Strategic thinking is paramount to profitable business decisions, and becoming aware of your biases can help you step up your game.
Shortcuts of the mind that save time and energy and are here with us to stay. Getting familiar with them is a good start.
Overestimating the likelihood of positive events and underestimating the likelihood of negative events.
Overestimating our abilities relative to others and our ability to affect future outcomes. Taking credit for positive past outcomes while dismissing chance.
Placing extra value on supportive evidence of our belief and too little on evidence that contradicts it. Failing to search impartially for evidence.
Rooting our decisions in an initial value and failing to adjust our thinking away from that value.
Striving for consensus at the expense of a realistic appraisal of alternative courses of action.
Focusing too narrowly on our own perspective and losing the ability to imagine how others will be affected. We assume that everyone has access to the same information we do.
Feeling losses more than gains and becoming more risk-averse than a rational calculation would recommend.
Continuing a behavior based on previous investment of resources regardless if current costs outweigh the benefits.
Investing additional resources in a losing proposition because of effort, money, and time already invested.
Thinking we can control outcomes more than is actually the case causing us to miscalculate risk.
Preferring the status quo in the absence of pressure to change it.
Valuing immediate rewards very highly and undervaluing long-term gains.
In a study of entrepreneurs and business leaders, biases helped entrepreneurs take unnecessary risks to move forward, but they hindered business leaders managing large organizations.
Take some time to understand them. The more mindful you are, the less they will hinder your decision-making.