The mainstream business community talks about emotional intelligence more than ever. At a time when daily headlines confront our nation’s history of prejudice and inequity, painful self-reflections are helping us grow better at seeing things for what they are.
In the technology industry, decision bias is pervasive in our everyday thinking, whether you are a Fortune 500 CEO launching a new product, or an IT project director fighting the odds against failure. People are vulnerable to blind spots that hide the truth and keep us from making sound judgments based on data.
Numerous studies, including one published by the Harvard Business Review, show that even highly accomplished professionals are subject to distractions, which say “the problem is that humans are unreliable decision-makers; their judgments are strongly influenced by irrelevant factors, such as their current mood, the time since their last meal, and the weather.”
Here are some dangerous forms of bias that lead to flawed decision-making:
Seeking and prioritizing information that confirms your existing beliefs, or using information to justify what you already believe.
When you draw different conclusions from the same information presented differently, such as when you use proforma spreadsheets to display financial or budget information skewed toward a certain outcome.
Excessively focused on the first information you are presented with when making a decision. Gossip works this way, the first thing you hear about a person can change your perception forever.
Sunk cost bias
The refusal to abandon something that is not working or underperforming simply because you have invested in it.
Monte Carlo bias
Named after the famed gambling destination, this bias means putting excessive weight on previous events, believing they somehow represent future outcomes. It’s the assumption that past performance dictates future results.
Overestimating the importance of information that is easiest to recall, or taking whatever is right in front of you as gospel truth.
Unskilled individuals sometimes overestimate their abilities and experts sometimes underestimate theirs. Understanding how people tend to assess their own skills can reveal common bias in performance.
When we jump on the bandwagon, it means we do something simply because people around us are doing it. We say, “this is what everyone else is doing, so I guess it’s the thing to do. They must be right.”
By no means is this an exhaustive list, but these are important clues to understanding dangerous bias that can undermine an executive’s ability to make objective decisions based on data and rational thinking.