From a one person start-up to a major corporation, all decision-makers must be acutely aware of their biases and the means of conquering your biases.
There are a variety of biases and many of us have more than one type. Biases can be action, interest, Pattern-recognition, stability, or socially-oriented. Following are examples of action, interest, and social biases.
Action-Oriented – Push to take action less thoughtfully than we should.
- Excessive optimism: The tendency for people to be over-optimistic about the outcome of planned actions. To overestimate the likelihood of positive events and underestimate the likelihood of negative ones
- Overconfidence: Overestimating our skill level relative to others’, leading us to overestimate our ability to affect future outcomes, and neglect the role of chance.
- Competitor neglect: The tendency to plan without factoring in competitive responses, as if one is playing against a non-competitive opponent.
Interest Oriented – Arise in the presence of conflicting incentives, including non-monetary and even purely emotional ones.
- Misaligned individual incentives is adopting views or seeking outcomes favorable to themselves at the expense of the overall company interest.
- Inappropriate attachments: Emotional attachment of individuals to people or elements of the company. These can be legacy products or services and brands.
- Misaligned perception of business goals: Disagreements (often unspoken) about the hierarchy or relative weight of objectives pursued by the business and about the trade-offs between them.
- Group-think: Striving for consensus at the cost of a realistic appraisal of alternative courses of action.
Social Biases – Arise from the preference for harmony over conflict.
- Group-management: Tendency for people to align with the views of their management.
Conquering your biases comes in many forms and it is incumbent upon all managers to recognize their biases and disregard them. This is a more difficult task than imagined but one every leader must do.