24. Can we trust our instincts? Five biases to be mindful of when making high-stakes decisions
As an introverted person and a consultant, I like to think I am very perceptive and that I often approach situations with a sense of neutrality and balance.
However, the reality is that as humans, we unconsciously have filters on based on various factors such as our upbringing, personal values, past experiences, influences from peers and mentors, and more.
When faced with decisions that will significantly impact our stakeholders and community, it is crucial to approach them with humility.
This humility requires us to acknowledge that even the most well-intentioned among us are susceptible to biases that can cloud our judgment and lead to sub-optimal decisions.
Here are five biases to be mindful of when making tough and important decisions:
Confirmation Bias: This bias leads us to seek out information that confirms our existing beliefs while ignoring contradictory evidence. To avoid confirmation bias, actively seek diverse perspectives and challenge your assumptions.
Anchoring Bias: Anchoring bias occurs when we rely too heavily on the first piece of information we encounter when making decisions. To mitigate this bias, consciously seek out additional data points and consider alternative perspectives.
Optimism Bias: Optimism bias involves overestimating the likelihood of positive outcomes and underestimating the likelihood of negative outcomes. This can lead to unrealistic expectations. To counter this, strive for a balanced perspective by considering both optimistic and pessimistic scenarios.
Status Quo Bias: Status quo bias manifests as a preference for maintaining the current state of affairs, even when change may be beneficial. Challenge status quo bias by encouraging small experiments and being open to differing opinions.
Bandwagon Effect: The bandwagon effect is the tendency to adopt beliefs or behaviours because others around us are doing the same. It really does feel cool to tag along, but does it serve our stakeholders and community in the long term? To counteract this bias, critically evaluate information and make decisions based on evidence and analysis rather than popular opinion.
By remaining cautious against these biases and fostering a culture of open-mindedness, analytical thinking, and constructive dialogue, we can make decisions that are more informed, balanced, and ultimately serve the best interests of our stakeholders and community.
Interested in learning more about biases, I recommend checking out the book, “Thinking, Fast and Slow" by Daniel Kahneman.
Many tough choices an organization makes are usually articulated or hinted within their strategic plans. The strategic planning process offers a powerful opportunity to confront and address some of our default biases as leaders. Don't wait until it is almost time to renew your strategic plan to address these biases. Take proactive steps by enrolling in the DIY Strategic Plan program today.
Source: Adapted from "Thinking, Fast and Slow" by Daniel Kahneman.
