This article is inspired from our Videocast collection in collaboration with Olivier Sibony, author, strategic decision-making expert and member of the CrossKnowledge Faculty!
When making decisions individually or as a team, it’s very difficult to overcome some natural biases that we tend to have. Prioritizing the short term over the long term, looking for ways to prove ourselves right or avoiding to challenge ourselves by considering multiple options are things that we all tend to do, whether in business or in our personal lives. These behaviors and ways of thinking can prevent us from being objective and therefore from making the best possible decisions. Here are some of the most common biases to look out for, and tips on how to avoid them!
The short term is more naturally more appealing than the long term
It’s not easy resisting the lure of the short term: an immediate benefit is difficult to refuse. Our rational mind is much more able to see clearly when considering options in the future than when it has to face immediate choices.
Surveys show that the majority of managers admit that they would rather not make a good investment if it means missing a short-term profit target. To them, the cost of missing the short-term target is too great relative to the deferred benefit of the long-term investment. Whenever facing a trade-off where the cost is immediate and the reward is deferred, whether it’s a personal situation or a business one, you should be extra careful about the weight of the short term in your decision. Ask yourself: “How will I feel about this decision a month from now and a year from now?” That may help you see more clearly through the long-term implications of your present decision.
Challenge your confirmation bias
The confirmation bias is the tendency we have to underweight the evidence that would contradict our hypothesis, and to give more credit to the evidence that actually supports it. In other words, we are less attentive to things that would prove us wrong than we are to things that would prove us right. That’s why, when people with different opinions look at the same data, they can reach opposite conclusions. Both of them are only seeing the part of the evidence that supports what they already had in mind.
Because the confirmation bias is such a naturally ingrained tendency, it’s difficult to overcome. The thinking discipline to strive for is to actively look for the evidence that would contradict us.
Suppose you are considering an investment that you are very excited about. Your natural tendency will be to look for confirming evidence to build the investment case. Therefore, it’s important to go beyond that impulse and to go look for the evidence that would prove you wrong. Consider that investment you really want to make and ask yourself: What would be the dealbreakers? What would it take for you to be convinced that you should not make this investment? Once you have figured that out, actively go seek that data and that information because if you don’t look for it, you will tend to ignore it. The best way to fight the confirmation bias is to think against yourself.
Imagine options that are off the table
A study, cited by Chip Heath and Dan Heath in their book Decisive, shows that in almost 70% of the decisions we look at, we only consider one option. The authors go on to suggest that, in fact, our decisions on average tend to be a lot better when we consider multiple options than when we consider one option only. A good way to make better decisions is to imagine that the option we’re considering has disappeared, and is off the table. By forcing ourselves to remove this preferred option from the equation, we have to ask ourself: “What would I do?” This will put us in the best position to generate more ideas and to look at alternatives. By simply considering these new options, we will start thinking more creatively about our decision. This may get individuals or teams to consider a different and better path from the one they would initially have chosen.