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Remove Biases From Your Decision-Making Process

https://www.entrepreneur.com/article/351497

entrepreneur.com

Remove Biases From Your Decision-Making Process
Think more clearly and make better decisions with these strategies.

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Know and conquer your enemy

Know and conquer your enemy

Our brain relies on cognitive biases over clear evidence. Cognitive bias is the tendency to make poor judgments in a consistent pattern. Our unconscious biases are often so strong that they lead us to act in ways that are inconsistent with reason, our values, and beliefs.

Paying careful attention is the best way to beat these biases. It can only be done if you know the different types of cognitive biases that can influence your thinking.

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Common cognitive biases

  • The Dunning-Kruger Effect: You believe that you're smarter or more skilled than you are, which prevents you from admitting your limitations and weaknesses.
  • Confirmation Bias: When you welcome information that you agree with while disregarding evidence that doesn't suit you — even if it's accurate.
  • Self-Serving Bias: When you blame external forces when things are bad, but credit yourself when it's good.
  • Optimism Bias: You believe you are more successful than others and won't experience any misfortune.
  • Availability Heuristic: You believe that whatever comes to your mind quickly is the right decision.
  • Attentional Bias: You only focus on some points while ignoring other aspects.
  • False Consensus Effect: When you overestimate how much others will agree with you.
  • Misinformation Effect: Your memory has been interfered with, changing how you recall past events.

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Master self-care and self-awareness

Hungry, Angry, Lonely, Tired.

This acronym can be used by anyone to help you master self-care and self-awareness. It encourages you to pause and ask how you're feeling. Feeling hungry, angry, lonely, or tired makes you more vulnerable to self-destructive behaviors.

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The SPADE toolkit

Use the SPADE framework, developed by Gokul Rajaram, when you face difficulty in decision making:

  • S is for Setting: Define the “what,” calendar a timeframe, and clarify the “why.”
  • P is for People: Identify the people who should consult (give input), approve, and a single person responsible for the task.
  • A is for Alternative: As the decision-maker, it’s your responsibility to find feasible and diverse alternatives. Gather critical stakeholders and brainstorm possible alternatives.
  • D is for Decide: Here is when you can solicit feedback from others and have them vote on the best course of action. Keep this private by using tools like email. You could also use anonymous polls.
  • E is for Explain: The final step is to explain the decision via a committee meeting.

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Consider the opposite

Consider what would happen if you moved in the opposite direction to your choice.

Collect data to support this opposite view and compare it to the data used to support your original decision. Then reevaluate your decision based on the bigger data set.

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The valuable vs the worthless

Irrelevant information can influence our decision making.

A study asked participants to pick one of three plans.

  1. $59 a year for an online-only subscription
  2. $125 a year for print only
  3. $125 a year for print and online

16% chose the first option, and the remaining 84% the last option. But when the middle option was removed, 68% chose the cheapest option.

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Seek multiple perspectives

One easy and effective way to remove any bias from your decision-making is to ask advice or feedback from others.

People whom you trust will give honest and constructive criticism and point out any blind spots while offering a different point of view.

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Reflect on the past

Take some time out and consider similar past scenarios.

  • How did you make that decision?
  • What obstacles did you have?
  • How did you overcome them?
  • What was the outcome?
  • What did you learn?

Reflecting on the answers can help guide you in making a good decision.

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Why decision-making blunders are made

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6 of the largest decision-making blunders

  1. Sunk-cost fallacy. Present yourself with the new options at hand -- without considering the sunk cost.

  2. Narrow framing. When we're in situations that will repeat themselves over time, we should take a step back and play a game of averages.

  3. Emotionally driven decisions. Hold off on making important decisions when you are in a bad mood.

  4.  Confirmation bias. Always look for conflicting evidence and then make judgments based on more well-rounded information.

  5. Ego depletion. When we're drained, physically or mentally, we're less likely to think critically.

  6. The halo effect says that once we like somebody, we're more likely to look for his or her positive characteristics and avoid the negative ones. Realize your biases toward certain people and do what you can to eliminate them.

Decision-making errors

Most decision-making errors boil down to:

  • logical fallacies (over-generalizations, comparing apples and oranges, circular thinking)
  • limiting beliefs (underes...

Confirmation Bias

If you already have an opinion about something before you've even tried to figure it out, chances are you'll over-value information that confirms that opinion.

Think about what kinds of information you would expect to find to support alternative outcomes.

Attribution Bias

The “fundamental attribution error,” is when we excuse our own mistakes but blame other people for theirs.

Give other people the chance to explain themselves before judging their behavior.

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Information that matches our beliefs

We surround ourselves with it: We tend to like people who think like us; if we agree with someone's beliefs, we're more likely to be friends with them.

This makes sense, but it means ...

The "swimmer's body illusion"

It's a thinking mistake and it occurs when we confuse selection factors with results. 

Professional swimmers don't have perfect bodies because they train extensively. Rather, they are good swimmers because of their physiques.

The sunk cost fallacy

It plays on this tendency of ours to emphasize loss over gain.

The term sunk cost refers to any cost that has been paid already and cannot be recovered. The reason we can't ignore the cost, even though it's already been paid, is that we're wired to feel loss far more strongly than gain.