Forbes.com recently published an article about our mental biases and how they effect your investment choices. As I read this I couldn’t help but think about how these biases also impact our work.
- Recency is short term memory winning out over the long term. Is it really time to find a new job, or are you just having a bad stretch?
- The Sunk-Cost Fallacy is kind of the opposite of Recency; it is the notion that you have already invested the time so you may as well stick around so that invested time isn’t a waste. It is the notion that you can’t “cut your losses”–but usually you can!
- Overconfidence is seeing only the positive. At work this could be fear of failure or perhaps the “halo effect” that can happen during personnel evaluations.
- Confirmation Bias is the basic human trait of thinking you are always right. People naturally go to great lengths to seek out information to uphold our preconceived notions. this could include opinions on people you hired or projects you ran. Are they really perfect? There is always room for improvement.
- Status Quo Bias is sticking with what you know. Over time this can weaken an organization as they hire more of the same type of person, leading to a lack of diverse thinking in an organization.
- Bandwagon Effect is going along with the crowd. Does your organization offer services and products the same as everyone else’s or do you truly innovate?
- Negativity Bias is giving more credence to bad news than good news. At work this could translate to focusing on what your organization is doing wrong or failing to learn from failure.
So, if you can see some of yourself or your organization in the list above, what do you do about it? the Forbes article lists some strategies that are worth taking a look at. The coach in me says that simply being aware of these biases in your self or your organization can be a tremendous catalyst toward managing them.