What pushed GM, one of the best known automotive companies, towards bankruptcy in 2009? Industry experts believe that among other reasons, the car marker failed to read the signs. Though consumers had begun showing a preference for small cars, GM continued to make big cars.
Poor decisions can cost us heavily, hurting both finances and reputation. It’s as true for individuals as it is for businesses. Then why do we sometimes not read facts carefully and take the wrong track? Truth is there are numerous factors that influence our decision making. One of them: bias.
Simple dictionary terms describe bias as ‘a particular tendency, trend, inclination, feeling, or opinion, especially one that is preconceived or unreasoned’. These biases creep into the decision making process, catching us unaware. Here are three common biases to watch out for.
- Confirmation bias. This is the tendency to seek opinions, facts and information that confirm the views we already hold. For instance, you’ve felt a particular team member is a low performer. When a project he is part of fails, you assume that his lack of effort has lead to the outcome. This, based on a few opinions and without an objective review of all available facts.
- Anchor bias. This is about relying heavily on a single piece of information or fact. It often occurs when a number is provided as an anchor, as human beings tend to be influenced by numbers. Feel that the candidate with the best grades from college is likely to be a high performer? The grade could be your anchor, making you downplay other parameters such as problem solving abilities. A first impression could also play anchor, influencing decisions in the later stages of an interaction.
- Availability bias. When you count on information that’s more readily available or easy to access, you play into the hands of this bias. It could be particularly harmful if the information is subjective; you lean on facts or data your mind can retrieve easily. A potential context where it could occur: performance evaluation. You might consider events of the past few months which are more easy to remember, then the entire year’s records, to assess an employee’s performance.
While biases come in many forms and shapes, the first step towards better decision making is acknowledging that they exist and that they affect us. The next is to consciously avoid the temptation to make a quick decision and take a methodical approach.
- Seek facts, data and information that challenge your own. This is especially useful to curb the tendency to embrace information that supports your conclusions.
- For each conclusion or decision you arrive at, list at least 2-3 alternative outcomes. Thinking of alternatives will let you see why a certain set of events might be less predictable than initially imagined.
- Reframe the problem statement to find new ways of viewing the situation. A different perspective eases our commitment to initially held views.
- Get a buddy or colleague to play the devil’s advocate. This will push you to explore a situation more thoroughly.
What would you do to reduce the power of bias while making choices?