20 Cognitive Biases that Impact Innovation

by Pete Foley

Our everyday decisions, and those of our colleagues, our consumers, and our families are constantly influenced by hundreds of cognitive biases.  These operate largely below our awareness, and influence behaviors quite consistently across human populations.  They particularly help us to think and act quickly, to navigate complex decisions, but they often operate even when we think we are making thoughtful, highly considered decisions. Sometimes they mirror pure logic, but often these biases result in decisions that are quite surprising from a purely logical perspective.

I’ve collected well over 200 of these biases from multiple sources that range from standard Cognitive Science and Social Psychology to Wikipedia. Here I share, in no particular order, 20 that I think have relevance to innovation, the innovation process, and innovation research.  Some of the central themes that you’ll see include our tendency to make relative vs. absolute decisions, as well as the importance of context, past experience and the opinions of others.  Also our disproportionate liking for certainty over uncertainty, and for valuing what we might lose more than what we might gain.

I suspect some of these will be familiar, perhaps in what we’ve observed in others, or perhaps from a honest look in the mirror.  I hope a few draw a smile, while others provide a little insight, and help you to both create more appealing ideas, and test them a little more effectively:

20.   Mere Exposure; We like things we are familiar with.  So the more we have seen something, the more we will like it.   It’s one reason why advertising works, as it makes things more familiar, and hence makes us more likely to choose them. A similar bias is the availability cascade, where if we repeat something enough, it becomes true.

19.  Backfire effect when people react to evidence that challenges their opinion by strengthening their existing beliefs.  Closely related is Irrational escalation, a phenomenon where people justify increased commitment to a course of action based on prior investment, even in the face of new evidence suggesting that the original action was wrong. If you innovate for long enough, you’ll find these somewhere!

18. Illusory Correlation, or False Cause Fallacy: Inaccurately perceiving a relationship between two unrelated events, often because they occur in close temporal proximity.  Correlation does not mean causation, but we are wired to make that connection.  Often harmless, it can lead to superstitions like a lucky jacket.  However, it can also be a barrier to innovation, particularly in situations where a new product is incorrectly linked to background problems that routinely occur, but become more visible simply because the innovation focuses more attention on the whole usage experience.  For example, linking vaccination to Autism, or a new drug to apparent side effects, such as an upset stomach, which in reality would have occurred with or without the drug

17. Confirmation bias is the tendency to search for, or interpret information in a way that confirms our preconceptions. Expectation bias is closely related, and is the tendency for experimenters to believe data that agree with their expectations for the outcome of an experiment, and to disbelieve and discard data that appear to conflict with those expectations

16.  Functional fixedness limits a person to using an object only in the way it is traditionally used.  The killer application of many inventions is not the one it was originally created for.  Being able to see though this bias can be a huge enabler for innovation, whether it leads to the Post-It note, or James Dyson’s use of centripetal separation in his vacuum cleaner.

15. Framing effect: We draw different conclusions from the same information, depending upon on how or where that information is presented. Most people would rather have a surgery that has a 90% survival rate than one that has a 10% mortality rate.  We prefer a car with a 99% reliability record than one that breaks down more than 3 days a year!   We are used to framing, or spinning in politics (are you pro choice or pro life?), but it also matters when you are pitching an idea, service, or a new innovation.

14.  Context Effect: Never go shopping when you are hungry, you will buy more calories!  People who are happy will respond to an innovation differently to people who are frustrated.   Refreshed people are more open to new ideas, while tired people are more likely to fall back on old habits.  Context is also crucial for Innovation research.  Data generated in a lab, a focus group, or when someone is wired up to an EEG machine or brain scanner, will often be different to behavior in the real world.

13. Zero-risk bias: We prefer  reducing a small risk to zero over reducing a big risk to a small one.  We also love things that are free, which is a close cousin to zero risk.  Whether it is free shipping, 20% extra free, buy one get one free, or a money back guarantee, we are tapping into this bias.  This is closely related to Prospect Theory for anyone who wants to dig a little deeper.

