Behavioral Biases and Resistance in a Group Setting

Case Study

Your company is undergoing a large strategic initiative. You’ve been chosen to join one of the strategic planning committees. At your first meeting, you note that some of the group members seem to be ignoring important information. Other members seem quite emotional and stressed out.

Overview

Implementing change within an organization comes with many challenges. One key difficulty is overcoming participant resistance (Block, 2011) towards new ideas, especially in a group dynamic. Resistance can be described as an emotional defense mechanism one uses to avoid the discomfort of change. The two primary underlying reasons of resistance are (1) loss of control and (2) vulnerability (Block, 2011). In our case study we will examine a situation involving a large corporate strategic initiative in which the participants on the planning committee are exhibiting emotional resistance towards the project. Some participants on the committee seem to be ignoring important information (aloof) while others are overly anxious about the process (anxious). This essay will discuss the potential behavioral biases responsible for the resistance and offer solutions to counter the concerns.

Behavioral Biases and Resistance

Resistance to change comes in many forms but the underlying root of the problem often lies in fear of loss of control or vulnerability. Control or responsibility within the corporate hierarchy is a highly valued distinction and the fear of losing that distinction will often trigger emotional rejection. Loss aversion as described by Kahneman & Tversky (1979) shows an individual’s motivation towards loss avoidance greatly outweighs one’s desire for gain. Vulnerability concerns, or the fear of diminished power in a highly competitive corporate environment is another reason for resistance to change. Corporate political structure at times drives an individual to seek the next rung on the corporate ladder and changes that threaten one’s opportunity are often rejected. This resistance to opportunity loss can also be explained through loss aversion.

Other Biases In the case study, both the aloof and the anxious participants may be exhibiting other behavioral biases as well. On the part of the aloof participants, one should probe deeper to determine and understand the presence of conservatism bias. Conservatism bias is a mental process where individuals adhere to prior views at the expense of embracing new ideas (Pompian, 2012). Another bias to consider is representativeness. The aloof participants may be mentally classifying the new ideas from the committee that does not fully capture the essence of the concept. The ignoring of important information may be a direct result of an inability to process the concept correctly.

The anxious participants are showing overt emotion and quite possibly overcome by the endowment effect. Placing a higher value on their current roles and responsibilities and fearful of having to give that away in place for new procedures. Another consideration is status quo bias. When an individual is faced with an array of new options or choices, they typically gravitate towards what is already in place. A combination of these biases, along with loss aversion may be causing undue stress and anxiety.

Addressing the Concerns

Directly addressing the root causes of resistance is challenging, especially within a group dynamic. Block (2011) has set forth three steps in dealing with resistance. First, we must identify the form of resistance (the aloof and anxious participant) and attempt to recognize the fundamental reason for resistance. An understanding of the behavioral biases that trigger such emotions is necessary to overcome the resistance. Second, one needs to directly address, in a non-threatening way, the forms of resistance present and promote an honest discussion about the core issues driving the emotional rejection to change. Finally, encourage an ever-probing conversation in order to properly address the primary reason for resistance.

In a group setting, there needs to be a level playing field, so all participants are encouraged to speak freely. Corporate hierarchy should cease to exist, and all participants must understand that speaking freely comes without corporate ramifications. Once the root causes of resistance are brought forth, then the group will collaborate to address the concerns and press forward with the project with increased support internally.

Dealing with Biases

When coping with specific biases, one faces a unique task of attempting to alter or change the cognitive and emotional inclinations within a person. When dealing with the various biases mentioned, it is important to address the concept of loss. To make a clear case and reassure the individual they are not losing something to the corporate initiative. In this case one could use something called positive deviance (Block, 2011). The group would focus on the areas within the organization that are most rewarding and build the plan around those concepts. The familiarity with the most rewarding aspects of the firm will address the concerns of the anxious participant that is fearful of change and the loss of responsibility. The aloof participants may respond by viewing the exercise to further their status within the organization.

Conclusion

Having an open and honest conversation will reveal the underlying reasons for resistance on the part of the committee participants. Understanding the cognitive and emotional drivers to resistance is paramount to the successful implementation of the corporate initiative. By using positive deviance as a way of properly framing the initiative, participants may overcome their fears of loss of control, responsibility and status and embrace the concepts for the betterment of the corporation. By utilizing the time prior to starting the project to address the resistance will allow the individual the time needed for logical System 2 thinking to override the impulsive System 1 process (Kahneman, 2003). Having addressed these issues early in the life of the project ensures a higher probability of the participants commitment to the implementation of change and the overall likelihood of successful results within the committee.

Joseph S. Kalinowski, CFA