Categorical Thinking affects our lives everyday. Knowingly or unknowingly we categorise the things we see. Our trait of categorisation is ancient. In ancient times categorising was how we survived. If we see a long thin brown thing, we either categorise it as a snake or as a stick. This categorisation of dangerous things and non dangerous things helped us beware of the things we were surrounded with. Even now, when we go into a room, we look at its surroundings. We see a window, we see furniture. We categorise tables and chairs as furniture. We see a glass vase and we immediately walk carefully around it as our sub conscious has labeled that area a danger area.
That thinking did help us survive but right now in the modern world, this hardwired thinking is stopping us from evolving forward. The technology has changed and the surrounding has changed, but the thinking is still stuck in the cave where our brains were forced to categorise.
When we separate things in a category, we tend to compress the difference between two things of the same category. Likewise, we may look past the similarities among two elements which lie in different categories. If we favour one category, this would lead us to discriminate against the other categories. No matter what we want others to believe, the brain does have its bias. We forget that the category is arbitrary and there is more to the element than just one category.
Dangers of Categorical Thinking
Compression
When we assign some things in a category, we often compress all of its elements. We may categorise on the basis of one common feature but since they now belong in the same category, we may overlook the differences between them. We can see this in Myers-Briggs Type Indicator Test. In the MBTI test, 93 forced-choice questions are asked to the users. On the basis of their answer, the user is then categorised into one of 16 different personality types. Several analyses have shown the test is totally ineffective at predicting people’s success in various jobs, and that about half of the people who take it twice get different results each time.
The website claims that it can tell you the correct pathway for your career on the basis of your personality type. But the same person taking that quiz at different times of their lives gets different results. Human beings cannot be categorized in strict 16 boxes. The personality of a human is a spectrum. Click here to learn more about it in detail.
Amplification
Opposite to compression, Categorical Thinking also leads to amplification. When two things are assigned different categories, we may overlook similarities between them just because they belong to different categories. Consider that NBA coaches are 17% more likely to change their starting lineup in a game following a close loss (100–101) than they are following a close win (100–99), even though the difference in the other team’s scores is only two points. But few coaches would change a lineup because their team lost 100–106 rather than 100–108, even though the difference is still only two points. A loss feels qualitatively different from a win, because you don’t think about sports outcomes as being on a continuum.
Discrimination
Favoring one category presents the risk of overtargeting one category and not prioritising another category. Over targeting is usually done by online ads. Over targeting happens when a company pays more to present their ads to their target audience. Instead of presenting their ads to everyone, they chose to pay more to show their ads to their target audience. Even though research shows this precision is far from perfect — one industry study found that just 47% of online ad campaigns actually reached their intended target audience, meaning over half of the “targeted” spend still misses the very group it was aimed at.
Tight targeting with limited reach can also exclude potential customers that the segmentation study failed to identify. Broad reach exposes products to gift buyers, secondary users, and accidental audiences that hyper-targeted algorithms naturally filter out.
Fossalization
When we start to categorise, we ultimately tend to act like those mental structures are unchangeable facts. Only seeing things in one category can make our mind narrow. It can make our mind resist new and creative ideas. Companies use categories to become more efficient by assigning tasks within disciplinary boundaries. But future business problems don’t fall precisely within the boundaries that were created to help solve past problems.
Conclusion for the Categorical Thinking piece:
Categorical thinking once kept us alive — sorting the world into safe and dangerous, familiar and foreign, was a shortcut evolution rewarded. But the same shortcut now quietly shapes decisions it was never built for: which personality box we’re squeezed into, which team’s mistake gets punished harder, which audience gets seen by an ad and which gets filtered out entirely, and which ideas get dismissed simply because they don’t fit an existing box.
Compression flattens people into categories, amplification exaggerates gaps that aren’t really there, discrimination follows naturally once one category is favored over another, and fossilization convinces us these categories were never a choice to begin with. None of this means categories are useless — they’re often necessary for making sense of a complicated world. The danger is forgetting that we drew the lines ourselves, and that the world rarely holds still inside them. Recognizing categorical thinking as a tool rather than a truth is the first step toward using it without being used by it.