12.  Distinction bias is the tendency to view two options as more dissimilar when evaluating them side by side than when evaluating them separately.  This is important for research, where we often compare different option in close proximity, when in the real world they may never be seen together.  Also related to, “the new prototype is 5x better than the old one”.  making big improvements is a faulty prototype can be seductive to a team who has put their all into the improvement.  But this doesn’t matter to a potential customer who never saw the old prototype.  All that matters to them is how we compare to the market.  This is also related to the Relativity bias, which is the tendency to make relative, rather than absolute evaluations.

11.  Mental accounting The tendency to value things differently based on what internal classification we put on them.  The way we think of money is different depending upon whether we are paying cash or using a credit card.   We think of value differently for luxury versus commodity items.  Framing an innovation to match the right internal classification for potential buyers can be the difference between success and failure just as much as the innovation itself.

10. Hyperbolic discounting the tendency for people to have a stronger preference for more immediate payoffs relative to later payoffs. This bias for short-term gains probably made a lot of sense on the savannah, but today it contributes to obesity, poor diet, lack of compliance to life saving medications, even texting and driving.

9. Endowment effect and Loss Aversion Bias: People often demand much more (often 2x) to give up an object than they would be willing to pay to acquire it. A bird in the hand is worth two in the bush, even if we are given a guarantee that we’ll get the ones in the bush later.  Giving someone a bonus, and then taking it back if somebody doesn’t meet a goal is often more powerful than giving them the same bonus if they do.

8. Planning Fallacy the tendency to underestimate task-completion times and cost.  I suspect we’ve all experienced this in some form, but it never seems to completely go away!

7.  Peak End Rule. We tend to remember things in terms of the peak (negative or positive) experience in the process, and the end result.  So a medical procedure may be remembered by the most intense moment of pain, and how it ended, rather than for little bursts of pain that occurred throughout.  An innovative meal by the first bite of an amazing dish, and the check!  It is worth thinking about the experience with our innovations from peak end perspective, which also embraces the weakest link.

6. Availability heuristic: We estimate what is more likely by what is more available in memory, which is in turn biased toward vivid, unusual, or emotionally charged examples, or recall driven by current context.  This is really important for advertizing, as we remember things that were encoded into memory under similar conditions to where we are at the moment, so there is a lot of value of connecting advertizing to the point of purchase, or in creating advertizing where our innovation is associated with vivid emotional events (ideally positive)

5. Rhyme as reason effect rhyming statements are perceived as more truthful and/or more likeable.  Rhyme all the time, your innovation will shine!

4. Dunning Kruger effect where incompetent people fail to realize they are incompetent because they lack the skill to distinguish between competence and incompetence. Common when people are moved to areas that are new with the same responsibility they had in their old space, and when people are promoted beyond their abilities.  I’ve been fortunate to only have to deal with this in a small number of occasions, but when I have, there has been a somewhat irrational comfort in being able to give it a name!

3. Information bias is the tendency to seek information even when it cannot affect action.  This delays action, and hence risk, and the potential for loss or blame, but of course, also slows down innovation.

2. Knowledge bias the tendency of people to choose the option they know best rather than thebest option. As innovators, overcoming this bias can be the key to disruption, as looking in unexpected places is more likely to drive big, innovative leaps.

1.  Bandwagon effect the tendency to do (or believe) things because many other people believe the same.   Not always a bad idea.  If everyone believes something is poisonous, you may not want to eat it, and crowd sourcing can be a powerful tool.  However, challenging widely held givens can also be a way to be at the front of the crowd, rather than following it.

These are just a few examples, in no particular order. Some of which are obvious, some familiar, but even when we know about them, we often fall into them.  Of course, not all of them will apply all of the time, but just being reminded can help us avoid biases we don’t want, or tap into those that can help us.

image credit: Dierk Schaefer

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A twenty-five year Procter & Gamble veteran, Pete has spent the last 8+ years applying insights from psychology and behavioral science to innovation, product design, and brand communication. He spent 17 years as a serial innovator, creating novel products, perfume delivery systems, cleaning technologies, devices and many other consumer-centric innovations, resulting in well over 100 granted or published patents. Follow him on twitter at @foley_pete.