It’s part of the human condition to have biases – it’s how we are built. Each brick formed based on where we grew up, how we were raised, what programs we watched, books we read and the people we have spent time with. But when it comes to business decision-making, it’s important to learn not only to recognise those biases but outsmart them. Here’s how.
The average adult makes up to 35,000 decisions a day. And, as a small business owner, you undoubtedly feel every single one of them. They may range from what your business looks like and who you employ to how much you should charge and your strategy for driving business growth.
But how do you sense-check these decisions to ensure they’re free from your own – mostly unconscious – bias?
Keep it clear
Executive leadership coach, Dr Karen Morley, says the first step is a simple one.
“You need to recognise when you’re actually making a decision,” she says. “Because we often do it unconsciously and that’s where bias comes into play.
“Instead, choose to focus on that process. Really slow it down. Make sure the criteria by which you’re assessing whether or not this is the right way to go is clearly articulated.
“If you do that, then you have a stronger chance of avoiding bias.”
In short, the quicker the process is, the more likely the decision you make will be biased.
Step off the bandwagon
Another good sense check includes involving others in the decision-making process, without falling prey to the bandwagon effect, of course.
What’s the bandwagon effect? It starts at school and continues through to adulthood – people are placed under enormous social pressure to agree with others. In the schoolyard you knew it as ‘peer pressure’, in the business world it’s known as ‘groupthink bias’, which suggests you must be right because everyone else agrees with you. Right? Wrong.
You know better than most that business decisions are far from black and white. Step off the bandwagon to properly explore the shades of grey by encouraging a culture of questioning.
“That can be tough for small business owners, who are often working alone or just with a small team,” says Morley.
“But other people will introduce ideas that you’ve not thought of yourself, and they’ll ask questions like ‘How did you get there?’ or ‘Why did you do this?’, which opens the decision up to scrutiny and ensures you get as many different perspectives as possible on the potential outcome.”
If you don’t have a team to draw on, Morley suggests tracking down a business support group or mentor, and asking your peers what they think could go wrong if you went down this path? What have you overlooked? How could you resolve it?
Encourage open, honest responses and remember, don’t take anything that’s said personally, it’s business.
Steer clear of superstition
Another crucial way to outsmart your own biases is to understand where they’re coming from. Is it an excessive reliance on intuition, defective reasoning, gut instinct or all the above?
As humans, we’re predisposed to find meaningful patterns when, in fact, there aren’t any at all. If a coin toss results in heads three times in a row, the chance of it being tails next is still 50/50. The same logic applies to assuming a business decision will produce a certain outcome based on previous results.
“It’s very easy to get stuck on doing the same thing,” says Morley.
“People think ‘this is the way we did it before so that’s what we’ll do again and it will work this time regardless of everything else we know’. It’s a big blind spot and one all small business owners need to be wary of.”
Instead, look at the fundamentals, drill down into the data and ask yourself if the conclusions you draw on are based on fact, rather than gut instinct or superstition.
Outsource to create mental space
It is incredibly easy to fall into the habit of predicting certain outcomes without proper back-up – you’re time poor after all, and have been steering this ship for a while now with solid results.
Still, no-one can predict the future. Believe you can, and you run the risk of overlooking key factors.
Instead, model future outcomes by producing the facts and figures around several potential scenarios. For instance, if you’re working on the outcomes of your company’s financial success this quarter, develop estimates for low, average and high earning potential.
Don’t have time to dive into the research and financials yourself? Bring in back-up. Morley suggests outsourcing wherever possible to free up your mind for clear, concise decision-making.
“Outsourcing can be crucial for small business owners,” says Morley.
“Sometimes it doesn’t necessarily have to cost much either, you could exchange services with a peer or even lean on a friend to help you challenge your own decision-making process.
“Whatever option you choose, drawing on the experience of others will help you reduce your own biases in the long-term.”
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