So… Just how does that picture make you feel? What kind of message did you get from it? Does it agree with your own thoughts? Do you have a different idea of what they might be saying?
This is a quick exercise, and if EVERYONE who reads this participates, you will be amazed at the results…
Based on the picture below, come up with a simple, random one or two sentence story headline for what is happening here. WITHOUT READING FURTHER, scroll to the bottom and post your headline in the comments. THEN come back and continue reading.
We will come back to this picture, and your headline comment, at the end.
Risk Aversion and Risk Taking behavioral traits are prevalent in us all at one time or another. It is human nature to want to avoid risky possibilities when we see a clear advantage or gain. Likewise, it is human nature to take a chance at the avoidance of potential loss, even if the odds are not in our favor. Yet for all these possibilities, the rare mindset of maintaining a critical perspective, while the most preferred stance, largely seems absent when needed most. Why is that? Why is it that so many people would choose to frame their perspectives around a focal point instead of attempting to maintain a neutral position of rationality? Perhaps it would be better to answer my own question by removing myself from the focal point I have just drawn.
You see, it’s all about the information we currently have presented in front of us. Or at least, how we are presented that information – combined with how we choose to see it – that makes all the difference in the world.
A pair of social scientists named Tversky & Kahneman conducted a study in 1981 whereby they asked participants to choose between two choices. Given the made up scenario where you knew a disease would potentially kill 600 people, you had a choice to make; would you 1: choose a program (A) that saved 200 lives, or 2: choose a program (B) where there existed a one-third probability that 600 people would be saved, and a two-thirds probability that no people will be saved. Which would you choose? Most people chose (A), because the see a guarantee of at least 200 lives saved, while the second choice offered only a fraction of positive possibility.
But what if the questions were altered in perspective? Using the same scenario, they asked other people two different questions; Would you choose a program (C) where 400 people would die, or a program (D) where there is a one-third probability that no one will die, and a two-thirds probability that 600 people will die? What do you think they chose then? Amazingly, the majority chose (D)!
Why the switch? This was the exact same scenario with the exact same questions only worded differently, and still there was a vast majority in both cases choosing exact opposite answers.
The answer is simple, as Bazerman & Moore (2013) put it, “Individuals treat risks concerning perceived gains (for example, saving lives – Programs A and B) differently from risks concerning perceived losses (losing lives – Programs C and D).” (p. 84). This switch in choice making is a result of framing perspective that changes the focal point of the question.
Framing is extremely important to understand as leaders, because in any critical thinking effort, we run the risk of falling victim to biases developed around perspective. To provide a brief example of framing, suppose you came home and found your dog made a bowl movement in the house. Would you choose to say the dog had an accident? Or would you say the dog pooped in the house? Using the word “accident” indicates the dog was fully trained to relieve itself outside, and while you were gone, had to go, tried to hold it, and simply could hold it no more. Saying the dog “pooped” in the house suggests that the animal may have never been trained, did not know any better or didn’t care, and simply did it’s business when it had to go.
This very common cognitive bias is simply called a Framing Bias, and its purpose and use is designed entirely for the benefit of the side using it. It works on a psychological level as an “Effect”, by purposely presenting information in a biased perspective, and to where people react in a certain way based upon whether the information presents either a gain or a loss. This “Gain-Loss” effect is not necessarily just that, but most often takes the form of an individual choosing a certain side, a stance, an affiliation, indeed nearly any decision resulting in an either-or situation. To provide an example of how framing most commonly works, think of the following scenario. In the news, you hear a story about illegal aliens, but the reporter specifically chooses to use the term “undocumented residents”. What images immediately come to mind when you hear each term? Which term – “illegal aliens” or “undocumented residents” – creates the most impact? Which creates the most negative image in your mind? Why do you think the reporter specifically used that term instead of a more accurate one? See where this is going?
