Are your internal biases misleading the business?

Start by acknowledging your own biases if you want to survive in business.

An article featuring a picture of several men in suits has triggered a shit storm in Denmark over the past couple of weeks. The picture is not startling in itself, but the article was still too much for many (including myself), as the picture was accompanied by the headline: ”Lots of dynamism and change in the top boards in 2021”. The article dealt with replacements in the Danish boards. It does not look so dynamic seen from the outside, as the variety seen in the candidates is at an astonishingly low level. Wisely, the editor-in-chief has subsequently been out and apologised. However, we are still left with a few crucial questions: how could it happen that this headline was chosen? And why are we so hopelessly behind in the composition of our boards?

My opinion is that we are more influenced by our biases than we realise. We don’t see that our perception of reality is structured by our mental models of the world. And therefore, we do not recognise that the mental models could just as well be different and that they are shaped by our background, education, age, ethnicity, gender, and more.

The other tricky thing about humans is that we like to interact with people resembling ourselves. We may not fully admit it, but that’s how it is – we are more confident around people who share the same values and basic worldviews as ourselves.

On top of that, we are attracted to data and events that confirm what we believe and perceive to be true, also known as confirmation bias. To sum up: We are up against some strong forces if we want to stir the pot at board level, they have historically been a closed club and the ‘sitting paradigm’ may not even see the problem. On the contrary, it is nice to be among like-minded people.

Back to the article. The business world has been ruled by men – and a certain kind, like the ones you see in the picture. Preferably with a background in economy/finance/engineering, in their 50s, wearing a suit and tie also a requirement. They are probably skilled and qualified, and as such it has not been something we have questioned until now. But there are good reasons to ask questions – not just to give others than those who fit into the narrow formula a chance, but simply to ensure corporate survival. It is hopelessly outdated to have boards with so little diversity. If we are to make good decisions in a complex world, we need more interpretations of what is happening in the world. We need more perspectives into the same events because we see something different. Roger Martin calls it ‘integrative thinking’, you could also just call it common sense.

The surprising thing for many is that the argument for embracing diversity can be addressed strictly from a financial point of view as research shows that diversity is good for business. An example is a recent report from McKinsey that shows a strong business case for both gender diversity and ethnic and cultural diversity in corporate leadership—and shows that this business case continues to strengthen. The most diverse companies are now more likely than ever to outperform less diverse peers on profitability.

So, the conclusion is pretty clear: invite people who are different from you into your boards and management. Start the journey by realizing your own biases, so that you are able to see what you otherwise wouldn’t.