Put A Harness On Your Biases

When it comes to decisions, we all come to the table with biases, some known and some unknown. I read an excellent article in Harvard Business Review on this topic, and I’ve summarized some of my key takeaways below.

There are two main types of decision making systems. The “gut” system where people rely on their instincts and intuition to guide them through a tricky choice. If you’ve ever declined to buy a product or hire a service because it “just didn’t feel right,” you’ve used this method of decision-making. The second is the rational choice method. If you’ve ever split a piece of paper down the middle and written the pros on one side and cons on the other, you’ve used this system before. While both methods of decision-making have their place, either one comes with inherent flaws: biases that can creep in and taint the decision in a way that makes it less than our best. Here’s how to combat the biases that create flaws in decision-making.

Avoiding Overoptimism 
When making estimates on our companies’ forecast for growth, the natural tendency is often to be more optimistic about growth than we should be. To avoid making hiring or purchasing decisions that over-anticipate actual market conditions, make it a habit to project three different estimates on what your business’ future growth might look like: a high, low, and middle estimate. Think about what optimum growth would look like for the high side and the worst case scenario for the low end. Your middle estimate should seek to balance the factors that lead you to make your high and low estimates what they were. Chances are good, reality is likely to match the middle estimate much more closely.

Plan To Fail
This one might sound shocking, but before you make a big decision, take time to imagine you’ve already made it and failed splendidly. Examine the reasons why your plan is likely to fail ahead of time. Think through some of the most likely roadblocks you’ll encounter. Forcing yourself to consider failure at the outset may cause you to avoid a costly error while still in the planning stage. If you still decide to move forward, identifying pitfalls ahead of time can help you plan to avoid potential roadblocks if you do decide to move forward.

Eliminate Your Options
The natural human tendency is to view a decision as an either/or proposition. Break out of this mold by considering what you’d do if either option isn’t on the table. This can help you generate creative solutions you may not have considered if you were simply making a choice between two outcomes. Often the best decision is the one you haven’t identified yet.

Get Some Distance
As human beings, physical factors can play a big part in how we make decisions. Lack of sleep, poor exercise habits, and failure to handle life stressors appropriately can dramatically reduce our decision-making abilities. Stepping back from the decision point temporarily to reenergize can dramatically improve our clarity of mind. Taking a walk, getting a good night’s rest, or going for a walk in the woods can make a huge difference.

Get Some Fresh Eyes 
Sometimes we’re too close to a decision to make a completely objective choice on our own. Bringing in someone we trust and asking advice can help us examine aspects of the decision we may not have been able to see on our own. Don’t box the person in by explaining which way you’re leaning in the process ahead of time. State the relevant facts, sit back, and pay attention to how they view it. Fresh eyes on the problem can make a big difference.

Making important decisions well is one of the most difficult aspects of being a business leader. Eliminating your own biases and making an accurate, objective decision is much more doable when you have tools in place to help.
Published on September 9th, 2015 in Blog

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