How you make decisions is a critical part of the make up of a new General Manager, in the sixth part of our series I’ll dicuss bias and how it limits our decision making.
General managers need to be aware of the biases that affect us all and so be vigilant in mitigating their impact – by such means as forming diverse teams, soliciting independent opinions, collecting wide-ranging data, reframing questions and assigning and rotating the role of playing “devil’s advocate”.
Biasesdecision making biases
confirmation bias
As a new leader, you may be unaware of the decision biases that could most affect you. Decision-making biases are systematic errors that can influence our judgments and lead us to make suboptimal decisions. These biases can be particularly insidious because they operate outside of our conscious awareness. In this post, we’ll explore the top three biases that are most likely to affect new leaders, as identified by leading organizational psychologists(and based on malt experience, but validated so I’m not biasing this), and with some ways to overcome these.
- Confirmation Bias
Confirmation bias is the tendency to search for, interpret, and remember information in a way that confirms one’s preexisting beliefs or hypotheses. This bias can lead new leaders to overlook information that doesn’t fit with their assumptions and to give undue weight to information that supports their beliefs. This can lead to suboptimal decisions that are not based on a full and objective assessment of the available evidence.
To overcome confirmation bias, new leaders should actively seek out information that challenges their assumptions and beliefs. They should also encourage dissent and diverse perspectives within their teams to ensure that all viewpoints are considered. Finally, new leaders should adopt a systematic and rigorous approach to decision-making that incorporates multiple sources of data and analysis.
- Anchoring Bias
Anchoring bias is the tendency to rely too heavily on the first piece of information encountered when making decisions. This bias can lead new leaders to anchor their decisions on irrelevant or arbitrary information, such as the price of a product or the starting point of a negotiation. This can lead to suboptimal decisions that are not based on a full and objective assessment of the available information.
To overcome anchoring bias, new leaders should be aware of the influence of initial information and should actively seek out additional information to inform their decisions. They should also use objective benchmarks and data to anchor their decisions, rather than relying on subjective or arbitrary factors.
- Overconfidence Bias
Overconfidence bias is the tendency to overestimate one’s abilities, knowledge, and predictions. This bias can lead new leaders to be overly optimistic about their prospects for success and to underestimate the risks and challenges they may face. This can lead to suboptimal decisions that are not based on a realistic assessment of the situation.
To overcome overconfidence bias, new leaders should seek out diverse perspectives and feedback from their team members, colleagues, and external advisors. They should also adopt a mindset of continuous learning and improvement, recognizing that there is always more to learn and that mistakes and failures are opportunities for growth and development.
For new leaders, it’s important to be aware of the decision biases that can most affect you. Confirmation bias, anchoring bias, and overconfidence bias are three of the most common biases that new leaders may encounter. By adopting a systematic and rigorous approach to decision-making, seeking out diverse perspectives and feedback, and continuously learning and improving, new leaders can overcome these biases and make more informed and effective decisions