely work. For example, one study examined people’s optimism bias, when it comes to believing that one’s own risk of suffering from health issues is lower than that of others.

Despite attempts to correct this bias, the researchers found that people’s optimism bias persisted in the face of various debiasing interventions. This demonstrates that debiasing is not always straightforward and finding the appropriate debiasing techniques to use in a certain situation can sometimes be a difficult process.

Nevertheless, it is always ideal to function under the belief that debiasing might be effective. This means we should try and reduce cognitive biases where possible, as long as doing so is not associated with an excessive cost/ repercussion. It is important to be realistic when deciding on debiasing goals, and when we are assessing whether or not our debiasing attempts will be successful.

How To Debias: – Overview Of The Debiasing Process

There are several stages in the debiasing process.

First, a cognitive bias is triggered. Then, we must become aware of this bias, and realize that it has been triggered. Once we realize that the bias has been triggered, we must conclude if there is a need to debias and make a conscious choice and commit to debiasing. After (or if) we do choose to debias, we need to start by assessing the bias, which involves determining in what way the bias impacts us and (or) the people around us. Once we understand what we are dealing with, we need to select the appropriate debiasing technique and apply it. Once successfully debiased, we can now move on to make an optimal decision.

We can also add an additional step, by reassessing the situation after we apply the debiasing strategy, to determine whether the debiasing attempt worked. Else, we can repeat the previous step, and either implement a different debiasing strategy or attempt to implement the previous one again, until successful at debiasing.

Two things to be cautious of are:

a) It is often difficult to accurately assess whether or not we have debiased successfully.

b) Repeated debiasing attempts can often be difficult to implement in practice, especially if we are trying to debias someone else.

Exercising Metacognitive Strategies

Metacognition, which refers to the ability to be consciously aware of your thought process, stands at the core of cognitive-bias inoculation and mitigation. Metacognitive awareness aids in: –

a) being aware of the various cognitive pitfalls and errors that we might encounter when processing information and making decisions,

b) ensuring that we successfully identify cases where cognitive biases affect people,

c)  successfully applying the relevant debiasing strategies, and,

d) ensuring that we accurately assess how successful the debiasing attempts are.

Differences between different debiasing techniques

***To be continued in Chapter 02 (Various Debiasing Techniques for everyday situations)- Link to Chapter – 02:

COGNITIVE BIASES: MANIFESTATION AND MITIGATION TECHNIQUES – (CHAPTER 02)

*Source Credits:

1. The book- Thinking, Fast and Slow by Daniel Kahneman
2. The book- Nudge by -Richard H. Thaler & Cass R. Sunstein

Content Curated By: Dr Shoury Kuttappa.

FOLLOW THROUGH BEHAVIOURS: THE AKRASIA EFFECT

A brief story:

In the summer of 1830, Victor Hugo was facing an impossible deadline. Twelve months earlier, the French author had promised his publisher a new book. But instead of writing, he spent that year pursuing other projects, entertaining guests, and delaying his work. Frustrated, Hugo’s publisher responded by setting a deadline less than six months away. The book had to be finished by February 1831.

Hugo concocted a strange plan to beat his procrastination. He collected all his clothes and asked an assistant to lock them away in a large chest. He was left with nothing to wear except a large shawl. Lacking any suitable clothing to go outdoors, he remained in his study and wrote furiously during the fall and winter of 1830. The Hunchback of Notre Dame was published two weeks early on January 14, 1831.

Procrastination is usually a “yes” or “no” question”

For more conventional instances, consider addictive behaviour patterns or compulsive traits like over-shopping and blowing the budget, or manic media use; maybe even something like starting an argument one “knows” one will regret and that will lead to trouble or grief.

Having an explanation seems good because it suggests some kind of intervention based on that knowledge, but in some cases, it just doesn’t work. Yet we still feel the hypnotic pull toward explanations, even if the terms being explained are just accepted in a very uncritical way.

When we make a decision to do something or not, our brain usually has a “gut instinct” answer of yes or no, before the words even come out of the mouth. We consider what benefit it has first, and then what benefit it may have for another person. Then we consider other criteria like time, strength, and effort it will take before we actually decide what it is we are going to do. This all happens in a split second before we commit, and the answer comes out of the mouth.

Often, procrastination occurs when you have decided to complete a task, but you keep postponing until later without consciously choosing to do it then. Not all procrastination is bad procrastination. There are two types of procrastinators- active and passive.

Though you may be convinced by this that you are an active procrastinator the truth is most of us are actually passive procrastinators. We delay our work just because we can and with no justifiable reason.

Maybe it is better to try to “own” the behavior rather than blaming externals. So, it is not necessarily a useless idea. The concept of Akrasia is a sort of promise the executive self makes to itself about self-control and autonomy. And it is also the basis for promises one makes to other people about accountability, or rather, explanations for the occasional breakdown and exception.

