Updated: Dec 2, 2020
Today, I offer additional examples of how cognitive biases and heuristics appear in the business world, and how we can train ourselves to avoid the "autopilot" scenario in which those cognitive biases and heuristics thrive.
In Part 1, Matt gave us the definition, and 5 examples, of cognitive biases and heuristics. Part 1 is available here.
What's the most obvious example of how cognitive biases and heuristics appear in the business world?
Nudge, the book by Richard Thaler and Cass Sunstein is all about designing systems and architectures that will lead to better decision making.
Go back to our Demographics and Psychographics concepts in the Tips to Propel Small Businesses to Success & Resilience series.
"How can I convince my customer to buy my goods or services?" This is basic marketing, but now that you know more about cognitive biases and heuristics, you can learn to spot those traps and triggers. You can also consider how to put cognitive biases and heuristics to work FOR your business by taking a fresh look at your marketing strategy.
The leadership element of training ourselves to avoid the traps that our cognitive biases and heuristics set for us is a bit tricker. To bring about the best for our business, and to reach our goals, we must take our brains off of the cognitive bias and heuristic autopilot.
This requires us to identify and recognize how and when our own cognitive biases are triggered, and when we use heuristics to avoid thinking through complex or difficult situations. Incorporating a mindfulness exercise into your daily routine can be a good way to identify these triggers and patterns.
Then, we must "unlearn" these habit loops and patterns. This takes practice and effort. But, as the Forbes article below says, we can train ourselves to be better decision makers.
For me, coaching has been a great source of clarity and accountability in my own ongoing professional development.
Working with a coach gives me the opportunity to pause and think through situations with a partner. My coach forces me to at least acknowledge, if not consider, additional options, perspectives, or points of view around a particular matter.
With practice, I've improved my ability to adopt that same curious posture in more and more situations. This has led to better evaluation, better thinking. That, in turn, has led to better decision making.
Additional Reading and Referenced Articles:
About the Author:
Matt Beckmann is the Founder & Managing Director of Ascent Consultants. In addition to experience as a former Chief of Staff to the Missouri Auditor and as a Corporate Vice President and General Counsel, he has advanced training and certifications in law, business, coaching, athletics, and other disciplines. His blog content, inspired by his deep passion for unlocking his reader's best potential, consistently equips business owners and individuals with the knowledge and resources to overcome obstacles that may be hindering growth.
Ascent Consultants provides business and project management consulting services, and executive and leadership development coaching. By converting client growth goals into an actionable "game plan," we lead companies and individuals to extraordinary outcomes.