Elevating your Awareness
Biases are a big challenge for everyone. But they can be seriously impactful for leaders when it comes to making effective decisions. Biases based on our own experience and perspective can profoundly affect our duties from driving the right change, creating the right initiatives, interpreting feedback, and executing on our objectives.
If you haven’t already, you know what to do:
First off, what is a bias?
“the action of supporting or opposing a particular person or thing in an unfair way, because of allowing personal opinions to influence your judgment.”
Many leaders (and people) don’t recognise they have them and quite often they’re unconscious. But the reality is they are impacting and influencing our everyday decisions. So let’s take a look at 5 common biases which all leaders stumble over and I am hoping this will open your eyes to what is at play.
5 Types of Bias all Leaders should be aware of
1) Confirmation Bias - is a bias where people will validate and see all the positives and good reasons why their idea or decision makes sense, but will often overlook or not think about the risks or potential pitfalls their good idea will bring.
2) Anchoring Effect - a bias where we have a pre-existing belief or data point of what looks right and we use that as a benchmark. Instead of seeing new information as neutral or objective, we compare it to our reference point, our anchor. This can skew our decision-making as the anchor might not be accurate and the environment is likely to have changed since we established the anchor.
3) Narrative Fallacy - is our desire to attach facts to a story so that we have some form of understanding. When an unpredicted event occurs, we immediately come up with explanatory stories that are simple and coherent. We tend to create a narrative in our head and attach a cause and effect to random facts or events. We become a victim because our brains want to make sense of certain events, even though there may be no meaning or real understanding. The challenge is it wrongly increases our impression of our understanding of the event, which can impact how we approach situations or make decisions.
4) Loss Aversion - is the tendency to actively avoid losses rather than focusing on the potential gains. Losing is seen as being twice as painful as winning. For example, we would psychologically prefer to avoid losing £20 than gaining £20. This can be common in leaders and change agents, where we don’t make bold decisions with potentially fruitful results. This is because we focus too much on the potential pain or disruption this will bring, which may be true short-term, but the longer-term gains could be exponential.
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