Decision making is a daily, often unconscious, function of life.
As a business owner, you know this only too well.
Some decisions require minimal consideration or analysis, others require detailed information, analysis and expert advice.
Whenever we make a decision, we need to be aware of the impact of any bias.
There are a number of biases that can influence your thinking and decision outcome. These include:
Confirmation bias – this is where people only seek information that supports their hypothesis regarding a particular issue.
Visceral bias – this is where you allow feelings about another person to negatively or positively impact on your judgement.
Biased blind spot – often highly intelligent people feel they are invulnerable to being biased about anything.
Tunnel vision bias – this is where a person is easily distracted by a single factor of an issue.
Feedback bias – occurs when you seek inadequate feedback from others prepared to challenge you.
Omission bias – this is a tendency toward inaction rather than action out of a fear of something not working.
Overconfidence bias – in this case a person inaccurately assesses their self-abilities as high which can lead to a reduced ability to self-correct.
These biased thinking examples occur more frequently than many realise, so you need to be constantly on the lookout for any biases that may impact your thinking, intuition and decisions.
If you reflect on recent events in your life, or key business decisions, can you identify any habitual biases in your behavior?
But, what if the bias is not yours?
Often business owners seek advice from others. This might be talking to their spouse or partner, mates or a mentor. For more serious matters or where expertise is required, business owners will seek advice from an accountant, financial adviser, business advisor, financial planner, lawyer or insolvency specialist. But, what if the expert is biased?
Let’s consider a situation where you are looking to invest for your retirement. You might talk to your accountant or tax advisor, a real estate agent, a financial planner and a stock broker. What advice do you expect from each of these? What’s their ‘area of expertise‘, their interest, the source of their income? Do you expect any bias?
Out of those potential sources of advice, who do you think will recommend that you buy a property? Who will recommend shares or using superannuation?
So, how do you obtain independent, unbiased advice?
Being aware of the potential for biased thinking is a core competency for all business owners, and once armed with this capability, the truth soon becomes obvious. Working with anyone, especially a business advisor, should be collaborative. Having someone you can trust to challenge your thinking yet remain independent and unbiased is key.
We offer a free, no obligation, 45-minute Discovery Meeting, for all new clients to meet with us so we get to know each other, and learn how we can work together. Would you like to explore how we can guide and support you, helping you to overcome the impact of any biased thinking?
You can book a Discovery Meeting here—> Contact Us