Outcome Bias in Decision Making

Cognitive Bias
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Gandhi Heryanto
Management Consultant, Indonesia

Outcome Bias in Decision Making

The fact that something worked doesn't mean it was the result of a correct decision, and the fact that something failed doesn't mean the decision was wrong (Howard Marks, Inspiration from the World of Sports Memo).

OUTCOME BIAS
When people are judging the quality of leaders’ decisions, they tend to focus much more on outcomes than intentions, a phenomenon that psychologists call "outcome bias".
The outcome bias is costly to organizations. It causes employees and leaders to be blamed for negative outcomes even when they had good intentions and used a thoughtful decision-making process, considering all the information that should be taken into account. Organizations and their leaders can benefit from understanding how to help individuals look beyond end results.

REDUCING OUTCOME BIAS
Ovul Sezer and Max Bazerman of Harvard, Ting Zhang of Columbia and Francesca Gino decided to investigate potential ways to eliminate (or at least reduce) the outcome bias. In a series of studies, when evaluators had a chance to compare well-intentioned versus selfish participants head to head, the evaluators would give more weight to the individuals’ intentions than to their outcomes, as compared to evaluators who only focused on one of the individuals.

⇒Based on the studies do you agree that common biases can be reduced or eliminated when people evaluate courses of actions at the same time (simultaneously) rather than one after the other (separately.
Source: Francesca Gino, September 2016, What We Miss When We Judge a Decision by the Outcome, Harvard Business Review

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