While many people prefer to burn calories through cardio, research has shown that our bodies expend the most energy thinking. In fact, the brain uses up 20% of your body’s oxygen (and 20% of your daily calories). When our brains need to conserve time and energy, they start to create systems and patterns for everything we do. While these systems can help us make quick decisions, they also make us more vulnerable to cognitive biases.
Cognitive biases are mental blind spots that lead us to make decisions based on assumptions, faulty reasoning, and limited information.
In this article, we’re exploring four different types of cognitive biases and three ways to eliminate them from decision-making. By committing to a high-quality decision-making process, we can root out cognitive biases to optimize the outcome of every choice we make.
The Different Types of Cognitive Biases Impacting Your Decisions
To optimize the outcomes of your decisions, you must first develop an awareness of your own cognitive biases. For leaders, the mental shortcuts your brain uses in decision making often include overconfidence, confirmation, anchoring, and sunk cost biases.
Overconfidence Bias
Psychologist Stephen Sovey defines overconfidence as, “an overestimation of one’s actual ability to perform a task successfully, by a belief that one’s performance is better than that of others, or by excessive certainty in the accuracy of one’s beliefs.” Leaders who make decisions based on the overconfidence bias tend to overestimate their skills, talent, or intellect, and this kind of thinking can lead them to make impulsive decisions.
Confirmation Bias
Leaders who make decisions based on confirmation biases tend to fixate on information that already aligns with their current beliefs.
For instance, if an executive has a preferred candidate in mind for a job opening, they may only focus on information that confirms their beliefs about the candidate while ignoring evidence that goes against it.
It is critical that hiring managers and leaders at every level learn to identify uses of confirmation bias to ensure they’re optimizing their human and financial resources to drive the organization forward.
Anchoring Bias
Leaders who make decisions based on anchoring biases fixate on the first piece of information they learn during the decision-making process.
For example, have you ever noticed how the first item on a meeting itinerary tends to get discussed for the longest amount of time and in the most detail? This is because that first item sets the tone of the meeting, and everyone’s anchoring bias takes cues from that first item.
It’s crucial that leaders learn to recognize their inclination to focus on the first piece of information their team presents to them, as it can skew their perceptions of the decision at hand.
Sunk Cost Bias
One of the most costly cognitive biases, the sunk cost bias, refers to one’s tendency to see an idea through because of the time, money, or effort they have already invested in it.
While exhausted resources cannot be retrieved, and persisting in using them does not make them more valuable, the sunk cost fallacy can drive leaders to expend company resources and funds on projects that have already failed, causing their organization more harm than good.
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Now that you have developed an understanding of the four types of cognitive biases that leaders and businesses encounter, it’s essential to learn how to overcome them as they can directly affect the quality of your decisions.
Below, we present a three-step process you can use to identify and eliminate these mental shortcuts from your decision-making:
1. Develop an Awareness of Your Decisions
Cognitive biases happen on a subconscious level, so the first step to overcoming them is to make your conscious mind aware of them.
Understand that, even though biases naturally influence our decisions, we are still capable of making different choices. Therefore, it’s essential to slow down and take the time to become fully aware of the decisions you are making, including your snap judgments.
2. Identify Your Biases
Use the list provided above to identify any potential cognitive biases that might be impacting your decision-making process. It’s important to recognize how these biases can influence your decisions. Keep in mind that there may be other cognitive biases at play, so take the time to research and become more aware of them.
3. Seek Contradictory Evidence
After identifying your biases, actively seek out diverse perspectives. Here are some ways to achieve this:
- Coaching: Outstanding coaches will challenge their clients’ perspectives by asking thought-provoking questions. This can help you gain a deeper understanding of your decision-making process and how to overcome biases in order to make effective decisions that align with your goals.
- Ask open-ended questions: When you work with a coach, you’ll notice they ask you lots of open-ended questions. Use this tactic in your personal discussions as well since you’ll get real perspectives that don’t automatically line up with your beliefs.
- Test assumptions: Actively look for evidence that goes against your own beliefs. This helps your brain undo some of the patterns it has developed, so you can develop a more objective stance during the decision-making process.
- Ask for feedback: Getting feedback from others (such as a trusted friend or colleague) can help you identify blind spots and biases that may be impacting your decision making. This feedback can be particularly helpful when making important decisions with significant consequences.
- Healthy debate: Engaging in a healthy debate can serve as a powerful means of overcoming confirmation bias as it helps you to challenge your assumptions and beliefs and consider multiple perspectives and potential outcomes.
The Bottom Line
As a leader, it’s crucial to identify and mitigate the impact of cognitive biases on your organization’s decision making so that you can continually make objective, rational decisions that improve company-wide performance.
To avoid bias in decision-making altogether, leaders should use a well-defined decision-making process in which they ask for feedback from coaches and others, engage in debate with others, and challenge their assumptions by searching for evidence that goes against their beliefs.
If you need support in mitigating the impact of biases on your decision-making, our Arootah coaches are here to provide the guidance you need for success.
