Representativeness

Impact on LEADERSHIP AND BUSINESS

Treasure:

The “treasure” of the representativeness bias is that leaders may make decisions more quickly and confidently when they see similarities to past events, as they feel they have a good understanding of the situation. This can be especially useful in fast-paced environments where quick decisions are needed.

In business, representativeness can help in quickly assessing market trends or consumer preferences based on familiar patterns.


Risk:

However, the “risk” of the representativeness bias is that leaders may not consider all the relevant information or facts that are unique to the current situation. This can lead to making incorrect decisions or missing important opportunities.

Leaders may also miss critical differences between the current situation and previous situations, which could lead to a misapplication of their past experience.

In the early stages of a leadership selection process, a hiring executive may use a first impression of a candidate to quickly categorize them based on known patterns or experiences.

In a decision process, important or unique information may be ignored or disregarded if it doesn’t fit into known patterns or categories.

To identify this bias in a leader, look for signs of the leader relying solely on their past experience to make decisions, rather than considering all relevant information and data. When a leader is overly confident in their decisions and not open to considering alternative viewpoints or approaches, representativeness bias may be at play.


KNOW YOUR KNOTS - Learn to recognize when Representativeness Bias is taking the lead.

Ask yourself:

Do I easily conclude that a new situation resembles a previous experience or situation and then use the apparent similarity of the two as a reference point in my decision-making.

Am I quick to jump to conclusions?

Do I consider unique aspects of each situation, or do I rely on general patterns?

Have I missed opportunities or made errors in judgment due to my fixed beliefs?

How often do I seek additional information before making a decision?


STRATEGIES to manage this bias: Pause – Perspective – Practice - Progress

Pause:
Reflect on how you form opinions about people or situations. Are your opinions based on detailed analysis or initial impressions.

Consider your response to information or data that doesn’t align with your existing beliefs or experiences.

Assess whether you take time to understand the unique elements of a situation or if you categorize it based on familiar patterns.

Think about past decisions where representativeness bias might have led to poor outcomes.

Reflect on your decision-making process and whether you look for extra data to validate or challenge your initial assessment.

Reflect on your decision-making process and whether you look for extra data to validate or challenge your initial assessment.


Perspective:
Involve team members, stakeholders, and external sources with diverse backgrounds, viewpoints and experiences who can provide a broader range of insights, helping to counteract representativeness bias in a decision-making process.


Practice:

Challenge your assumptions by asking yourself why you believe something and whether there is data to support it.

Use critical and statistical thinking and base rates when evaluating probabilities or outcomes rather than assumptions based on representativeness.

Make a conscious effort to gather and consider all relevant information, not just what fits existing patterns.


Progress:
Make it a priority to develop an awareness of representativeness bias and how it can sway your thinking.

Develop bias awareness training programs to educate people across your organization about cognitive biases including representativeness bias to help mitigate this bias. Integrate critical thinking skills into these programs.