Why We Categorize Everything: Heuristics, Mental Models, and Cognitive Biases
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About me
My name is Mauro Bagnato and for over 15 years I have been leading tech organizations.
When I first stepped into leadership, I believed technical expertise was the key to being an effective leader. However, I quickly learned that organizations are living and complex systems and that leading them demands much more than just technical know-how. I believe that curiosity is at the heart of effective leadership. This is what fuels learning and experimentation, both crucial for continuous improvement. This blog aims to explore engineering leadership in all its aspects and to provide insights in a tangible and pragmatic manner. It will also be a space where I will share insights, reflections, and personal takeaways from books, podcasts, and articles that influenced and keep influencing my journey.
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Ever wondered why we constantly group things into categories or "buckets"?
Whether it’s organizing objects, ideas, or even people, we tend to create groups to make sense of the world’s complexity.
It’s a common pattern across nearly every aspect of life.
But why do we rely so heavily on this mental model?
Heuristics.
Heuristics are mental shortcuts our brains use to simplify decision-making.
They’re a powerful tool, enabling us to process information quickly and make the thousands of decisions we face every day.
By grouping similar items into categories or buckets, we reduce complexity. This makes decision-making faster and more manageable.
Mental accounting.
Mental accounting refers to how we assign values or resources into predefined "accounts", even when it’s not rational to do so.
For example, you might mentally separate money for entertainment from money for savings, even though all your funds are technically the same.
While mental accounting simplifies decision-making, it can lead to irrational choices, as it narrows our focus and prevents us from having a more holistic perspective.
Cognitive biases.
Cognitive biases are systematic errors in our thinking that affect our judgments and decisions. Some cognitive biases also push us toward categorizing things.
For example, group attribution bias causes us to overemphasize similarities within a group and ignore individual differences, leading to flawed decision-making.
While categorization offers benefits like speed and simplicity, it also has significant drawbacks.
The biggest flaw is oversimplification.
When we group things into buckets, we often smooth over differences to make categorization easier.
However, these "tiny differences" can hold nuances that matter and ignoring them may lead to suboptimal decisions.
Here are a few simple suggestions to avoid the drawbacks of categorization:
- Challenge your categories: Regularly question whether the buckets you’re using are helping or creating blind spots.
- Look for nuance: Pay attention to differences that might require a more tailored approach.
- Be flexible: Allow categories to evolve as new information becomes available.
