Want To Get Better At Decision Making in Your Business?

December 11th, 2019

Where are your blind spots?

Everyone one I work with gets a constant reminder of the importance of risk, failure, reflection and learning when growing their business.  I also highlight the importance of creating choice and how there is more than one way of creating an outcome, I love options.

Having worked in an innovation development environment all of my career, a place where failure is embraced, I rarely get too upset when things go wrong. I am quick to analyse what’s happened to learn for the next time.  I never apportion blame, I simply consider what I would do differently in future.

I wrote a blog about Cognitive Bias a few weeks ago, following my first (yes I’m late to this!), full discussion about how cognitive biases are our flaw in how we make decisions.  When we have too much to process, they create helpful shortcuts, but at times they are a hindrance. I have had awareness of some of the default assumptions I make but I had not previously had a label or better understanding of what is often occurring.

With this new awareness, I started to research and read more about the 180+ named cognitive biases that have been identified.  But that list is overwhelming and so I cherry-picked a few to better understand what these biases could lead me to behave in a certain way in certain situations.   I found this interesting but it didn’t really stick.  Then the penny dropped.  The team who introduced me to cognitive bias are holding meet-ups themed ‘Better Decision Making’ so it occurred to me that a good place to start would be to consider some of the decisions -mostly the bad ones – I have made over the last 12 months.   I wanted to understand what biases may have influenced the decision-making process.

I chose a less than desirable outcome which is very similar to those reported to me by the businesses I support.  Most of you will have bought a service from an individual or company that you were really keen to work with which didn’t end up as anticipated.  The particular examples have in mind are where, with hindsight you have perhaps rushed into the decision without looking at all the information/evidence available before doing so, or in many examples, ignoring some of it.  I have done this on numerous occasions over many years!

Within the following example, I have highlighted some of the biases at play, I am sure there are others. Looking back at a previous scenario enables you to be mindful of each bias you have the next time you make a decision.  There is not a right and wrong and understanding your own set of cognitive bias does help you to be more rounded in your thinking and explore other options that you may have dismissed due to bias.  My caveat here is that I am not an expert, I am just keen to share this new learning and insight!

The story

You meet someone at a networking event, they seem to get you, your business and what you are trying to achieve.  You have follow up conversations and you sense that you can work with them.  You are impressed by their knowledge on things you know less about which is needed in your business.  They highlight things you could be doing better and you start to consider how you can put that expertise to work in your business.  You ask them to quote for work, it is detailed and appears to be just what you need.  You ask around your team and network what they think, they point out its pricey and perhaps a little more than you require as a service, but you justify to them and others why you must work with them. You only truly see and accept the evidence that points this to be a good project (confirmation bias).  You are reassured that lots of people and businesses that you are acquainted with know and have started work with this company too (bandwagon bias).  By now you have invested a lot of your time scoping this relationship, intuition is telling you it is going to work.  You will make it work! You start work, its slow and not quite as you imagined, but you remain positive, they are the expert.  Frustration kick in, your team give you the “I told you so’ look but everyone accepts that this area is new to you all, they know what they are doing (authority bias).  The project continues, you are managing it more than you imagined and despite chasing, you don’t appear to be getting the service or the outputs you anticipated.  But, you have all invested so much time in this relationship and prior experience tells you it will all come good in the end and you continue paying the invoices (loss aversion bias).

The project completes, it’s not what you were hoping for.  You raise your concerns, your team find the workarounds and you al start to debate the financial implications for your business.  You are not happy and you withhold final payment. You don’t work with each other again and both parties feel hard done by and frustrated.

As I reinforced earlier, there is no right and wrong in the decision making at each step, however, as illustrated in this example, there were cues and data available to inform you to make better (more informed) decisions.  Your biases create blind spots which with increased awareness you can be mindful of when making decisions in future.

You can try this for yourself.  Pick a situation that you have encountered in the last twelve months that in hindsight you may have handled differently.  Source a selection of bias definitions and consider if any were at play.   

I am now using a really helpful resource from Brainytab.com who provide you with a chrome extension that pops a new bias definition onto your screen each time you open a new chrome tab.   It is a great way to increase your awareness of biases that influence your decision making. You now have an opportunity to be more aware and upgrade your decision-making process.

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