5 Blinding Bias Barriers to Effective Decision Making

To influence in a particular, typically unfair direction; prejudice.   –American Heritage Dictionary

Top 5 Bias Obstacles to Effective Decisions

Here are the five most common biases along with brief examples.  As you’re aware of them, you’re more likely to recognize and avoid their influence on your decisions.

1 –  Halo Effect

A single trait of a person influences your judgement.

• Hiring People who are just like us when a job requires someone different.
• Trusting and buying from a well dressed but unscrupulous sales person.

2 – Anchoring Bias

We tend to rely too heavily, or “anchor,” on a piece of information when making
decisions.

• We have an estimated number in our head that we use to rate and compare other options.
• You believe that professional services are billed by the hour.

3 – Availability Bias

Uncommon yet vivid, easily imagined, or high impact events are highly weighted.  These events are the exception rather than the rule.  But recent memory clouds the judgement and creates a bias for the exception.

• A bad meal or negative experience at a restaurant.
• Assuming Air Travel (Asian Air) is more dangerous than auto travel.
• More concern for Ebola than the flu

4 – Commitment Bias

Our tendency to increase commitment in a decision, based on a prior
investment, despite evidence suggesting that the cost of continuing
the decision outweighs the anticipated benefit.  i.e. : Throwing good money after bad.

• Cutting your price with the belief that you can make up margins with volume.
• Gamblers belief that they can win back their losses.
• Entrepreneurs who perpetuate a business when their market has disappeared.

5 – Confirmation Bias

Favoring Information that verifies or validates your beliefs.

• Political loyalists unable to accept the other party’s initiatives based on their source.
• Relying on racial or ethnic stereotypes
• Past positive performance reviews.

To Grow is Human

For us humans, making mistakes comes with the territory.  We are all subject to bias related mistakes.  But executives who make bad decisions without knowing why are destined to repeat them.  How have your biases backfired for you?