In major corporate decisions, a devil’s advocate can serve an invaluable function. The advocate can help stress test an idea and point out cognitive biases that others might miss. The big idea is put on trial. Executives who proposed the idea serve as defense attorneys. The devil’s advocate is essentially the prosecutor. She looks for weaknesses in the other side’s case and serves up an alternative narrative. She also helps the team protect against the down side. The advocate helps us make the decision right — using a balanced process that tends to dampen major biases.
All too often, however, the process devolves into “decision theater”. We’re just playing roles that don’t improve the decision process but do make us feel better about it. Here’s how I’ve seen it play out in various software companies:
I certainly respect people who play the devil’s advocate role. To make this more than theater however, organizations need to change the process. How? Well, let’s look at the history of the devil’s advocate.
The Catholic church originated the role of the devil’s advocate in 1587. The advocate plays a key role in the process of canonization — determining whether a person should be declared a saint. The process includes a trial, with one side arguing that the person does indeed deserve sainthood. The other side — led by the devil’s advocate — argues the opposite. The devil’s advocate aims to poke holes in the other side’s argument, For instance, the advocate might claim that the miracles attributed to the person were actually frauds.
From my perspective, the most important element was that the church gave the advocate resources and respect to fulfill the role effectively. The devil’s advocate had resources — time, money, staff — to call on. This differs greatly from devil’s advocates in today’s corporate world, who may speak up but are not institutionally supported. A corporation that wants to debias its decision processes should do what the Catholic church did — institutionalize the role and provide enough support to make it serious.
Over the past several years, I’ve written several articles about cognitive biases. I hope I have alerted my readers to the causes and consequences of these biases. My general approach is simple: forewarned is forearmed.
I didn’t realize that I was participating in a more general trend known as debiasing. As Wikipedia notes, “Debiasing is the reduction of bias, particularly with respect to judgment and decision making.” The basic idea is that we can change things to help people and organizations make better decisions.
What can we change? According to A User’s Guide To Debiasing, we can do two things:
I’ve been using a Type 1 approach. I’ve aimed at modifying the decision maker by providing information about the source of biases and describing how they skew our perception of reality. We often aren’t aware of the nature of our own perception and judgment. I liken my approach to making the fish aware of the water they’re swimming in. (To review some of my articles in this domain, click here, here, here, and here).
What does a Type 2 approach look like? How do we modify the environment? The general domain is called choice architecture. The idea is that we change the process by which the decision is made. The book Nudge by Richard Thaler and Cass Sunstein is often cited as an exemplar of this type of work. (My article on using a courtroom process to make corporate decisions fits in the same vein).
How important is debiasing in the corporate world? In 2013, McKinsey & Company surveyed 770 corporate board members to determine the characteristics of a high-performing board. The “biggest aspiration” of high-impact boards was “reducing decision biases”. As McKinsey notes, “At the highest level, boards look inward and aspire to more ‘meta’ practices—deliberating about their own processes, for example—to remove biases from decisions.”
More recently, McKinsey has written about the business opportunity in debiasing. They note, for instance, that businesses are least likely to question their core processes. Indeed, they may not even recognize that they are making decisions. In my terminology, they’re not aware of the water they’re swimming in. As a result, McKinsey concludes “…most of the potential bottom-line impact from debiasing remains unaddressed.”
What to do? Being a teacher, I would naturally recommend training and education programs as a first step. McKinsey agrees … but only up to a point. McKinsey notes that many decision biases are so deeply embedded that managers don’t recognize them. They swim blithely along without recognizing how the water shapes and distorts their perception. Or, perhaps more frequently, they conclude, “I’m OK. You’re Biased.”
Precisely because such biases frequently operate in System 1 as opposed to System 2, McKinsey suggests a program consisting of both training and structural changes. In other words, we need to modify both the decision maker and the decision environment. I’ll write more about structural changes in the coming weeks. In the meantime, if you’d like a training program, give me a call.