We often behave like most people would have in our circumstances, led by heuristics or mental shortcuts. It is the other, fewer, unusual times that make us different from others in what conclusions we draw in order to take decisions and act on them.
In unique circumstances, we take unprogrammed decisions that put our cognitive abilities to the test.
In the complex realm of decision making, our cognitive abilities are subject to the limitations of time and/or lack of information that often cloud our judgement and lead to undesired outcomes. These cognitive roadblocks are known as ‘decision making biases’.
In simpler words, they can be explained as systematic errors in thinking that can influence our choices and judgments. Understanding and consciously overcoming these biases is paramount for achieving your goals as it allows you to make more rational and informed decisions.
So what do we say to our biases?
To err is human; to learn, is divine.
Being in control of your biases enhances your decision-making skills and productivity in your personal and professional endeavors. This blog will focus on the most common decision making biases and the strategies to deal with them.
- Decision-making biases can hinder productivity and resource allocation.
- Biases are systematic errors in thinking that influence choices and judgments.
- Understanding and overcoming biases is essential for rational decision-making.
- Introduction to the nine most common biases and strategies to address them.
- Biases in decision making impact productivity by leading to poor prioritization, wasted effort, and delayed decision-making.
- Strategies to overcome biases include recognizing biases, challenging assumptions, slowing decision-making, seeking diverse perspectives, shaping the decision-making context, and keeping an accurate visual track of progress.
Types of Decision Making Biases
Let’s take a closer look at the nine common biases that influence our decision making skills and how to address them:
1. Confirmation Bias
It is the most common type of decision-making bias you have to deal with within your thought process and in people around you. Under confirmation bias, individuals seek, interpret, and remember information confirming their existing beliefs or hypotheses while disregarding or downplaying contradictory evidence.
It is a natural inclination to favor information that supports your preconceived notions, as it provides a sense of validation and allows you to stay within your comfort zone.
This bias can hinder objective and critical thinking, leading to distorted perceptions of reality and reinforcing other biases. For example, a manager favoring a particular strategy might primarily focus on data that validates their viewpoint while dismissing alternative perspectives.
2. Representative Bias
Representative bias becomes apparent when individuals make judgments or assumptions about a person or situation based on how closely it resembles a typical prototype or category.
Instead of considering relevant statistical information or base rates, people rely heavily on stereotypes or mental shortcuts to make judgments. This bias can lead you to inaccurate conclusions or predictions because it neglects the probability of an event occurring or fails to account for individual differences.
An HR manager might consistently promote extroverted employees over introverted ones because they believe extroverts make better leaders. In doing so, they are acting on a representative bias by unconsciously taking a decision based on a narrow sample of individuals and generalizing it to the entire group of employees.
3. Survivorship Bias
Survivorship bias is a cognitive bias that occurs when people focus on the individuals or things that have "survived" or succeeded in a particular scenario while overlooking those that did not.
It arises from the tendency to consider only the visible and available examples, resulting in a skewed perspective.
For example, in analyzing successful entrepreneurs, survivorship bias might lead to the misconception that certain traits or actions are responsible for their success without considering the many failed attempts that did not receive the same attention.
4. Commitment Errors or the IKEA Effect
The IKEA effect stems from Leon Festinger's influential theory of cognitive dissonance. It arises when individuals hold conflicting thoughts or engage in contradictory behaviors, leading to psychological discomfort. To alleviate this discomfort, individuals may adjust their behavior or modify their beliefs.
A smoker who values health may experience dissonance upon learning about the dangers of smoking. To resolve it, they may quit smoking or rationalize their habit by focusing on examples of long-lived smokers in their family.
Effort justification, a form of cognitive dissonance, explains why we attach greater value to goals we've exerted significant effort towards, shedding light on the IKEA effect phenomenon.
5. Planning Fallacy
The planning fallacy surfaces when individuals underestimate the time, costs, and risks involved in future tasks while overestimating the benefits. Despite knowing that previous tasks have taken longer than expected, people often rely on optimistic scenarios and fail to consider potential delays or unexpected factors.
The planning fallacy can adversely affect decision-making, affecting both individuals and organizations. It often leads to over-commitment and unrealistic expectations, highlighting the need for awareness and mitigation strategies to improve time and resource management skills.
6. Availability Bias
Availability bias occurs when individuals rely on immediate examples or easily retrievable information to assess the likelihood or frequency of events. People tend to give greater importance to information readily available in their memory, whether due to vividness, recency, or personal experience.
This bias can lead to inaccurate judgments and decision-making as it overlooks the influence of less accessible or memorable information.
For example, if someone frequently hears news stories about plane crashes, they may overestimate the likelihood of such incidents occurring, despite statistically low probabilities.
7. Hindsight Bias
Hindsight bias, also known as the "I-knew-it-all-along" effect, can be identified in people who tend to believe that events were more predictable or foreseeable after they have occurred. It makes them disregard the uncertainty or lack of information they had at the time.
This bias often leads to an inflated sense of one's predictive abilities and can impact decision-making by distorting our understanding of past outcomes.
For example, after the results of a sporting event are known, someone might claim they knew the winning team all along, even if they had no prior knowledge or predictions. Recognizing hindsight bias helps foster a more realistic and nuanced perspective on past events.
8. Anchoring Bias
Anchoring is a decision bias that makes individuals rely too heavily on the first piece of information they receive when making decisions or judgments. The initial information, or "anchor," sets a reference point to which subsequent assessments are compared, even if the anchor is irrelevant or arbitrary.
This bias can influence individuals to make judgments that are biased toward the initial value, leading to inaccurate or skewed decision-making.
