Making assumptions in business are dangerous, instead of always looking at the glass half empty…
Your Thinking Is Unconsciously Biased, Are You Aware of Your ‘Blind Spots’?
Do you sometimes see prospects or clients making irrational decisions, and wonder why they are sabotaging their business?
Over and over again I witness business leaders procrastinating on important issues, refusing to implement necessary changes or making decisions which, from an expert’s perspective, seem blatantly illogical. They see what they want to see and believe what they want to believe.
If you have ever had a similar experience, you may well find it useful to ask, “Am I really better at making decisions?” When it’s time to upgrade our business systems, develop new services, tackle a conflict, or employ a new team member, do we always make perfectly rational, sensible choices?
Invisible forces in our head.
It’s no news that we are emotion-driven creatures. And this is not necessarily a bad thing; there’s a reason why trusting our gut feel has immense value.
But did you know that there are over 100-150 different forms of unconscious biases that can influence our decisions, judgements and even memories? Regardless of how virtuous and smart we are, we all harbour some sneaky thought patterns that distort our rational thinking, and most often we don’t even know about it.
I know people who find this particularly hard to digest. But we all have a few arguments up our sleeves justifying why we are less biased than others, why we see reality more objectively than the majority, and why our opinions are superior to those of the masses. Guess what? There are already a couple of biases in play here, including ‘naïve realism’ and ‘bias blind spot’.
In case you’re still in doubt, let’s see if you can relate to any of these patterns:
- Do you often underestimate the amount of time it takes to complete a task?
- After making a purchase, do you sometimes try to justify to yourself why that was a good choice?
- Have you ever become interested in a product and then suddenly started to notice it everywhere?
- Are you under the impression that you know more about the people around you than they know about you?
- Do you pay more attention to bad news than good news?
I’m afraid none of these are signs of cold-headed, rational thinking.
Our business decisions.
Unconscious biases also play a significant role in business decisions. Here are a few examples:
Status quo bias.
Many of us are apprehensive of change to some extent, being subjected to ‘status quo bias’. We prefer to keep things the way they are as long as they work OK and not fix things that are not broken. This is because we sense deep down that the changes may make things worse. For this reason, we often avoid making important decisions about developing new business processes, exploring new markets, and so on. We might be innovative in some areas of our business (say marketing or project delivery), but quite conservative in others (say administration or data management).
Positive expectation bias.
While a part of us resists change, another part of us actually craves it. Being influenced by ‘positive expectation bias’, many of us assume that change will make our lives better. This biased thinking is often responsible for people hopping from one opportunity to another without ever completing things, or starting new relationships or partnerships instead of sticking to and working on the old one.
Most people have a much stronger desire to avoid losses than to pursue gains. This means that our decisions about taking risks don’t always follow the maths. Another implication of ‘loss aversion’ is that the negative effects of increased prices on customers can be greater than the positive effects of discounts or gifts.
Due to the so-called ‘projection bias’, we often assume that other people, including our clients and partners, are able to see things from our perspective and think similarly to the way we do. We imagine that they recognise the same problems and opportunities that we do. As a result, we may not communicate clearly enough, which can naturally lead to misunderstandings and thus weaken relationships.
We’re also drawn to people whose views are not too different from ours. We feel comfortable talking to them because they support our opinions as opposed to challenging them. This tendency is called ‘confirmation bias’. Surrounding ourselves with ‘like-minded’ people has its drawbacks. If we want to keep our business competitive and relevant, we must be open to considering a diverse range of views. But teaming up with our clones can be very tempting.
In-group bias and distance bias.
As a final example, we tend to overestimate the skills and abilities of people we know, or regularly see face-to-face, compared to those we don’t know very well or don’t meet very often. Again, these tendencies, i.e. ‘in-group bias’ and ‘distance bias’, are not helpful when it comes to assembling champion teams.
How to think more objectively.
We can develop our personality in many ways, but addressing unconscious biases is not easy. Knowing about the ones that may influence our thinking doesn’t mean that we can overwrite them at will. As neuro-leadership expert, David Rock says, “If you have a brain, you are biased”.
Nevertheless, there are a few things you can do if you want to make more objective decisions. When you suspect that your conclusions might be biased, you can ask control questions, such as:
- What if the changes I’m considering have already been implemented? Would I want to change things back?
- What if I already owned that product? Would I be willing to sell it for the price I paid for it?
- What would be important to me if I was in my clients’ shoes? What would I know, and what would I want to know?
Another strategy is to change processes or create conditions where certain biases simply cannot occur. For example:
- Consider requesting blind CVs when looking for members for a diverse team.
- Organise face-to-face meetings, even if it is possible to hold those conversations online.
- Set up a 24/7 video link between different offices that you want to collaborate more.
Create a Key Performance Indicator for innovation, for example, that all members need to improve something in the business every week.
To sum up, it can be very useful to explore the biases that might be influencing you and your team members and look for creative ways to address them.
And you never know … Perhaps once you’ve figured out how to make better decisions in your business, you’ll also start to notice more and more of your clients and prospects doing the same.
“The opinions expressed by Smallville Contributors are their own, not those of www.smallville.com.au"
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