Category Archives: Decision making

Cognitive bias – understanding how we fool ourselves

A client of mine told me: ‘My customers are going to love the new service I’m launching.’

‘How can you be so sure’ I asked.

‘How could they not like it?’ was his confident reply.

Ok, his knowledge of his customers may well be extensive, but does he know what they really want? Has he asked them? His ‘How could they not like it?’ gave away the fact that his own enthusiasm for the service was playing a big part in convincing him that it would be a success.

It’s a common mistake when doing sales projections. We are so determined to succeed that we become prone to false optimism, unrealistic targets suddenly seem achievable. This skewed thinking is an example of what psychologists call cognitive bias.

Unfortunately, cognitive bias takes many forms. Even if my client had done some research, he might well have succumbed to confirmation bias – the tendency to search for and interpret information in a way that confirms what he already thinks. Added to this, he might not realise the power and influence of his own enthusiasm for the new service. Psychologists refer here to the empathy gap – our inability to fully understand the role of our emotions in decision making. Research also suggests that even if he had received some negative feedback from customers, he might well have succumbed to conservatism bias –  the tendency to revise plans insufficiently in the face of unfavourable evidence.

When he finally managed to tailor a service to suit his customers, he would still have to decide on a price, and here would face other hazards. The IKEA effect is the tendency to over-value things that we have made ourselves, regardless of their attributes. And once this is done, it’s easy to fall into the trap of the endowment effect, the tendency to demand a higher price for something than people are willing to pay.

If you’re feeling smug at this point, thinking ‘Huh, I don’t do that sort of thing’, be warned. In its many forms, cognitive bias can affect us all. There’s even a name for the skewed thinking that leads to our smugness, it’s called bias blind spot – the tendency to see ourselves as less biased than other people.

As a coach, part of my role is to listen out for cognitive bias. If I hear it, I ask questions like ‘How do you know?’, or ‘What makes you think that?’ I provide a more detached perspective, and my clients get an opportunity to talk through and reflect on their thoughts, feelings, plans and desires.

You will find a list of cognitive biases here.

You will find more information on coaching here.

Become a great leader and role model

If asked to name a leader we might think of a captain of industry or a major political figure, a Richard Branson or a Barack Obama. But you don’t have to be responsible for a multinational company or president of a nation to be a leader – leadership also occurs on a much smaller scale. For me, a key part of leadership is the ability to influence and motivate using attitudes and behaviour – leadership doesn’t rely on the use of power and the authority inherent in a high position, nor does it result just from the ability to reward.

Leaders lead by way of personality, attitude and behaviour. A good leader needs to have a clear vision of the future, be confident in their own abilities, have a ‘can do’ attitude, and be a good communicator and motivator – they also need courage and perseverance. So, I would argue that even a junior manager is a leader of sorts – they are a role model for their team, they lead by example, they need communication skills, and the ability to influence, motivate and encourage.

There are lots of models or theories of leadership. I’m a fan of the Transformational Leadership model because it describes a set of leadership characteristics and competences that apply to leadership at all levels. There are four core attributes of a Transformational Leader, they can be summarized thus:

Charisma. The qualities and behaviors that enable a leader to act as a positive role for their team – these leaders display conviction, adherence to a set of values, are ‘true to themselves’, and behave in a consistent manner.

Inspiration. The qualities that enable a leader to articulate future goals with clarity and optimism – these leaders inspire and motivate their team.

Intellectual stimulation. The qualities that enable a leader to be both willing and able to challenge assumptions, and strive for higher levels of achievement – these leaders encourage their team to do likewise and to create a culture of creativity and constant improvement.

Individual attention. The qualities that enable a leader to be aware of the needs of individual team members – these leaders mentor and coach, and give positive feedback.

The first two of these attributes are about leading from the front, the second two are to do with enabling improvement and higher levels of achievement – I think of them as leading from the front and tuning the engine.