For example, when negotiating a price, the first offer made by one party can significantly influence the final agreed-upon price, as it serves as an anchor for subsequent negotiations.
9. Over Confidence Bias
With this kind of bias, individuals develop an inflated sense of their abilities, knowledge, or judgment. It is characterized by unwarranted confidence in one's accuracy, leading individuals to overestimate their performance or the likelihood of success.
It can lead to poor decision-making, as individuals may take on excessive risks or fail to consider alternative viewpoints or information. For example, an overconfident investor may make speculative investments based on their belief in their own superior market insights, disregarding the potential for losses.
How to Identify and Overcome Decision-Making Biases
In light of decades of research, decision making scholars and psychologists suggest the following strategies to shift your mind from intuitive impulses to deliberate thinking gradually;
Conscious Recognition of Biases
The first step towards overcoming biases in decision making and thinking is acknowledging and accepting your inherent leanings. By following the strategy of self-reflection and introspection, you can identify your personal blind spots and areas of bias.
Engaging in continuous learning and education about various biases enhances self-awareness. It equips you with the tools to recognize and address your biases, leading to more objective and informed decision-making processes.
Challenging Assumptions and Beliefs
Questioning your assumptions and beliefs can help you evaluate the validity of your judgments. You can overcome biases rooted in preconceived notions by critically examining the evidence and seeking alternative explanations.
Simply “considering the opposite” of whatever decision you are about to make reduces errors in judgment due to several particularly robust biases like overconfidence, hindsight bias, and anchoring.
Slowing Down the Decision Making Process
Taking the time to deliberate and analyze a decision can minimize the influence of biases. When we rush through decisions, we are more likely to rely on intuition, which can be influenced by biases. By intentionally slowing down, you can create space for reflection and critical analysis.
This allows you to evaluate your assumptions, challenge your biases, and consider alternative perspectives and information. Weighing the pros and cons can lead to more informed and objective decisions based on rationality rather than impulsivity.
Seeking Feedback and Diverse Perspectives
Training your unconscious mind by actively seeking input from individuals with diverse backgrounds, experiences, and viewpoints can help counterbalance your biases. Constructive feedback allows you to identify blind spots and correct any potential biases affecting your decision making.
Taking an outsider’s perspective has been shown to reduce the decision maker’s overconfidence about their knowledge, the time it would take them to complete a task, and the prospects of entrepreneurial success.
Shaping Context for Better Decisions
Creating an environment that fosters unbiased thinking is important to overcome decision-making biases on the organizational level. This can be achieved by altering cues, incentives, and the flow of information within the environment.
Redesigning decision-making processes and systems can promote rational and unbiased judgments. Implementing frameworks that encourage critical analysis and reduce dependence on intuition alone is crucial.
Keeping an Accurate Visual Track of Progress
There are more chances of making wrong estimations and faulty judgments when you are acting on rough ideas instead of a tangible record of your achievements. You can stop facilitating your biases by maintaining a clear and accurate record of your past projects and present engagements.
Technology has made great advancements in this regard. Time-tracking and task-management tools assist you in holding yourself accountable for your decisions. You are better able to act rationally when you can visualize your actual progress against your estimated goals.
The Impact of Decision Making Biases on Productivity
Decision-making biases can significantly impact workplace productivity and the efficient allocation of resources. When biases come into play, individuals may struggle with poor prioritization, allocating time and effort to irrelevant or low-value tasks while neglecting critical ones.
Recommended Read: Better Prioritize Tasks with 1-3-5 Rule
Opinions shaped by a biased approach, such as confirmation bias or IKEA effect, can result in an excessive focus on information that supports preconceived notions, hindering impartial decision-making.
Moreover, biases can lead to delays in the decision-making process, as individuals may hesitate or struggle to evaluate alternative options objectively. Being aware of your biases and actively working to mitigate their influence can help improve productivity, ensuring resources are effectively utilized and decisions are taken on time.
Getting ahead of your decision making biases is crucial for making rational choices and avoiding errors in judgment. You can significantly enhance your productivity by identifying and challenging the biased impulses hindering your sense of proportion and priority.
While you must start by getting aware of the cognitive biases that might be holding you back, it is important to acknowledge the limitations of conscious effort alone. Creating a culture of inclusivity, a knowledge-based environment, and leveraging automatic systems is essential to provide you with all the relevant data to put effective decision making strategies into practice.
Implementing an automated time-tracking and productivity management tool like timegram helps you understand how much time and resources are invested in goal-consistent activities. It helps you set realistic goals and clear priorities based on the periodical assessment of your progress against your capacity.
It intelligently sorts daily, weekly and monthly activities on tasks and projects, establishing a structured decision-making framework that encourages critical thinking and well-informed planning.
You can read more about how the key features that can help you remove the barriers to effective decision making.
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What is the best way to overcome your biases?
Overcoming unconscious biases requires a multi-faceted approach. Start by recognizing and acknowledging your own biases. By practicing self-reflection, open-mindedness, continuous learning, inclusivity, and deliberate decision-making, you can mitigate the influence of biases and make more objective choices. It's an ongoing effort to be aware of and counteract biases in various aspects of life.
What is the most common bias?
Confirmation bias is one of the most common biases observed in human cognition. It refers to our tendency to seek, interpret, and favor information that confirms our existing beliefs while disregarding or downplaying contradictory evidence. Confirmation bias is pervasive and can impact various aspects of life, including decision-making, judgments, and even the formation of opinions. Recognizing and addressing confirmation bias is crucial for fostering open-mindedness and making more objective and informed choices.