How Cognitive Bias Threatens Product Success
The human brain is a vast storehouse of accumulated knowledge, memories, and experience. All these help us make countless decisions throughout the day. There is one major limitation to having all this information stored in our brains. It is that it introduces cognitive bias into our decision-making. Most importantly, anything that limits our ability to make good decisions can pose a genuine threat to our products’ success.
Reducing cognitive bias, therefore, becomes a critical business imperative.
Before we can overcome cognitive biases, we first need to understand what they are. Then we need to understand the role they play in our personal and professional decision-making. Lastly, we must know how to spot them early before they have a chance to influence undesirable outcomes.
In this post, we explore the impact of cognitive biases. Then we will discuss a few simple strategies you can implement to help you overcome your own biases as you strive to build better products.
What Is Cognitive Bias?
Cognitive bias is a preconceived notion about the world around us. This includes other people, things, situations that we often unconsciously use to make future judgments and decisions.
Whether we want to admit it or not, everyone has cognitive biases–even organizations. We all perceive the world differently. Meaning we see it based on our own unique set of preconceptions, experiences, and many other factors.
Think of cognitive biases as mental shortcuts (also called heuristics.) Cognitive biases help us quickly size up someone or something in the heat of the moment. They deliver quick assessments. But they tend to be subjective, simplified, limited, and prone to error.
“Cognitive biases are inherent in the way we think, and many of them are unconscious. Identifying the biases you experience and purport in your everyday interactions is the first step to understanding how our mental processes work, which can help us make better, more informed decisions.” (MasterClass: How to Identify Cognitive Bias)
Biases are often unconscious and deeply embedded in our thought processes. Because of this, they can be tricky to recognize and even trickier to change. But leaving them unaddressed can have devastating impacts on the decisions we make. Here’s why.
- Distort critical thinking
- Perpetuate misconceptions or misinformation
- Make accurate information elusive
- Lead to erroneous connections and patterns
- Lead to limited options or solutions
- Prevent us from seeing all available information
Reducing bias, therefore, helps us make better decisions. In turn, better, more informed decisions lead to better relationships and better products.
If you want to dig in further, here are 12 examples of cognitive bias.
Avoiding False Positives of Survivor Bias as a Product Manager
Survivor bias occurs when you act on data you have but don’t factor in unknown or missing data (i.e., the data you don’t have).
A popular example of survivor bias is illustrated by WWII bullet damage sustained by returning Allied aircraft. Yet, what isn’t represented here is the critical engine damage sustained by the plane that didn’t return.
In product management, survivor bias is often a result of concentrating on the most active customers. Those who tend to be the most vocal, and thus most visible and accessible. This type of bias can skew overly optimistic. This is because active, engaged users are more positive and engaged.
So the key to reducing survivor bias is to broaden and deepen your understanding of your customers. That is to say, reach out to a greater variety of customers, not just active ones. Ask yourself: What’s missing? What’s not represented in this data? Who haven’t I talked to? What point of view is absent? Above all, strive to view things from customers’ perspectives. Do this to create a complete picture of how products and solutions fit into their lives’ broader ecosystem. Certainly, consider their jobs and their environment.
Managing Reputational Risk
No company is free from reputation risk. To clarify, reputation risk is the potential loss of financial or social capital stemming from a company’s damaged reputation. Typically this is measured in lost revenue or increased costs.
According to the Harvard Business Review:
“Firms with strong positive reputations attract better people. They are perceived as providing more value, which often allows them to charge a premium. Their customers are more loyal and buy broader ranges of products and services.”
However, reputational risk also applies to product management. “In the context of product management, the absence of psychological safety creates reputation risk,” says Ken Sandy, former VP of Product at Masterclass. Attachment to a particular solution, personal ego, or even fear of an idea’s failure can all reduce risk-taking and objectivity. This has a great impact on good decision-making.
Product managers (PMs) can mitigate reputational risk and increase psychological safety. They can do this by cultivating a learning-focused environment. One that frames failure as an opportunity to learn and by identifying learning as the desired outcome. “As product leaders, it’s powerful when we can say, ‘I’m wrong,’” Sandy says.
