Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 13, Issue 22;   May 29, 2013:

Managing Hindsight Bias Risk

by

Performance appraisal practices and project retrospectives both rely on evaluating performance after outcomes are known. Unfortunately, a well-known bias — hindsight bias — can limit the effectiveness of many organizational processes, including both performance appraisal and project retrospectives.
A tire reef off the coast of Fort Lauderdale, Florida

A tire reef off the coast of Fort Lauderdale, Florida. In the 1970s, approximately 2 million tires were dumped here to create an artificial reef, in what is now recognized as a colossal failure. Three decades later, military divers have begun removing the tires as part of their dive training. Marine life hasn't colonized the "reef," because the tires are too light. They break up and move about under the action of the ocean, and when they do, they damage natural reefs. Attempts to build tire reefs with bundles of tires or by weighting them with concrete have also failed. Moreover, the tires are thought to leach toxic materials.

Tire reefs all around the world have exhibited similar results. In retrospect, the effort was a failure, but hindsight bias has prevented us from recognizing the true failure of the effort: omission of a long-term testing program. The concept of tire reefs was indeed flawed, but there has been little discussion of the reason why a one- or two-decade testing program wasn't undertaken before the major dumping occurred. Because failure to address that question exposes the world to repetition of this large-scale environmental disaster, one can only wonder why the threads of such a discussion aren't as widely available as the stories of the failure itself.

Photo by U.S. Navy courtesy Wikipedia.

People often believe that an outcome was predictable or even inevitable, after they know what that outcome was. When we do this, sometimes we're right, but often our sense of predictability or inevitability is exaggerated. This perception is so common that psychologists have given it a name: hindsight bias. Because of hindsight bias, we tend to see causal connections between antecedent conditions and outcomes, even when those supposedly causal connections are false. We tend not to recall conditions that would introduce uncertainty in the outcome, or which would tend to produce dramatically different outcomes. And we do recall elements that didn't exist if they support explanations that predict what actually happened.

For example, in a written evaluation of a subordinate's performance, a supervisor might observe, "George's impulsiveness created toxic conflict, not only involving George, but also between other team members." Toxic conflict might well have occurred, but was George's impulsiveness really the cause? Or was it an effect? A more useful comment would have provided evidence for the supposed causal connection, and it would have addressed alternative explanations for the toxic conflict that did occur.

Here are three suggestions for managing the risk of hindsight bias in the workplace.

Awareness is essential
Ignorance of hindsight bias allows it to thrive. Educate all those responsible for interpreting past events. Give them the tools they need to detect hindsight bias in themselves and their own thinking.
Accept that hindsight bias is a risk, and mitigate the risk
Although awareness and sensitivity can reduce the incidence of hindsight bias, total elimination is almost certainly impossible. Cooperative action is required. For example, in the performance appraisal process, supervisor and subordinate can be encouraged to discuss the possible presence of hindsight bias in the appraisal, and then come to agreement that they have dealt with those possibilities. Introducing this idea into the appraisal process is an example of mitigating hindsight bias risk.
Identify processes at risk of hindsight bias
Some processes are especially vulnerable to hindsight bias. The two mentioned here — performanceIgnorance of hindsight
bias allows it to thrive
appraisal and project retrospectives — are merely examples. Strategic decisions, including decisions such as reorganizations, acquisitions, relocations, downsizing, outsourcing, and more, are often subject to evaluation, and therefore hindsight bias risk. An inventory of all processes for hindsight bias vulnerability is a necessary element of any program to address the effects of hindsight bias.

After identifying those processes most susceptible to hindsight bias risk, mitigation is the next step. Mitigation approaches must suit the process, but effective measures include checks and balances along the lines of the approach indicated above for risk management in the performance appraisal process. Multiple viewpoints and healthy, vigorous dialog are essential. Go to top Top  Next issue: Pariah Professions: I  Next Issue

52 Tips for Leaders of Project-Oriented OrganizationsAre your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!

Your comments are welcome

Would you like to see your comments posted here? rbrenEQuetChPjwYBDxmgner@ChacxXTxBssoFmfDfMugoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Emotions at Work:

Nez Perce moccasinsThe Fundamental Attribution Error
When we try to understand the behavior of others, we often make a particularly human mistake. We tend to attribute too much to character and disposition and too little to situation and context. When we seek a better balance, we can adopt a more accepting view of events around us.
Too much time on his handsHurtful Clichés: II
Much of our day-to-day conversation consists of harmless clichés: "How goes it?" or "Nice to meet you." Some other clichés aren't harmless, but they're so common that we use them without thinking. Here's Part II of a series exploring some of these clichés.
The wreckage of the Silver Bridge across the Ohio RiverHyper-Super-Overwork
The prevalence of overwork has increased with the depth of the global recession, in part because employers are demanding more, and in part because many must now work longer hours to make ends a little closer to meeting. Overwork is dangerous. Here are some suggestions for dealing with it.
World global temperature departuresConfirmation Bias: Workplace Consequences Part I
We continue our exploration of confirmation bias, paying special attention to the consequences it causes in the workplace. In this part, we explore its effects on our thinking.
A diagram of effects illustrating two more loops in the Restructuring-Fear CycleThe Restructuring-Fear Cycle: II
When enterprises restructure, reorganize, downsize, outsource, lay off, or make other organizational adjustments, they usually focus on financial health. Here's Part II of an exploration of how the fear induced by these changes can lead to the need for further restructuring.

See also Emotions at Work, Personal, Team, and Organizational Effectiveness and Cognitive Biases at Work for more related articles.

Forthcoming issues of Point Lookout

Browsing books in a library. So many books, we must make choicesComing October 27: Five Guidelines for Choices
Each day we make dozens or hundreds of choices — maybe more. We make many of those choices outside our awareness. But we can make better choices if we can recognize choice patterns that often lead to trouble. Here are five guidelines for making choices. Available here and by RSS on October 27.
Ecotourists visit an iceberg off GreenlandAnd on November 3: Way Over Their Heads
For organizations in crisis, some but not all their people understand the situation. Toxic conflict can erupt between those who grasp the problem's severity and those who don't. Trying to resolve the conflict by educating one's opponents rarely works. There are alternatives. Available here and by RSS on November 3.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenEQuetChPjwYBDxmgner@ChacxXTxBssoFmfDfMugoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

The Power Affect: How We Express Our Personal Power

Many The Power Affect: How We Express Personal Powerpeople who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.

Bullet Points: Mastery or Madness?

DecisBullet Point Madnession makers in modern organizations commonly demand briefings in the form of bullet points or a series of series of bullet points. But this form of presentation has limited value for complex decisions. We need something more. We actually need to think. Briefers who combine the bullet-point format with a variety of persuasion techniques can mislead decision makers, guiding them into making poor decisions. Read more about this program.

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.