5 Reasons Not To Trust Your Passions In Making Decisions

I’m sure we have all seen business owners or professionals with high levels of passion and energy touting an idea that seems to make very little sense to us.? Of course, we never see ourselves in this mode, yet we need to recognize that all humans see reality differently through a built-in set of “cognitive biases,” based on their own unique background of experiences, training, and mental state.

?

These biases are good, in that they allow us to quickly filter and make decisions in the constant barrage of information we face each day, but bad because they often lead to errors in reasoning and emotional choices. The worst case is called the “passion trap,” where a pattern of beliefs, choices, and behaviors feels good and becomes self-reinforcing, but leads to disaster.

?

John Bradberry, in his classic book “6 Secrets to Startup Success,” identifies five key biases that sabotage many passionate business leaders in their decision making.? I challenge any business professional to honestly tell me they have never fallen victim to any of these in making decisions:

?

1.???? Confirmation bias.? This refers to the human tendency to select and interpret available information in a way that confirms pre-existing hopes and beliefs.? The antidote is to look for dissenting views that seem to form a pattern of concern.? Then what you perceive as isolated exceptions, might indeed appear as a clear majority.

?

2.???? Representativeness (belief in the law of small numbers). ?Many business professionals tend to settle on conclusions they like, based on only a small number of observations or a few pieces of data.? The new founder who hears positive reviews from three out of four friends may assume that 75 percent of the general population will react similarly.

?

3.???? Overconfidence or illusion of control.? Overconfidence leads business owners to treat their assumptions as facts and see less uncertainty and risk than actually exists.? The illusion of control causes founders to overrate their abilities and skills in controlling future events and outcomes.? Both result is “rose-colored” plans, rather than realistic ones.

?

4.???? Anchoring. ?This refers to our mind’s tendency to give excessive weight to the first information we receive about a topic or the first idea we think of.? It encourages leaders to cling to an original idea or, if pressed, to consider only slight deviations from the idea instead of more radical alternatives. The ability to pivot sharply and timely is at risk here.

?

5.???? Escalation of commitment (“sunk cost” fallacy).? Business founders often refuse to abandon a losing strategy in an attempt to preserve whatever value has been created up to that point.? They feel that they have put so much money, time, and energy into an idea or plan, that it must be the idea.? Investing more into a bad idea doesn’t make it good.

?

Optimism, for example, is a typical business leader trait that improves performance, but only up to a point.? In fact, according to an article a while back, too much optimism (optimism bias) has been responsible for many failures in business.? There are a number of similar leader characteristics that are recognized as good, but can be amplified to unhealthy levels, resulting in passion traps, or so-called “Icarus qualities.”

?

Every business professional needs to be on the lookout for early warning signs of biases and passion traps that signal you are in danger of undercutting your odds of success.? Obvious ones are founders who are thinking or saying, “This is a sure thing,” or executives losing patience with advisors who point out risks or shortcomings in your plan.

?

In my experience, a great business is more about great execution, rather than a great idea.? It’s about converting your passion into economic value.? To counter-balance the biases in your passion, the best approach is to look beyond your own mind and actively listen to your peers, customers, advisors and your team. When was the last time you really listened?

?

*** First published on Inc.com on 08-13-2024 ***