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Are Your Business Decisions Failing Because They Are Biased?

3 minute read
Norman Marks avatar
The essential first step in combating biases is recognizing our own fallibility, our own biases.

Cognitive bias is something all of us need to understand.

It affects our own decisions as well as those our leaders make in running the business. It affects the setting of strategy as well as its execution. It affects our and others' assessment of what might happen (aka risk). It affects our trust and belief in ourselves and those we rely on for information.

How Does Cognitive Bias Affect Decision Making? 

We need to understand how cognitive bias affects our and others' decisions so we can fight it. It can lead us to making the wrong decisions and failing to optimize our personal and enterprise performance.

As I look back on my own career, I can think of many situations where I made what turned out to be a poor decision as a result of my own bias. For example:

  • I trusted people that I liked for their outgoing personality (charm) when I should have challenged their knowledge of the subject more thoroughly.
  • I hired individuals for their resume and certifications over others who probably had more imagination and curiosity.
  • I had too much respect for those in authority, trusting that they would follow through on commitments.

Related Article: Can Artificial Intelligence Weed Out Unconscious Bias?

Learning Opportunities

Have You Ever Been Led Astray?

As you look at the decisions you make yourself, the "risk assessments" you make or facilitate, the people who come to you with information, are you aware of how your biases may lead you astray?

What do we need to do to help those making business decisions become aware of their cognitive biases and combat them?

I think it starts with the essential first step of recognizing our own fallibility, our own biases.

I welcome your thoughts on this important topic.

About the author

Norman Marks

Norman Marks, CPA, CRMA is an evangelist for “better run business,” focusing on corporate governance, risk management, internal audit, enterprise performance, and the value of information. He is also a mentor to individuals and organizations around the world, the author of World-Class Risk Management and publishes regularly on his own blog.