As fall sets on rapidly in the northern hemisphere, and some of us start to carve pumpkins for Halloween, pick apples, watch the leaves turn, and lay awake at night in fear of Michael Myers… we need to remember that there are some even scarier, less tangible things out there to be aware of.
Yes, we are talking about human biases.
A few years back, while thinking about how to better provide education around the insights of behavioral science, we wrote a blog called “Scary Biases“ on a whim and, well… it was a hit! It stacked up right behind “The Top 5 Reasons Businesses Need Behavioral Science” as as all time winner. So, for this fright filled season we decide to go a bit deeper and lay out a few more biases that we should fear and mitigate or act upon for success – this time through the lens of business and management.
Understanding and mitigating these biases within your company, your team, or your job can make an astounding difference in your culture, your team’s morale, and your overall success.
Thanks to 100Behaviors for providing the fantastic cartoons!
With that – here are 5 scary biases for business
1. The Concorde/Sunk Cost Fallacy Cost
The Sunk Cost Fallacy, also known as the Concorde Fallacy (named after the supersonic jet), is our tendency to become overly committed to a course of action even if it the data shows that it will lead to increased losses. (note: click the light grey arrow on the image below to reveal the full cartoon)
Despite obvious signs of a poor investment (time, money, or otherwise) we tend to double down and continue on our course of action because “we have already invested so much.” We defend the continued costs even if in the long run it could save us to abandon it and start over.
This oversight can be caused by a fear of loss, which ironically increases our loss. When business succumb to this fallacy and continually double down, they can see major losses.
Tips on Overcoming the Concorde/Sunk Cost Fallacy:
- Set decision rules before beginning a project and commit to a maximum investment of time, money, or other resources
- Make your commitments public for accountability.
- Conduct a third-party review to remove emotional barriers (continued commitment is often attached to emotions).
2. The Say-Do Gap
The “Say-Do Gap” is the idea that people often state an intent to do something, but don’t follow through on the action of doing it. There is a gap between our intended behavior and our actual behavior.
The Say-Do Gap also applies to motivation. We say that something will motivate us (and we often believe it), but, in reality, it doesn’t. We’ve all experienced this phenomenon at some point in our lives, either with ourselves or with others. Friends say they will start exercising, but never do. Your boss promises to speak up in a meeting yet sits silent. A peer promises to proof your paper, then suddenly doesn’t have the time. A major factor in the say do gap is our hot and cold effective states.
When employees succumb to the Say do Gap it can cause frustration in team dynamics and morale issues – when managers succumb to it, culture, teams, trust, and more can start to break down.
To start you your managers on the path to successfully navigating the human side of work, grab the Leading Human™ Playbook and Workbook package today. Use the code “BEHAVIOR MATTERS” for $20 off.
3. Imposter Syndrome
Impostor syndrome is a form of self-doubt – this can impact an organization from the top down or from the bottom up. We often doubt our skills, talents or accomplishments and are consistently worried about being exposed as “frauds”.
This is in spite of the fact that we may be full qualified or highly knowledgeable in the subject are hand. When we fall victim to imposter syndrome tend to assume others know more than they do and worry their success if based on luck. It was first studied in high achieving women and attributed to gender stereotypes; however, it has since been proven to impact both men and women equally.
Be sure to have a well thought out rewards program, peer precognition program, and behaviorally backed communications plan to help mitigate this in the workforce. Reach out to us at behavior@lanterngroup.com to audit your programs and come up with a plan to nix this issue from your company.
Or – grab this priming mug for yourself as a constant reminder that you are qualified. We would also be happy to customize a more “PC” version as a gift for your entire team – shoot us an email at behavior@lanterngroup.com to make it happen. While it may seem “silly” – the effects of Priming a desired mindset are quite remarkable and a mug is a great opportunity to open up the conversation with your team about this bias as well as a reminder that they are in fact qualified to be where they are and appreciated.
4. The Optimism Bias
You are probably thinking – “wait, isn’t optimism good!?” While it certainly can be a good thing, if we take it too far it can cause blind spots and be detrimental. The optimism bias is our tendency to overestimate the likelihood of positive events happening to us and underestimate the likelihood of negative ones. We believe that we are less likely to experience a negative event compared to the average person.
For instance, many entrepreneurs know that more than half of all new businesses fail, but they don’t believe they will be one of them or a smoker may believe they are less likely to get lung cancer compared to other smokers. Some of this is due to the Base Rate fallacy.
If a business consistently falls victim to the optimism bias and ignores base rates, it can easily snowball the company toward the Sunk Cost Fallacy and, ultimately doubling down the point of no return. Consider the tips below to help prevent this.
Tips on Overcoming the Optimism Bias:
- Always refer to the base rates – look at what typically happens and factor that information strongly into your decisions
- Track and review your past performance – using that as a guide to how you will perform in the future (we tend to think we will significantly change our behavior, particularly in the near term, but most likely we will perform like we did before without significant environmental or other changes)
- Get input from others before making a decision – particularly non-invested, neutral parties that will tell you the truth (even if it is hard to hear).
5. The Survivorship Bias
The Survivorship Bias is our tendency to only focus on those who succeeded and ignore those who failed when defining the factors that led to success. This can lead to false conclusions about what contributed to that success.
For example, it’s easy to assume that because a significant number of CEOs wake up early every day, that waking up early is one the key factors to becoming a CEO. However, this assumption neglects the fact that millions of people wake up early every day and do not make it to the CEO position.
Tips on Overcoming the Survivorship Bias:
- Awareness is key – once we understand that we may be “missing what’s missing” we can look for that information.
- In WWII, the allies almost reinforced planes where those that made it home from battle had been shot – until they realized that the planes survived those hits! The bullet hole locations on the planes that were shot down showed where they actually needed reinforcement.
- When looking at data or info, think “what is the opposite of what I am seeking out or commonly seeing?”, and check to see if it exists to make sure you have as much data as possible.
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We also excited to be publishing a book soon under the same pseudonym called “One Hundred Behaviors: The essential visual guide to understanding your decisions & the decisions of others (and maybe doing something about it)” – it will be jam packed with, you guessed it, 100 essential insights from human behavior, visualized for easy comprehension and with tips and tricks to overcome or leverage them.
Reach out if you would like to preorder your copy today!
Want to improve you company with a deeper dive?
For leaders, managers, business owners and anyone who works with a team we have created Leading Human™ to give you the tools and knowledge you need to act on many of these insights and drive success within your organization.
Order your copy here or forward the link to your manager for consideration today.
And, finally, here are a few more biases animated for your viewing pleasure! Subscriber to the Behavioral Grooves YouTube Channel for more.
Start a conversation! What do you think of these insights?