How biased are you?

What does unconscious bias look like in your colleagues, your workplace and up the corporate ladder? Kate O’Reilly from Optimiss Consulting unpacks the conditions that support biased decisions and offers strategies to promote better thinking and practice.

When we talk about diversity we often assume we’re talking about minority groups. However, women in the workforce and in the wider population are not a minority group. I often argue: if you can get your workforce right for women, you’ll be well placed to start tackling the broader diversity challenges associated with age, cultural background, disabilities or sexual orientation.

Does your leadership team look like this?

Men

The magical disappearing act

Australia has the lowest numbers of women in executive management positions compared to the UK, USA, Canada, and South Africa.

The Workplace Gender Equality Agency (WGEA) reported for 2014-15 that women currently make up 49% of paid workers in Australia and 55% of all higher education graduates, but they represent only 15% of CEOs and 27% of key management positions.

Female professionals earn an average of 28% less than male professionals (one of the biggest gaps exists in the Finance & Insurance industry).

The former Sex Discrimination Commissioner Elizabeth Broderick acknowledged that pay gaps marginalise women (Gender Equity Summit Report, June 2011). 

People paid more appear to matter more in business – they have greater influence on decisions.

Why are so few women in senior positions? One major factor is a common bias in organisations, particularly at executive management level, in favour of men.

I heard an interesting report from Sam Mostyn, who became the first AFL Commissioner in 2005 (she is on the Virgin Australia Board), her appointment as AFL Commissioner was actually the first rigorous merit-based appointment to the position, all the men appointed before her had been selected via a ‘tap on the shoulder’.

She was only assessed so thoroughly and formally because she was a woman. She went on to assure the audience that she would ensure merit-based appointments for the Commissioner roles in the future, for both men and women.

KateHandsUp

Kate O’Reilly presented at the Actuaries Institute on 2 May 2016. View her presentation slides and video for further insight on this topic.

We’ve had equal opportunity legislation for 30 years now, we’ve had women graduating in greater numbers than men for nearly 20 years, so shouldn’t the problem sort itself out?

If our businesses are not accessing the full range of talent available to us across the workforce, as well as in our senior management team, then we are wasting talent. 

Global studies undertaken by organisations such as McKinsey & Company and Goldman Sachs have found consistent correlation to superior corporate performance where there is a mix of genders, ethnic backgrounds, and ages. Organisations with gender balance in their workforce report increased collegiality, less ‘group-think’ and better insights into the consumer market.

Fortune 500 companies with 3+ women on the board gain a significant performance advantage (over those with the fewest), with +73% on sales revenue, + 83% return on equity, and +112% return on invested capital.

There are more than just bottom line benefits, and research has found that diverse groups make higher quality decisions. This leads to higher employee job satisfaction and engagement, increased employee commitment, and an increased ability to attract talent.

What is unconscious bias?

Unconscious bias is hidden and unintentional at the subconscious level.

Here are the key conditions that provide the perfect environment for bias to influence your decisions.

  • Ambiguity/lack of information g. If you only know that I’m a woman, you’re very likely to use everything you know about women to try and relate to me. If I told you three more things about me, you’d have more to work on. But if you have only one piece of information and everything else is unknown, then you’ll rely on your biases.
  • Stress from competing tasks g. if your goal is to complete a number of tasks , then you are going to be much less interested in collecting information as you go to give you a comprehensive picture of the situation you are in. So stress from competing tasks will lead to you relying on your biases.
  • Lack of critical mass g. if the representatives of one group are overwhelmingly present (say there are almost no women in the room), then the lack of representation of the less represented groups will lead to it being easier to rely on biases that work for the one group in the room.

Critical mass is considered to be about 30%. So whatever category you need to focus on, you need to ensure that there is 30% representation in a data set when you are evaluating and making decisions on that group.

The importance of critical mass is most relevant for in recruitment, promotion and performance management. When we are going through a stack of CVs and job applications, there is lots of ambiguity, there is lots of pressure from competing tasks, there is a lack of information, and some groups are really under represented so there is a lack of critical mass. In these conditions, you are highly likely to rely on your biases.

What action can you take?

Consider increasing your conscious awareness of your own bias, remembering how it leads to overlooking talent. These Implicit Association Tests by Harvard are a good place to do this. Start with the Gender-Career IAT to learn about your tendency (or otherwise) to link family with females and males with career.

Increase your sense of responsibility and promote good practices by considering the following specific actions:

  • Structure decision-making, particularly about recruitment and promotion processes with clear criteria and transparent decision-making
  • Use diverse teams to recruit, watch your language and communications, and think laterally about your feeder sources
  • Run your teams and meetings for full participation and fair credit – set ground rules for meeting dynamics, ensure all voices are heard
  • Push back on the likeability penalty (words to watch: aggressive, assertive, pushy, abrasive, demanding, difficult, self-promoting, political, not a team player) – be specific and ask if the same standards are being applied to men;
  • Rotate office ‘housework’ taking meeting notes etc
  • Challenge your assumptions about working mothers and working fathers e.g. don’t make assumptions that women are limited in their commitment, ability to travel or take on a new assignment – have the conversation and ask them; and
  • Manage parental leave – for your team and for yourself. Encourage men to take their full paternity leave, question your companies’ policies for parental leave.

 

KateOReillyMountains are molehills piled one on top of the other.

While any one decision may seem minor, small imbalances and disadvantages accrue and can have major consequences in salary, promotion, and prestige, including advancement to leadership positions.

The key areas where unconscious bias can have a major (unfair) impact are in recruitment and promotion decisions, in line management and performance appraisals.

If we don’t acknowledge bias then we can’t do anything about it. If each of us makes a small change, then we can have a big impact.

Remember:

  • Be conscious in your actions;
  • Watch for biases in yourself;
  • Watch for it in others, and call it out.

CPD: Actuaries Institute Members can claim two CPD points for every hour of reading articles on Actuaries Digital.

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