Framing biases are all around us, and designed to create focal points that shift our perspectives and compromise our decision-making capabilities. News reports are framed around the stories the news organization wants you to hear, from a perspective they want you to see, while at the same time, usually only containing half of the total truth. Politics is filled to the hilt with biased framing in arguments that only tell the side that makes the individual look good or their policy look like the better choice, and other arguments that are designed to make the opponent look bad or their policies the worse choice (In reality, neither side are a “good choice” if all they can do is make biased arguments and refuse to actually directly answer a simple question). What about business? Nearly every day we are forced to navigate a world filled with marketing and advertisements, which are really nothing more than forms of audio and visual manipulation. Ads are very complex on so many different levels – from the words specifically chosen to make them appear a certain way, to the use of slogans and phrases that appeal to targeted audiences, from boosted sound levels designed to quickly gain your attention, to the construction of appearances in the products which make them seem better than they really are, and even the purposeful use of pricing just under the higher value to attempt to make it all seem cheaper than it really is. Marketing is nothing more than biased framing, a conflict designed to force you into looking at things from the marketers perspective, where the only utility is for the benefit of the company.
Changing how something is framed often alters perspective or changes the focal point in a person’s mind. This results in a noticeable difference in the way people make choices to deal with problems. Back to Bazerman & Moore’s initial point, “The typical decision maker evaluates outcomes relative to a neutral reference point. Consequently, the location of the reference point has a critical effect on whether the decision is positively or negatively framed and affects the resulting risk preference of the decision maker.” (p. 84). Thus, when we see a clear gain or a potential loss, our mind naturally deviates towards a possibility based on how we perceive the current situation. Yet, despite the fact that we all do it, as we just illustrated here, it is wrong on so many levels because biases prevent us from making the best decisions possible.
So how exactly do we deal with Framing Biases? The simple answer is to focus instead on the results that have the greatest long-term payoff. It sounds a bit Utilitarian, I know, but in the realm of Best Decision-Making Practices, it works. “One simple rule for making decisions is always to select the alternative with the highest expected value – the strategy that provides the best outcome, on average.” (p. 82). We should never make decisions based on personally held biases, but instead, focus on purely unbiased decisions that grant a higher expected return.
Here’s an example of how this rule applies. If a friend offered you a bet whereby, flipping a coin only once, if it landed on heads, he would pay you $200, but if it landed on tails, you owed him $100, would you take the bet? This is an example of a positive expected value situation with risk, and believe it or not, most would choose not to take the bet. At the moment, the focal point of this bet is the potential loss, however, what if we applied our own rule to the bet and simply changed the frame? What if you took the bet on the condition that it must be repeated 100 times instead of only once? The bet then would maintain a positive expected value, and that across a lot of individual bets, the odds virtually guaranteed a profit. The only difference between the two, is that the focal point of the second situation altered the framing of the prospect. It goes to show that when we focus on the focal point and frame a situation or argument around that focal point, our decision-making capability is severely compromised.
The reality is, that altered perspectives based on word choices should never affect us. “Rational decision makers should be immune to the framing of choices, yet we now know that frames can strongly affect our decisions.” (p. 85). Even rational human beings get wrapped up in focal points created by framing, and that our decisions – which, should we have all possible information on, may take an alternate path – are affected by this. Gaining neutral perspective then, it would seem, is the best bet to removing framed bias focal point illusions that cloud our judgement, and as Tversky & Kahneman’s experiments point out, shows us a strategy that may provide the best possible outcome. “In the real world, deviation from risk neutrality should probably be reserved for critically important decisions… …most of us tend to be risk averse toward some choices and risk seeking toward others, leading to a suboptimal group of decisions. Unless the decision is very important, a simple and effective strategy is to use expected value as the bases for decision making.” (p. 87).
Returning back to the picture from earlier, how did your own personal perspective frame your headline? Do you think now that you might consider changing it? Choose another persons headline, and offer up a different perspective as a reply. Can you find an unbiased description that would work better?
Bazerman, Max H. & Moore, Don A. (2013). Judgment in Managerial Decision Making. Eighth Edition. John Wiley & Sons, Inc.