What is unconscious bias?Every second, we receive about 11 million pieces of information. Only 50 are captured by our brain with just 7 of those processed by our working memory. How does the brain manage this? To process this mass of information, our brain filters and orders incoming information extremely quickly by using mental shortcuts. Although these shortcuts can be useful to act quickly when exposed to information overload, they can also unconsciously lead to bad or ineffective decisions. In the latter case, we fall prey to unconscious bias. Unconscious biases are assumptions (e.g., ‘men are analytically more competent than women’), preferences (e.g., ‘I like Tom because he supports the same football team’) or habitual thinking patterns (e.g., ‘This has never worked out, it won’t work out this time’) that often surface as stereotypes and unconsciously can lead to incorrect decisions. Do these unconscious assumptions, preferences or thinking patterns always lead to false or ineffective decisions? No. If you are looking for a lunch partner, Tom might be the perfect choice. However, when giving out a promotion, our preference for Tom should not influence our decision.
Buy tickets to the 2017 CFA Institute European Investment Conferencein Berlin, where Karolien Notebaert will speak in greater detail about ways to overcome unconscious bias.