The Ancient Problem of Akrasia
Human beings have been procrastinating for centuries. Even prolific artists like Victor Hugo are not immune to the distractions of daily life. The problem is so timeless, in fact, that ancient Greek philosophers like Socrates and Aristotle developed a word to describe this type of behavior: Akrasia.

Human behaviour is complex, and we interpret through a network of concepts which themselves are cultural and philosophical constructs. If the typical definition of “akrasia” is “weakness of will”, then what is will? If will is some vaguely defined power of “mind”, then what is mind? If mind is an active presence within “self”, then what is self? … and so on.

Akrasia is the state of acting against your better judgment. It is when you do one thing even though you know you should do something else. Loosely translated, you could say that akrasia is procrastination or a lack of self-control. Akrasia is what prevents you from following through on what you set out to do. Why would Victor Hugo commit to writing a book and then put it off for over a year? Why do we make plans, set deadlines, and commit to goals, but then fail to follow through on them?

Also, akrasia is loss of self-control, in the sense of action contrary to reason. In akrasia, there is an ingrained habit in an individual, of the non-rational elements of the soul subverting the rational capacities. Action is usually guided in a range of ways by reason. So akrasia is interesting because it involves a departure from a norm.

Why We Make Plans, But Don’t Take Action
One explanation for why akrasia rules our lives and procrastination pulls us in has to do with a behavioural economics term called “time inconsistency.” Time inconsistency refers to the tendency of the human brain to value immediate rewards more highly than future rewards.

When we make plans for ourself — like setting a goal to lose weight or write a book or learn a language — we are actually making plans for our future self. We are envisioning what we want our life to be like in the future and when we think about the future it is easy for our brain to see the value in taking actions with long-term benefits.

When the time comes to make a decision, however, we are no longer making a choice for our future self. Now we are in the moment and our brain is thinking about the present self. And researchers have discovered that the present self really likes instant gratification, not long-term payoff. This is one reason why we might go to bed feeling motivated to make a change in our life, but when we wake up, we find ourselves falling into old patterns. Our brain values long-term benefits when they are in the future, but it values immediate gratification when it comes to the present moment. This is one reason why the ability to delay gratification is such a great predictor of success in life. Understanding how to resist the pull of instant gratification—at least occasionally, if not consistently—can help you bridge the gap between where you are and where you want to be.

A Framework to Beat Procrastination

Strategy 1: Design your future actions.

When Victor Hugo locked his clothes away so he could focus on writing, he was creating what psychologists refer to as a “commitment device.” A commitment device is a choice we make in the present that controls our actions in the future. It is a way to lock in future behavior, bind us to good habits, and restrict us from bad ones.

There are many ways to create a commitment device. We can:

The circumstances differ, but the message is the same: commitment devices can help us design our future actions. The goal is to find ways to automate our behaviour beforehand rather than relying on willpower in the moment.

Strategy 2: Reduce the friction of starting.

The guilt and frustration of procrastinating is usually worse than the pain of doing the work. In the words of Eliezer Yudkowsky, “On a moment-to-moment basis, being in the middle of doing the work is usually less painful than being in the middle of procrastinating.”

So why do we still procrastinate? Because it is not being in the work that is hard, it’s starting the work. The friction that prevents us from acting is usually centred around starting the behaviour. Once we begin, it is often less painful to do the work. This is why it is often more important to build the habit of getting started when we are beginning a new behaviour than it is to worry about whether or not we are successful at the new habit.

We have to constantly reduce the size of our habits. We need to put all of the effort and energy into building a ritual and make it as easy as possible to get started. We need not worry about the results until the art of showing up is mastered.

Strategy 3: Utilize implementation intentions.

An implementation intention is when we state our intention to implement a particular behavior at a specific time in the future. For example, “I will exercise for at least 30 minutes on [DATE] in [PLACE] at [TIME].” There are hundreds of successful studies showing how implementation intentions positively impact everything from exercise habits to flu shots. It seems simple to say that scheduling things ahead of time can make a difference, but implementation intentions can make us 2x to 3x more likely to perform an action in the future.

Fighting Akrasia
Our brains prefer instant rewards to long-term payoffs. It is simply a consequence of how our minds work. Given this tendency, we often must resort to crazy strategies to get things done—like Victor Hugo locking up all of his clothes so he could write a book. But it is sometimes worth to spend time building these commitment devices if our goals are important to us.

Aristotle coined the term Enkrateia as the antonym of Akrasia. While akrasia refers to our tendency to fall victim to procrastination, Enkrateia means to be “in power over oneself.” Designing your future actions, reducing the friction of starting good behaviors, and using implementation intentions are simple steps that you can take to make it easier to live a life of Enkrateia rather than one of Akrasia.

Content Curated By: Dr Shoury Kuttappa.