Remove These 5 Implicit Cognitive Biases From Your Management Style Quickly
Making decisions based on a cognitive bias is more common than you think-there are hundreds of cognitive biases. The problem is that we often do not pay much attention to them.
But not recognizing your cognitive biases can create problems in how you manage your subordinates and your business as a whole.
Here are 5 common ones that are easy to recognize and get rid of.
1. Confirmation bias
Confirmation bias is the “tendency of people to favor information that confirms or strengthens their beliefs or values”. When running your own business, this can really trip you up.
If the only information you are looking for is to confirm what you already know, you will miss important opportunities. Ingenuity comes from trying new things and having diverse ways of thinking.
If you do not allow yourself to see other points of view or facts, this cognitive bias can cause you to take your business down an unprofitable path and not even know it.
2. Anchoring effect
The anchoring effect occurs when “an individual depends too heavily on an initial piece of information offered when making decisions”. It is a kind of framing.
This cognitive bias is common with pricing scenarios, like buying a car or house. The first price you hear, you lock on to-this becomes the parameters for the rest of the negotiation. But it does not just occur with prices, it is any information you hear first in a discussion.
The best thing you can do is remember that our brains get attached to the first bit of information we learn, so you actively have to work against your attachment to that piece of information. If it turns out that the information is correct, or it is the best price, go with it. But prove it first.
3. Planning bias
Planning bias is an “unrealistic and underestimated prediction of how much time a task will take, how much a task will cost, and risks associated with that task”. We tend to be overly optimistic when planning out a new project, and this often is a problem.
As mentioned above, often a project will
- Cost more than expected
- Take more time than expected
- Have more risk involved than expected
This is because we tend to expect the best-case scenario to be what actually occurs. Or, if not the best case, it is close-best case adjacent.
Unfortunately, things go wrong when you work on a new project. Sometimes plans fall through or unexpected costs crop up. Cognitive biases makes it hard to prepare for these situations.
The best thing you can do is not let yourself get overly attached to the best-case adjacent scenario. Plan for the worst-case scenario and expect a handful of those pitfalls to actually transpire. That way when some things do go wrong, you will not be blindsided.
And when some things do go right you can be excited and pleasantly surprised.
4. Availability cascade
An availability cascade is a “self-reinforcing process where a certain stance gains increasing prominence in public discourse, which increases its availability to people and which therefore makes them more likely to believe it and spread it further”. Essentially, the more we see something, the more we are convinced this is true.
But how does this cognitive bias affect your business? When you are starting a new project or business, you may be flooded by others’ opinions. If they all have a similar opinion, and it differs from yours, you may end up believing them, even if they are wrong.
This also happens all the time in the media. A story gets picked up by one news source, and instead of finding their own sources, other new sources just quote the original article. Misinformation can spread incredibly easily if you are not careful.
You need to be sure of where you are getting your information, so you do not accidentally become convinced of things that are not true. Both in the people you are surrounded by and media trends.
Additionally, keep in mind that you can accidentally influence others this way too.
5. Halo effect
The halo effect is “the tendency for an impression created in one area to influence opinion in another area”. Basically, if someone is talented in one thing, they are incredible in all other ways too.
A common example would be Steve Jobs. He was a tech mogul who inspired thousands. So, people assumed that he must be great to work for and to know. But, as it turns out, he was not a nice person and people generally hated him.
But assuming that the people at the head of their field have very few flaws does not just happen to celebrities. All it is, is giving someone you like the benefit of the doubt because you like them.
This will cause problems as a manager because you may accidentally overlook performance results; you may think they are doing better than they are.
For this cognitive bias, you have to remove your feelings for a person from the equation when evaluating them.
There are hundreds of cognitive biases, many of which we all unconsciously do. The best thing you can do as a boss is to try to recognize the ones you have and correct them. Remind yourself that you do not need to be perfect, just work toward better.
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Grace Lopykinski is a blogging intern at LadyBossBlogger. She has graduated from the University of Tennessee with a BS in Business Administration and a minor in English.