Making smart decisions and decision recommendations is one of the most important responsibilities of a team…yet even experienced team members are susceptible to faulty thinking that leads to poor decision making.
As we discussed last week, one of three key ways we can explore better decision making is through the lens of human behavior and DiSC, especially when part of a team.
The second way to better decisions is by understanding cognitive psychology – and uncovering how we may sabotage our decisions without even knowing it.
Cognitive science confirms the way our brain functions can set us up for making poor judgments. These faulty judgments are the result of cognitive bias.
Bias – a distortion that affects judgment – can quickly cause good decision thinking to go bad.
While the complete list of cognitive biases is long, we’ve discovered five traps that are particular threats to smart decision making. In our work with leaders and teams, these are the decision traps we most frequently observe:
#1: CONFIRMATION BIAS: The tendency to focus on information that supports what one already believes, while ignoring facts that go against those beliefs, despite their relevance.
WHAT IT SOUNDS LIKE: "Cats are way better than dogs. I comment on all the dog posts telling everyone how great cats are. Let me forward you all the cat memes to prove it."
#2: STATUS QUO BIAS: Favoring alternatives that perpetuate the status quo.
WHAT IT SOUNDS LIKE: “My boss is a high S DiSC style and rejects new ideas. He wants to do things the same way we’ve always done them.”
#3: SOURCE CREDIBILITY BIAS: Rejecting an idea if we have a bias against the person, organization, or group to which the person belongs.
WHAT IT SOUNDS LIKE: "Accountants are just number crunchers, not business people. I am leery about implementing their ideas in my company."
#4: LOSS AVERSION BIAS: Tendency for people and groups to strongly prefer avoiding losses over acquiring gains.
WHAT IT SOUNDS LIKE: “Investing in this stock scares me, because I could lose everything. Even though the risk is pretty low, I just couldn’t sleep at night knowing it might happen.”
#5: FOCUSING BIAS: Tendency to place too much importance on one aspect of a decision and placing too little value on other salient factors.
WHAT IT SOUNDS LIKE: “A house in a neighborhood I've always wanted to be in is for sale! Who cares if the foundation is crumbling? We should put in an offer even though the cost of repairs is high and the resale value is low."
What makes all these traps so dangerous is their invisibility. Because they are hardwired into our thinking process, we fail to recognize them—even as we fall right into them. And the higher the stakes, the more likely we will fall victim to these destructive habits.
Scan the list again. What biases tend to trip you or your team up?
When we understand how our biases impact our decision making, we can bring awareness to these traps and sidestep these biases. Thus our decision making speed and outcomes instantly become better.
Ready to dial up your team's decision making effectiveness? Check out one of our decision making workshops or online courses!
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