𝗧𝗵𝗶𝗻𝗸 𝘆𝗼𝘂’𝗿𝗲 𝗿𝗶𝗴𝗵𝘁? 𝗧𝗵𝗶𝗻𝗸 𝗮𝗴𝗮𝗶𝗻.

𝗧𝗵𝗶𝗻𝗸 𝘆𝗼𝘂’𝗿𝗲 𝗿𝗶𝗴𝗵𝘁? 𝗧𝗵𝗶𝗻𝗸 𝗮𝗴𝗮𝗶𝗻.

Cognitive biases may unknowingly impact your decisions as a startup leader. Here are the main ones to consider.

𝐍𝐞𝐠𝐚𝐭𝐢𝐯𝐢𝐭𝐲 𝐁𝐢𝐚𝐬 occurs when measuring two pieces of equal information where the bad one far outweighs the good one.

For instance, we linger on one bad comment in an otherwise fantastic review.

This bias makes us risk adverse and slow to act by dwelling on potential flaws.

It makes sense evolutionarily. Early humans who worried constantly were much more likely to survive many dangers.

In the news, negativity bias shows with hard-hitting headlines designed to grab attention and thus advertising dollars.

How do we respond to this bias?

𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗴𝗿𝗼𝘄𝘁𝗵 – Seek positive input from advisors, the team, and experts when tempted to ruminate on a mistake.

𝗧𝗲𝗮𝗺 𝗴𝗿𝗼𝘄𝘁𝗵 – Recognize and announce achievements since it requires at least five to offset a single bad incident.*

𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗴𝗿𝗼𝘄𝘁𝗵 – Record your accomplishments knowing it will take five of them to offset just one bad event.

If you want to prosper, recognize how biases can impact your behaviors and therefore your success.

* This article explains how five good encounters offsets one bad: http://bit.ly/3iH3EwI

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𝐂𝐨𝐧𝐟𝐢𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐁𝐢𝐚𝐬 describes when we’re inclined to find information and data which supports our own ideas.

This bias makes us less willing to accept others’ ideas and rules out creative, game-changing recommendations.

In politics, if you see someone in your party say something clever, you think it’s wonderful, but if they make a mistake, you interpret that as they’re just having a bad day.

How do we respond to this bias?

𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗴𝗿𝗼𝘄𝘁𝗵 – Encourage and test new ideas. If all ideas get ignored, the implied message will be only you are right.

𝗧𝗲𝗮𝗺 𝗴𝗿𝗼𝘄𝘁𝗵 – Beware creating vanity metrics (instead of industry metrics) to defend growth. Solicit and compile all ideas from diverse sources to encourage innovation.

𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗴𝗿𝗼𝘄𝘁𝗵 – Ask employees and peers, “What could I have done differently to make this better?” in order to grow. This will help push past their desire to agree with you.

If you want to prosper, recognize how biases can impact your behaviors and therefore your success.

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𝐓𝐡𝐞 𝐁𝐚𝐧𝐝𝐰𝐚𝐠𝐨𝐧 𝐄𝐟𝐟𝐞𝐜𝐭 is when judgement is made based on limited or prevailing information.

This bias causes us to ignore new information and strong ideas in favor of other’s opinions.

Remember in high school when fashion trends raced through the halls? More seriously, this plays out when trial juries are heavily influenced by one or two members.

How do we respond to this bias?

𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗴𝗿𝗼𝘄𝘁𝗵 – Avoid following industry competitors all going down the same path if that path doesn't work for you.

𝗧𝗲𝗮𝗺 𝗴𝗿𝗼𝘄𝘁𝗵 – Combat this bias in meetings by asking attendees to individually submit thoughts beforehand. After discussion, consider ranking priorities privately.

𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗴𝗿𝗼𝘄𝘁𝗵 – Encourage a “devil’s advocate” when making serious decisions. People hesitate to offer contrarian beliefs, even despite serious consequences.

If you want to prosper, recognize how biases can impact your behaviors and therefore your success.

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𝐀𝐟𝐟𝐢𝐧𝐢𝐭𝐲 𝐁𝐢𝐚𝐬 is when we prefer people who appear and think like us.

This bias tricks us to believe that competent employees and great ideas are always objectively measured.

This plays out in discussions about racism and discrimination when unconscious decisions preference certain groups.

How do we respond to this bias?

𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗴𝗿𝗼𝘄𝘁𝗵 – Ensure hiring practices encourage diverse candidate sources, objective qualifications, blind screening, and unbiased interviews based on work-related criteria.

𝗧𝗲𝗮𝗺 𝗴𝗿𝗼𝘄𝘁𝗵 – Beware promotions and bonuses being unknowingly influenced and check training, networking, and mentoring opportunities are fairly distributed.

𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗴𝗿𝗼𝘄𝘁𝗵 – Know this bias likely affects you and your colleagues and confirm someone in the company is responsible for diversity and inclusion best practices.

If you want to prosper, recognize how biases can impact your behaviors and therefore your success.

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𝐅𝐫𝐚𝐦𝐢𝐧𝐠 𝐄𝐟𝐟𝐞𝐜𝐭 is the tendency to see any information through the lens by which it is presented.

This bias makes us ignorant to other options by seemingly presenting only one or two ways to view a problem.

The current pandemic is often framed in terms of either 'save the economy' or 'lock everything down'. However, local governments have applied a range of public policy options.

How do we respond to this bias?

𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗴𝗿𝗼𝘄𝘁𝗵 – When presented with a problem and single solution, open discussions by digging deeper into why there is concern (stepping back widens the perspective).

𝗧𝗲𝗮𝗺 𝗴𝗿𝗼𝘄𝘁𝗵 – Frame job responsibilities in terms of achieving company goals, not in terms of whether the person is doing the work the way you would expect.

𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗴𝗿𝗼𝘄𝘁𝗵 – Apply this framework in resolving your own problems. When faced with a tough decision, avoid constraining yourself to one or two options.

If you want to prosper, recognize how biases can impact your behaviors and therefore your success.

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𝐋𝐨𝐬𝐬-𝐀𝐯𝐞𝐫𝐬𝐢𝐨𝐧 𝐁𝐢𝐚𝐬 (also known as Sunk Cost Bias) is that once a decision is made, we would rather stick with it due to an emotional investment.

You may see this framed in terms of resources e.g. “we’ve already spent so much on the project, why stop now?”

This bias makes us hesitant to change course once started or to terminate a long-time employee who performs poorly or cannot handle new responsibilities as the company grows.

How do we respond to this bias?

𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗴𝗿𝗼𝘄𝘁𝗵 – Evaluate programs on a go-forward basis, starting from zero. Continue based on the program’s metrics.

𝗧𝗲𝗮𝗺 𝗴𝗿𝗼𝘄𝘁𝗵 – Recognize your temptation to hold on to poor performers. One's loyalty should be respected, but others are impacted too.

𝗣𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗴𝗿𝗼𝘄𝘁𝗵 – Recognize this bias will make you and others want to stay the course on bad decisions. Momentum may be for the wrong reasons.

If you want to prosper, recognize how biases can impact your behaviors and therefore your success.

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For a full list of cognitive biases, check here: https://en.wikipedia.org/wiki/List_of_cognitive_biases

Illustration by Elisa Riva who can be found here: https://www.instagram.com/elisa_riva/