The Truth About How Motivated Blindness Affects Business Decisions

The Truth About How Motivated Blindness Affects Business Decisions

There is a well-documented cognitive bias that says that people see what they want to see and easily miss contradictory information. A particular type of cognitive bias is when a person suppresses information when it’s in their interest to remain ignorant. This type of cognitive bias is known as motivated blindness. Motivated blindness is frequently associated with unethical behavior.

The Catholic Church’s sex-abuse scandals, Bernie Madoff’s multibillion-dollar Ponzi scheme, and even the 2008 global financial meltdown have all one thing in common. For years the people in charge had motivated blindness and failed to notice critical information that could have limited the damage.

“They don’t want to see, they can’t see, the organization isn’t designed to see, and there are other people who are doing their best to keep us from seeing.”

Max Bazerman, the Jesse Isidor Straus Professor of Business Administration at Harvard Business School and co-director of Harvard Kennedy School’s Center for Public Leadership.

Motivated blindness has been described as the brain’s ability to conveniently overlook or work around a set of facts that contradicts a person’s self-interest. More specifically, the term motivated blindness describes the systematic failure to notice others’ unethical behavior when it is not in our best interest to do so. For example, if you have an incentive to view someone positively, such as if they always go out of their way to help you or make your job easier, it will be difficult for you to accurately assess the ethics of the person’s behavior, like using others.

When we have a vested self-interest in a situation or outcome, regardless of how well-calibrated we think our moral compass is, we will have difficulty approaching that situation without bringing in our bias. If we have incentives for a particular outcome, we tend to disregard or filter out evidence to the contrary in what is known as our confirmation bias. Motivated blindness is a type of confirmation bias where our brain unconsciously distorts the facts and only serves us biased evidence to make it easy for us to reach the desired outcome.

The Truth About How Motivated Blindness Affects Business Decisions

Photo by Kelly Sikkema on Unsplash

A common example of motivated blindness for a small business involves money-related issues. For example, you might have a gut feeling that your bookkeeper may have over-reported business expenses on your profit and loss statement, reducing your company’s net profit. However, since the result of lower reported net profit is that your company will pay less income taxes at year-end, you dismiss your gut feeling based on the assumption that your bookkeeper and CPA must know more about taxes than you, and decide not to pursue the issue any further.

It’s tempting to overlook the details or gut feelings when things are going in your favor. However, you should never stop asking questions. If your business is booming, find out why. What’s happening to make it perform so successfully? Is that level of success sustainable? Are your employees or freelancers acting ethically and responsibly to achieve it? Burying your head in the sand will not make the issues disappear, regardless of how effectively success can mask them.

The vast majority of business owners have every intention to operate an ethical organization. Some business owners are just crooks who operate in unethical ways. However, this is rare. More often, employees bend or break ethics rules because the business owner is blind to unethical behaviors and may even unknowingly encourage them.

I recently saw a situation where an auto dealership business owner created a sales goal for his automotive mechanics. The owner created the goal to get his workers to work faster and harder. However, what happened was that employees started overcharging for services and replacing parts that were not broken to meet the owner’s goal.

Moreover, I have many friends that are former attorneys. They left because there was a lot of pressure to maximize the number of hours they billed clients. The more the owners have at stake, the more likely they will have motivated blindness.

Motivated blindness is not only about financial matters. Business owners are unlikely to notice ethical violations by the employees they have hired since they are responsible for hiring them and have a dog in the hunt. This is often the case when the breaches improve the employee’s performance. For example, in professional sports, coaches often fail to notice athletes taking performance-enhancing drugs as these players help contribute to their winning season. As they say, ignorance is bliss.

Don’t place people into situations with conflicts of interest. It doesn’t matter how ethical you think they are; objectivity is just not possible.

Research has shown that our brains struggle with internal conflicts of interest. When our brain desires one thing, but our conscience objects, conflict is created. Because of this, your brain skews certain facts and events to fit preconceived notions without you even being aware of them. This is especially prevalent with executives and small business owners who commit financial statement fraud.

“Our desires influence the way we interpret information, even when we are trying to be objective and impartial”

Max Bazerman in The Power of Noticing.

Motivated Blindness can be Mitigated

Here are four ways to mitigate motivated blindness in your small business:

  • Learn to better notice the facts around you.
    • Ask yourself: What data is missing? Where can you find it?
  • Make decisions to notice and act when it is appropriate to do so.
    • Ask yourself: Does anything seem peculiar, or “too good to be true”?
    • Ask yourself: How can you investigate your concerns?
  • Provide decision-makers with incentives to speak up.
    • Ask yourself: How you can empower others in the organization to speak up when they observe behaviors that concern them.
  • Create clear consequences for employees and freelancers when they fail to act on facts that indicate unethical behavior.

How can you avoid motivated blindness in your organization?

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Author: Steven Imke

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