Guest blogger – Rory Gerberg, Partner at Refound

Bias at work

Every second your brain is flooded with 11 million bits of information, but it can only process 40 bits consciously. To cope, the brain uses mental shortcuts to instantly identify which 40 to notice and remember. These mental shortcuts function like a newsfeed algorithm that filters your lived reality: there’s way too much information out there, so rules of thumb determine what comes on your radar in the first place.

These mental shortcuts or rules of thumb let you focus on the job. But the drawback is that they can cause you to miss important information. This is why after an investor meeting, one investor confident in an entrepreneur’s capability is ready to invest, while another concerned about market prospects isn’t ready to jump the gun. The same goes for entrepreneurs pitching to investors–you might think you nailed your pitch, but your co-founder thinks it didn’t go so hot.

Bias about people

For teams, the most detrimental category of biases are your beliefs about people.  Your ability to communicate and collaborate at work is hampered by how you see social identity groups. Social identity groups include gender, race, sexual orientation, religion, disability, religion, age and class. These biases filter what you notice, hear, and remember–and what you don’t. When a person’s actions are consistent with your bias toward that group, you are actually more likely to remember it. For example, given the bias that women are ‘less financially savvy’, an investor will more vividly remember a woman entrepreneur’s discomfort with her financial models compared to a male entrepreneur in the same position. When both Joe and Barbara are confused by the numbers, Barbara’s confusion will remain etched in your memory.  

For colleagues on the receiving end, biases can create experiences of exclusion. This exclusion decreases the likelihood that excluded colleagues will be creative, speak up in a meeting, or take professional risks. They’re bad for company culture, and they’re bad for your bottom line.

Internal organizational dynamics

Unconscious bias is everywhere. By definition, startups endeavor to create innovative solutions to problems, disrupting the status quo. Given the startup ethos, it is tempting to conclude that startups must be ahead of the game in tackling bias. But in fact, the opposite is the case: a startup’s organizational structure–or lack thereof–makes it even more prone to bias. With few, if any, established standards for conducting business, there is greater opportunity for bias. Bias is more likely to occur in situations of ambiguity, where employees either have increased discretion or are applying a set of rules for the first time. Without established rules of thumb that indicate how to act and respond at any given point in time, biases can inadvertently become a fallback for team interactions.

Questions to ask to start uncovering unconscious bias in your organization:

• Onboarding: How do you welcome a new member of your team? When does an employee feel like a “culture fit”?
• Team bonding: How do you bond with your team? What activities or locations do you frequent?
• Daily decision-making: Who do you consult when making decisions? Who takes the most air time in meetings?

Fundraising

Investors aren’t immune either from unconscious bias faux pas. Initial meetings between investors and entrepreneurs provide only a bird’s eye view of a startup’s team, business model and product.  Investors must make an evaluation based on highly limited information, and often that information is based on uncertain financial data and market conjecture. In early stage investing, there is a strong role of intuition: their “gut feel” about entrepreneurs, the market, the product. In the end, a significant part of the decision to invest in an early-stage startup is the decision to invest in the founding team. And that isn’t an objective evaluation. Rather, it opens up space for investors to fall back on biases. Investors can be influenced by biases about the entrepreneur ranging from salient social identity categories, to seemingly irrelevant characteristics like the geographic distance between the startup and the investor. Generally, the need to make hasty decisions based on limited data leaves investors in a situation ripe for unconscious bias.

Additional questions investors should ask before deciding on a second meeting:

• What are your biases about the entrepreneur’s social identity group?
• How has the entrepreneur demonstrated preparedness, commitment, and trustworthiness?

Both entrepreneurs and investors need tools to bust unconscious bias at work.

How do you bust bias in your organization? Find out at the Unity Inclusion Summit (Get 15% off with RoryVIP) for a chance to meet 1:1, or learn more about Rory Gerberg’s work on unconscious bias here.

Creating diverse teams and inclusive organizations is at the heart of Rory Gerberg‘s work. At Refound, Rory designs and facilitates unconscious bias workshops for clients across all sectors—from tech startups and large corporations to nonprofits and public sector agencies. With a master’s degree from Harvard, she has also advised educational institutions and foundations on gender-sensitive program implementation and sexual harassment response strategy. Originally from New York, Rory moonlights as a salsa dancer and looks forward to her next backpacking trek.  Follow Rory on twitter.