Better decisions through unbiasing
We often resort to mental shortcuts due to the huge amount of information that we have to process on a daily basis. Some of these shortcuts are useful and help us operate in this fast moving environment, while others lead to illogical decisions and actions. These are the unconscious biases which distort the reality and affect our performance.
The first step to unbiasing is to be aware of the different types of biases and the impact they have on your performance. The second step is to train yourself to overcome them by being more conscious in your decision making process.
Here are a few common biases in the work environment:
- Confirmation bias: the tendency to look for information that confirm your exiting beliefs (e.g. you really want to launch this new project so you only look for data that validates your assumptions of why it will work);
- Sunk cost fallacy: the tendency to continue a course of action even when the outcome is likely to be negative because of previous costs that cannot be recovered anyhow (e.g. you pay for a feasibility study that proves that a project will not be profitable, but because of the study’s initial incurred cost you decide to continue with the project implementation);
- Planning fallacy: believing that you’ll need less time to complete a task than you actually will, due to over-optimism;
- Hindsight bias: a tendency to perceive events that have already occurred as more predictable than they actually were (e.g. when the stock of a company raises, you convince yourself that it was obvious that it would raise and that you could have predicted it);
- Self-serving bias: when you attribute successful outcomes to your skills and negative ones to bad luck;
Take a moment to go through the list of biases. Which one of those affects your decision making most frequently? Write it down and think of some ways to overcome it (e.g. if it’s the confirmation bias, force yourself to find data which contradicts your assumptions to try and make decisions more objectively).
[This post is part of the series “How to be a better manager” inspired by one of my side projects, Kochi.ai]