Oh dear. Leaked comments made on a conference call by Bill Michael, UK chair of accountancy firm KPMG, have ended in his swift resignation. It’s a big fall from a great height but watchers of these things seem to agree that his position was, as he came to admit himself, untenable. In case you missed it, here he is saying that the idea of unconscious bias is ‘crap’, that some people are playing the ‘victim card’ and that people should stop ‘moaning’:
Exceptional analytical power
First things first: it’s obvious that being well-informed, logical and scientific in your approach is vital for any business leader. That’s even more true for a global accountancy firm. It’s inconceivable that this man could have reached his level of seniority without exceptional analytical and strategic reasoning power.
And yet, even when you watch the video and those quoted snippets are heard in some sort of context, they are not well-informed, logical or scientific. He complains that “there is no such thing as unconscious bias”. He then goes on to say that “after every single unconscious bias training that’s ever been done, nothing’s ever improved”. But if there is no such thing as unconscious bias then how would you measure whether it had improved or not after training? And if it were true that training to counteract bias didn’t work, why would that prove that it didn’t exist? That’s a basic logical error – like saying that because a disease doesn’t respond to medical treatment it therefore doesn’t exist.
Later, Michael appears to be talking about people getting a grip and taking control of their own lives. If you’re not sick, he says, don’t sit there and moan about what’s happening; it’s not as if this is being done to you. For people who are forced by law or company policy to work from home when their homes and lives are not set up for it, this is breathtakingly callous but it’s also sloppy thinking on Michael’s part. Because, yes of course, it is something that’s happening to us. We are passive victims of the pandemic and the economic consequences. Just as the reported 6% drop in annual underlying profits of his company was because of things beyond his, or anyone else’s, control.
His point, I suppose, is that unless you’re sick you should still get out there and take responsibility for your own destiny, not just sit there and complain. There’s some hard truth in that. But we’re watching a man sitting there and complaining that those less powerful than him are apt to sit there and complain. It’s a badly argued point of view.
So why would a man able to understand and analyse complex financial and economic processes descend to this level of sloppy reasoning? Why couldn’t he apply his awesome intellectual powers to these topics?
There can only be one answer. It was because he didn’t want to. He wanted to remain ignorant of the arguments and casually dismiss the whole notion. He wanted to avoid listening to what some people are saying and avoid responding thoughtfully. And that is a bias – pure and simple. Yes, the supreme irony is that he can’t speak coherently about unconscious bias because he’s biased against the idea. The only mystery surrounding his bias is whether it’s a conscious one, where he openly refuses to consider the possibility that biased thinking occurs, or an unconscious one.
If he’d looked into the matter, he could have discovered that you don’t have to be ‘woke’ or politically correct to believe in unconscious bias. Daniel Kahneman is a psychologist who won a Nobel prize for his contribution to behavioural economics and found popular fame as the author of Thinking, Fast and Slow. He and his colleagues have identified a number of ways that human beings suffer from unconscious cognitive biases – called ‘heuristics’ – when we make decisions. Everyone in leadership should have at least a passing knowledge of those ideas.
And a passing knowledge should give anyone the humility to realise that the human brain is brilliant but has loopholes and bugs. One of the most amusing is the Dunning-Kruger effect. This is the phenomenon where people who lack understanding of something are unaware of just how much understanding they lack. It’s as if they’re too ignorant to realise how ignorant they are. Remind you of anyone?
I’ll finish with a few examples of the heuristics that our brains use as short cuts to make decisions but which can lead us to misjudge the situation. Kahneman says that knowing about them doesn’t remove them, in his own experience; he’s still just as likely to make these mistakes as someone who’s never heard of them.
The Planning fallacy
We almost always underestimate the time needed to do something, even if we’ve done it before, underestimated it last time, and should know how long it takes! This is true for packing a suitcase and planning a product launch.
This is when we ‘anchor’ our expectations to the first piece of information we hear. For example, if someone tells you that it’s possible to rent a two-bedroom apartment in Manhattan for $3,000 per month you’ll reject evidence to the contrary until it’s overwhelming. Why? Because our brains say first is best.
This is when we assess the likelihood of something by how easy it is to imagine. That’s one reason why we feel we’re more likely to be killed by a shark than a cow, even though it’s the other way around! There is no horror film called ‘Hooves’ about a marauding killer cow to help us imagine how we might meet our end that way.
I’ve picked out three heuristics that I thought were easy to understand quickly and believe in. But there are dozens of possible ways in which, under certain conditions, our perceptions, estimates and decisions will be wide of the mark. Any intelligent person who reads a book or two with an open mind is likely to accept that humans are full of biases. Bill Michael is certainly intelligent, so his remarks make it likely that, on this issue at least, he simply didn’t have an open mind.