A significant part of being a good leader is to know yourself and people around you. Often times when we are making decisions, there are some psychological nuances that can happen that influence your final decision.
Here are some common biases and errors you should be aware of:
Overconfidence Bias – this occurs when you have a bit of knowledge about a problem, but you think you are an expert. The issue is that you become too optimistic in your own abilities and sometimes not look for precautionary solutions.
Anchoring Bias – a tendency to fixate on initial information (things you already know) and fail to take new and alternative information into account.
Confirmation Bias – we look for what we want to see. You seek out information that is in line with your ideas and discount contradicting ideas.
Availability Bias – basing your decision on information that is already there and not looking for more details. To illustrate – people think flying is more dangerous than driving because airplane crashes get much more media attention than car crashes.
Escalation of commitment – this is when you stick to a solution even though there is clear evidence against it. This is seen often times with managers that do not want to admit they made a bad decision. Typically, the initially proposed solution will still be attempted because of the amount of effort that was already put into it.
Randomness Error – when we believe we can predict the outcome of random events (example: superstition).
Hindsight Bias – sometimes, when looking back at a decision, we have a tendency to believe falsely that we could have predicted the outcome after the outcome is already known. This can be problematic because it might have been really difficult to foresee what would happen in the future.
Being aware is probably not enough. How can we reduce some of these biases and errors?
First of all, make sure you have clear goals. Once you start looking for solutions, look at your goals and this will help you eliminate options that contradict with your goals.
Second, try to gather as much information about the issue as possible and be welcoming of it. This will reduce confirmation, overconfidence, and hindsight bias.
Next – try not to create meaning out of random events. Some things are just not in our control.
Lastly – increase your options. The more options you have, the bigger the chance that your final decision will be the most optimal one.