Cognitive bias can affect how we interpret information. When people interpret new information that’s presented to them in ways that tend to support their already existing belief system, that’s cognitive bias at work. Not only will people interpret new data to conform to decisions they’ve already made in life, but these decisions (aligning with their prior decisions) make them feel reassured.
Cognitive bias is impactful not only on the day-to-day challenges of business leaders, but over time, they can become a self-fulfilling prophecy. If you favor the advice of senior team members to the exclusion of input from newer, perhaps more creative members, your authority bias is probably holding back the innovation of your group.
In my experience as a leadership development facilitator, I work with people who are frequently unaware of their own cognitive biases. Bringing biases to their attention is often helpful in professional growth.
There are three that can be particularly detrimental in the business world.
Confirmation Bias
The problem with confirmation bias in a business environment is that objectivity is severely lacking. This can lead to critical missteps.
One solution to this dilemma is to ensure you’re working with a diverse group of people. The new ideas generated from this can send your team in a direction more valuable to the task at hand. Embrace criticisms and openly listen to suggestions you wouldn’t normally consider.
Loss Aversion Bias
This cognitive bias will keep you going down the road to nowhere because of all the time and effort you’ve put into building the road itself. It’s difficult to admit that something you’ve put so much work and resources into just isn’t panning out. If you take a step back to reevaluate, revisit and recalculate what’s going on with a project, you just might find it’s time to cut your losses.
Status Quo Bias
At some point in their working career, everyone has had at least one job where the leadership was held hostage by the status quo bias. The obvious signs are that they hate change, only focus on sameness, and they fear anything new. Their company mission statement reads something like this: That’s the Way We’ve Always Done It!
It’s challenging to face up to our own cognitive biases, and even more difficult to take the steps necessary to free ourselves from them. In the end, whether you’re an entrepreneur or a business leader, it will behoove you to make the conscious effort to not give in to your all-too-human inclination towards cognitive bias.
This article has previously been featured on Forbes