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Humans are naturally flawed when it comes to decision making. Our brains aren't wired to make evidence-based decisions at the speed and to the accuracy artificial intelligence can.
The increased use of HR (Human Resources) and payroll analytics in recent years demonstrates this by yielding good results for businesses.
What’s the difference between computers and the human brain?
Speed, accuracy, and impartiality. Computers can process information far faster and more accurately than a human brain. Even in uncertain situations, artificial intelligence (AI) will analyze large datasets in nanoseconds. This is then presented to decision makers in a format anyone can read. Decisions can then be made on this realistic view of the situation.
The result? Companies using AI remove all guess work. Instead, they use data driven facts for business decisions, resulting in goal hitting actionable outcomes. A vital competitive advantage.
When it comes to people, there are four behavioral factors that influence (hinder) the decisions we make — our values, personality, risk appetite, and propensity for conflict. We never come from point zero.
Conscious or otherwise we make decisions on desire. This was presented by Hans Rosling in his book, Factfulness: Ten Reasons We’re Wrong About the World — and Why Things Are Better Than You Think.
For his research, Rosling asked political and business leaders, researchers, journalists, UN officials, and other experts simple questions about a range of global trends. What he found was that a lot of what we believe to be fact is not based on empirical evidence, but on assumptions.
Why does our brain process data with bias?
It is how our brain works according to Hans Rosling, and this is backed by numerous neurologic and cognitive studies. The reality is our worldview is systematically biased, which is why it’s so important to have accurate data to correct it.
However, even when the data exists, and assuming it’s correct, meaningful, available, and understood, it doesn’t mean we "believe" it or will act upon it.
What makes our thought processes unreliable?
The flaws of our brain are related precisely to its greatest capabilities: the detection of shapes and patterns, causes, meanings, and intentions. Over the past 15 years, there has been much research into malfunctions and cognitive biases, which might alter our reasoning.
A further example of how we can be manipulated is in the book, The Mind Is Flat: The Illusion of Mental Depth and the Improvised Mind. In this book, author Nick Chater drew on research in neuroscience, behavioral psychology, and perception to demonstrate we have no hidden depths, and unconscious thought is a fantasy.
- Detection bias: Experiments prove our brain can detect only one word or one object at a time, while also detecting imaginary patterns.
- Confirmation bias: Considering only facts that confirm initial beliefs and ignoring contradictory information.
- Consistency and commitment biases: Demonstrating consistency to ourselves by reframing our memories, thoughts, opinions, preferences, and feelings on the spot when needed.
- Conjunction fallacy bias: Detecting coincidences everywhere, with the risk of associating independent events and ignoring probabilities.
- Proportionality bias: Difficultly accepting that an event could be random or an accident; the bigger the event, the bigger the need to make it meaningful and explain it to reduce anxiety.
- Illusion of explanatory depth bias: Believing that we have a good understanding of something (e.g., the basic principles of how our fridge works) but being unable to explain it in a consistent and detailed way, meaning that our understanding is very blurry.
Source: Nick Chater
Our brain is an improviser, and it bases its current improvisations on previous improvisations: it creates new momentary thoughts and experiences by drawing not on a hidden inner world of knowledge, beliefs, and motives, but on memory traces of previous momentary thoughts and experiences.
The Mind Is Flat: The Illusion of Mental Depth and the Improvised Mind
Why are humans so vulnerable to bias?
The above quote explains why humans are vulnerable to bias, and behave irrationally. However this also enables us to change and break free from previous behaviour or decisions.
In addition to structural biases are misconceptions that relate to the interpretation of statistics and figures. Once you’ve negotiated these instincts and have reached a conclusion based on facts and data, you still need to reach a collective agreement on the decision.
Is it possible for the brain to make data-based decisions?
Firstly, look at all steps needed to make a data-based decision. The data needs to be available once you decide what information you are searching for.
Complete, good quality data is needed as well as being meaningful and not misleading (which might impact the way you build your analytics). It also needs to be made available to the right people.
People viewing the data and/or analytics need to have the right set of skills to understand how they are built and what they mean.
Bias and misconceptions
There is little you can do to fix the biases ingrained in our brain. But being aware that thought processes are less reliable than we might think is a step in the right direction. It helps us be cautious during the decision-making process.
An eye-opening experiment run by Swedish experimental psychologist, Petter Johansson, demonstrated just how easily our opinions can be swayed in the lead up to political elections.
He asked a group of Swedish adults to answer questions on a range of political issues that tend to divide the population to the left or right. Their responses were written down and handed back to them except, you guessed it, they were not their actual answers.
78% of the reversed answers were not detected and just one defended their original answers opposed to those presented. After the experiment was revealed to them, most of the participants were convinced the written answers reflected their thoughts and more than a third intended to change their vote as a result.
By applying the basic act of magic (Johansson is an amateur magician), distraction, Johansson activates the phenomenon of "choice blindness". He then demonstrates the fallibility of the human brain in decision making.
Regarding "dramatic instincts" highlighted by Hans Rosling, the good news is that there are solutions. Keeping an eye on how data is laid out (showing where much of the data lies, being cautious with averages and the comparison of extremes) and embedding storytelling, which might be misleading.
As for the "negativity instinct" and the "straight line instinct," keep in mind that the information and/or what information we focus on might only be partial. That can help us consider alternative options.
The "size instinct" can be countered by comparing figures (stand-alone numbers are usually meaningless) and also by using rates rather than figures.
To avoid the "single perspective" effect, challenge your preferred ideas for weaknesses. Welcome new information, contradiction, and case-by-case problem solving rather than the one size fits all approach.
To overcome the "fear instinct" and "urgency instinct," the recommendation is to avoid taking an intuitive approach to what is risky. Systematically calculate risks, and take as few decisions as possible until you have full information. Always remember that true urgencies are/should be the exception.
Yes, it is possible for the brain to make decisions
The brain is a prediction engine. A recent study by the University of Oxford suggests “that even before events happen people estimate, in advance, whether they are likely to happen.
Data supports these predictions by means of investigation, such as observations, conversations, listening to people, and debating ideas. Firstly, you must decide which information/data to focus on.
There might also be considerations to add into the equation that data can’t always capture, for example:
- What will be the level of acceptance of the decision?
- Does it match our set of values?
- Is it possible to apply it in our legislative environment?
- Is it the right timing for this transformation?
- Is this how we want to shape our future?
As Hans Rosling concluded: "Though we absolutely need numbers to understand the world, we should be highly skeptical about conclusions derived purely from number crunching."
What are the benefits of automated data crunching in the workplace?
Computers can process information much faster than a human brain. The future of work must be agile. Nothing remains constant forever. Therefore, mid to longer term strategies must decide what is the correct combination of human and digital intelligence required. A computer alone can’t decide this!