Don’t Forget Who You’re Building for
Remember, you’re not building your product for yourself. Cognitive bias can be a significant barrier to customer empathy. But that empathy is critical to your product’s success.
Strive to understand your customers better. Cultivate your own curiosity about the people you are building the product for. Look for surprises. Leave your ego at the door. Don’t jump to quick solutions. Seek real answers. Work to build a complete understanding of customers and their needs. Above all, develop customer empathy.
To build a product that delights customers and keeps them front and center, ask (and keep asking):
- Are we working on the right problem?
- Who are we solving the problem for?
- When are we done solving?
- Does the solution actually solve the original problem?
How to Recognize and Reduce Cognitive Bias as a Product Manager
Confronting bias will lead to better, more informed decision-making. Resulting in a much better product and a more inclusive, innovative organization.
“The best way to prevent cognitive bias from influencing the way you think or make decisions is by being aware that they exist in the first place. Critical thinking is the enemy of bias. By knowing some factors can alter the way we see, experience, or recall things, we know that there are additional steps we must take when forming a judgment or opinion about something.” (MasterClass: How to Identify Cognitive Bias)
As you to tackle biases within yourself and your company policies and structure, keep these ideas in mind:
The first step in overcoming cognitive bias begins with awareness. You can’t reduce bias if you don’t recognize it first. Admittedly this is a difficult thing to do. No one wants to admit to having an unconscious bias.
First, learn what your own biases are. Secondly, learn what your company’s biases are. Lastly, learn what biases your customers have, too. Knowledge leads to greater awareness and opportunities to take positive action.
Don’t let short-term product objectives eclipse long-term company objectives.
Broaden feedback, both internally and externally. Seek diverse sources for information, experience, and points of view.
Create a Diversity and Inclusion (D&I) strategy in your organization. Making the company-wide change to tackle cognitive bias really starts at the top. Here’s what the research says about diverse management teams:
- 33% more likely to deliver better-than-average profits
- 70% more likely to win new markets
- generate 19% more revenue from innovation
“Organizations that lag behind their competitors in diversity will find it more difficult to attract top talent, break into new markets, innovate and build a good reputation among employees, customer, and outside stakeholders.” (Human Resource Executive: How the World’s Most Admired Companies Drive D&I)
A D&I initiative doesn’t happen by accident. It’s a very intentional effort.
Follow these steps to build a D&I program in your organization:
Appoint a task force. Encourage involvement from every level of the organization. Include diverse points of view.
Collect, measure, and benchmark data about your organization. This will help you identify areas of concern and develop meaningful objectives.
Create a mission statement.
Here’s an excerpt from ProductPlan’s own D&I strategy:
“The Diversity and Inclusion Task Force seek to achieve lasting equality, equity, and justice by making ProductPlan a safe space for all employees to thrive. We will :
- continue to listen and grow with the world around us.
- provide outlets for voices to share their ideas and concerns.
- be a team of action, working to ensure those words are heard.
- provide recommendations to the executive team.
- help organize and support community-based outreach for employees to take part in.
- establish a procedural scaffold for engaging with our leadership team on these subjects to enable them to grow this try and scale our business in such a way that it does not dilute this fundamental aspect of our team culture.”
Draft a charter that describes how the task force will handle D&I topics. Make recommendations. Hold accountability to colleagues, customers, and the community.
Outline plans for how your task force will work with company leaders to put in place recommendations.
Implement D&I training and communications initiatives.
ProductPlan’s approach includes written proposals. These include the description of the problem, proposed solution, research, metrics for measurement, and an estimate of requisite resources.
Another example is asynchronous feedback. This is to prevent recommendations from stalling due to scheduling conflicts.
Lastly, Taskforce proposals are presented as recommendations (not decrees.) This is to encourage discussion. As well as cultivate an environment of learning from one another.
Don’t let cognitive biases be a barrier to your product’s success. We hope these strategies will help you clear a bit of the brain clutter and pave the way to better, more informed decision-making.