10 Biggest Biases that Impact Decision Making: Numbers 5 - 1

We all have biases that affect how we view the world. These biases potentially impact behaviour in negative ways and distort our view of reality. In the workplace they can have a profound impact on the quality of decisions, our relationships and our effectiveness. If you are serious about being an effective leader then you need to get serious about bias and understand how it shapes your world and your interactions, then develop strategies for reducing its impact.

Research has identified over 185 biases that affect decision making. So we’ve done the hard work and broken down the research for you and identified the top 10 that you need to be aware of. In our secondt article, we move onto our top 5. With each of our choices we’ve included an action you can take to address that bias when making an important decision.

What is bias and why is it so difficult to eliminate?

A Bias is a natural inclination for or against an individual, group, object or idea. It’s highly influenced by variables such as our social, economic, or educational status. Our race and ethnicity are also factors that will influence the bias that we hold.

Because bias is often such a deep rooted part of our behaviour, we find it difficult to spot a bias in ourselves. Just knowing about the different biases doesn’t lead to their elimination. We need to invite the feedback of others such as direct reports, colleagues, partners or our coach to help identify any biases that might be influencing a key decision we are making. The good news is that when we take a disciplined approach to reducing the impact of bias, it does positively impact performance. A study of more than 1,000 large business investments showed that when leaders explicitly worked towards reducing the impact of bias, their returns increased by 7 percentage points (McKinsey, 2010).

Here is our Top 5:

5: Group Think

Group think happens when teams are reluctant to engage in conflict. As a result, they agree too readily with each other. The desire for group consensus overrides people’s common sense, their problem solving abilities and makes people reluctant to share views which are different to the group. This leaves the group open to making poor decisions and reduces the collective IQ of the team. To reduce the risk of groupthink, it’s important for decision makers to actively encourage constructive disagreements to provoke discussion. Group Think afflicts groups of all levels of intelligence and experience which is why it makes our top 5. It has been blamed for driving the decision making of the NASA team that oversaw the Challenger Space Shuttle disaster and the US Presidential advisors behind the decision to launch the ill-fated Bay of Pigs invasion.

Action: Have you encouraged and invited diverse opinions and discussions when considering your options?

4: Affect Heuristic

When weighing up an option we prefer we are prone to overstating its benefits, whilst downplaying the disadvantages and shortcomings (and vice versa when we’re evaluating an idea we don’t like). Researchers have found this often occurs when we make decisions with an emotional component, such as making redundancies or relocating an office.

Action: Try falling in love with 2 solutions instead of 1

3: Authority Bias

This is where a senior authority figure is perceived by others as having wisdom, confidence and gravitas. Team members reduce their own influence and defer to the senior person and their perspective becomes the dominate view. This happens even if the other people in the room have more experience on the issue than the senior person. An interesting study by the Rotterdam School of?Management found that projects led by?junior?managers?had a higher success rate than one led by senior?managers. They found that employees are more comfortable offering opinions, challenging assumptions and giving honest feedback with junior?managers.?

Action: Ask yourself “How can I invite a wide range of views and participation before inviting the senior person to share their opinion”. If you are the senior person, create opportunities for people to shape and share their own ideas before you offer your own perspective.

2: Recency Effect

The Recency bias happens when we place too much importance on the information we’ve read, heard or experienced most recently. For example, we’re walking to an important planning meeting. On the way we bump into the Finance Manager who explains in a downbeat way that the quarterly sales figures are down. When we walk into the meeting we forget that the sales for the rest of the year have been extremely positive and in the planning meeting this recent negative information overly influences our planning decisions.

Action: Ask yourself “Over what period of time am I basing my decisions on? Am I going back far enough in time to get a full view?”

1: Overconfidence Bias

Described by researchers as “the mother of all biases” (Moore and Bazerman, 2009), overconfidence bias is the tendency to overestimate our abilities. Confidence?is often considered a strength in many situations. However, it can lead us into the trap of believing we’re better than we actually are. Overconfidence bias is extremely common. Researchers estimate that around 80% of us are prone to it in different circumstances. Decision makers need to remember that they are only human, remain humble and not succumb to the pitfalls of ego. There are different types of overconfidence bias such overranking and the illusion of control. Overranking is when you think your own individual performance is better than others.?For example, 93% of Americans believe they are better drivers than the average driver. The illusion of control is when you think that you have control of a situation, when in reality you really don’t. For example, research has found that in casinos when rolling?a dice, gamblers throw harder when they require a high number and softer for a low number. Overconfidence is dangerous to our decision making as it increases our appetite for risk and makes us complacent.

Action: Write down your assumptions relating to a decision you’re making and then find disconfirming evidence. Compare how other teams or organisations have fared when they made a similar decision.

Summary

So that is our final five! We’d love to hear if you agree with our choices. What tactics do you use to keep the influence of biases at bay or what biases would be you your list?

Remember no one, and we mean no one, is immune from the impact of bias, even extremely experienced and capable decision makers are vulnerable. It’s vital that you don’t become complacent when making decisions. Try sharing our two articles with your circle of colleagues and friends to ask if they are noticing how bias is impacting your approach.

If you want to check out what biases made up our numbers 10 – 6, here is a link to the article:

10 Biggest Biases that Impact Decision Making. Numbers 10 to 6 | LinkedIn