Despite their best intentions, executives fall prey to cognitive and organizational biases that get in the way of good decision making. In this series, we highlight some of them and offer a few effective ways to address them.
Our topic this time?
When good intentions get derailed
The CEO of a large US-based fashion retailer was surprised to get the resignation email and even more perplexed about the reasons why his colleague was leaving. The senior vice president (VP) of sales was supposed to be his successor. Seven years of client visits, planning meetings, project briefs, and rotations in procurement, marketing, and now sales had prepared her well for the highest leadership role, he thought. Others in the C-suite believed the same. But in those seven years, the senior VP had watched several male colleagues with similar experience get promoted after only four years. Only two other women had been elevated to senior roles at the company in the past decade—and that was in human resources, not in a business unit with its own profit-and-loss statement. “The promotion process seems unclear, at best, and biased, at worst,” the senior VP wrote.
The CEO felt blindsided. He and his team had long prided themselves on creating an inclusive work environment that would give them an edge over competitors, one where top talent could innovate and grow—and stay. How had they missed the signs to the contrary?
The CEO must acknowledge his bias toward motivated reasoning. A cousin to the more well-known confirmation bias, motivated reasoning takes hold when people lend more credence to conclusions they really want to be true (say, an emotional belief) rather than to those proved by evidence.1 This bias is particularly likely when the belief is related to the believer’s own capabilities or priorities.
To confirm his perceptions of himself as an advocate of diversity, equity, and inclusion (DEI) and of the fashion retailer’s working culture as inclusive, the CEO pointed to selected facts—like the large number of women in line management roles, awards the company had won previously for being a best place for working parents, and his own sponsorship of the senior VP of sales. And, in a classic example of confirmation bias, he sidestepped or discounted other facts, like the high rate of women versus men leaving the company since the onset of COVID-19, as well as feedback, over the years, that the promotions process looked different for different people.2
The CEO must acknowledge his bias toward motivated reasoning, which takes hold when people lend more credence to conclusions they really want to be true rather than to those proved by evidence.
The CEO and other senior leaders at the fashion retailer must replace emotions and perceptions with facts. They should systematically assess the company’s DEI objectives: Is the company making progress against those goals, and how do the DEI objectives inform the company’s promotions process? To understand the dearth of women in leadership roles, for instance, the CEO and executives might ask themselves if they were reviewing the most diverse slates of candidates possible and using anonymized data to source and evaluate candidates. During succession-planning discussions, they could ask if they were bringing enough high-potential women into the conversation—as either ready now, ready soon, or candidates for further development.
To clear up confusion about the paths to promotion, the executives could work with the chief human resources officer (CHRO), business unit leaders, and others in the company to map skill sets, capabilities, educational requirements, and so on to the company’s critical roles. They could revisit those metrics at least annually to acknowledge that business and societal conditions inevitably change. They could also define the “round-trip ticket” for high-potential employees leaving line roles for functional ones and coming back again. In this case, the CEO could have shared with the senior VP the objectives for each of her rotations, the specific leadership skills she could expect to gain in a role, and so on, rather than allowing her to feel left in the dark about whether all those rotations were giving her the required experience.
Strong emotional beliefs will inevitably seep into just about any business decision, but executives don’t have to let them obscure realities in the workplace.