The above is the briefest of summaries, if you want to know more about Transformational Leadership (and other leadership theories), Peter G. Northouse’s Leadership gives a good overview.

I offer a ‘How to be a great leader’ workshop that draws on the Transformational Leadership model. This works well for groups of middle and/or senior managers. If you are interested, you can find more information at here – or call or email me.

I’ve also added a leadership element to my ‘How to be a great manager’ workshop. It’s a workshop for new managers or those with no previous management training. If you are interested, you can find more information at here – or call or email me.

Knowing when something isn’t good enough . . and when it is.

In a previous blog I talked about asset-based thinking, here’s another example.

Most of us at some time have found ourselves in the position where something we are working on isn’t going right – we can’t seem to find the right answer, one little snag is holding up the whole project, we can’t get things to be as good as we want them to be. When this happens it’s quite common to feel frustrated with ourselves and to have negative thoughts such as ‘I’m not going to be able to do this’ or ‘I’m not good enough’.

Asset-based thinking encourages us to focus on what we have got and what we can do, rather than what we haven’t got and can’t do. So, when you’re struggling to get a piece of work to a state that you’re happy with you might remember that ‘at least you know it’s not good enough!’ This might seem an insignificant and obvious thought, but just think of the opposite – without this thought you might believe that what you’ve managed to do so far is ‘good enough’, and as a consequence you’ll turn in a second rate piece of work.

Would you rather be the person who struggles to produce something really good/efficient/fast/beautiful/meaningful, or would you prefer to be the one who goes home thinking that they’ve done a good job when actually they’ve produced something second rate?

A great thing to say to yourself is ‘it’s not good enough YET’.

When you know it’s not good enough there’s a much better chance or producing something that’s really amazing.

And, knowing when something IS good enough is important too. It’s important to know when something is good enough to be fit for purpose, or as good as it can or needs to be given the constraints of time, budget or specification. This is good time and project management, and it stops the stress and over-work of perfectionism (the fruitless or unnecessary striving for a state that cannot or need not be reached).

Happy working.

You have three brains, this is how to use them

Did you know that your gut contains a neural network that can learn, store memories, and perform complex processes. It sends and receives nerve signals and has every type of neurotransmitter found in your brain. In other words, your gut is a brain!

If that’s not enough of a surprise, neuroscientific research has found that the heart also has a sophisticated neural network and functions in a similar way. So, you have three brains.

Working with these findings and adding some behavioural modelling, researchers have now started to identify how our brains work together, and how each has its own specialisms. It seems that our three brains each have specific forms of intelligence and intuitive functions. Uncannily, the findings are starting to point to specialisms that confirm what we’ve experienced intuitively and expressed as our ‘heartfelt feelings’ and the ‘having the guts’ to do something – plus ‘thinking things through’ in our heads.

It seems that our heart brains play a major role in the processes that we experience as emotions and our connections to others. Our gut brains play a similar role in our sense of self and in self-protection. As we’ve known for a while, our head brains are great at the cerebral activities, like reasoning and language.

There also seems to be a significance in how we use our brains together, with research suggesting that there’s a neurologically preferred sequence that uses their individual strengths. In decision making, for example, the most effective sequence is (1) to start with the heart to see how a possible decision or choice or solution feels. If it feels positive, (2) employ the head brain to work out how to follow through and achieve our goal. Then (3) check things with the heart again to see if things still feel right. Finally (4) use your gut, go or it, draw on the courage that flows from your sense of self and self-preservation.

Another spin-off from this research is a re-thinking of the role and attributes of good leaders. Good leaders must use the strengths of their three brains. They must use their hearts to engage with colleagues and customers, lead through connection, rapport and bonds, not from a position of power and authority. They must use their heads to think creatively to see new possibilities, and rationally to devise strategies, plans and goals to deliver these. And, use their guts to provide the courage and determination to lead from the front and follow through.

 

For more information on the three brains see:

Neuroscience andthe Three Brains of Leadership, Grant Soosalu and Marvin Oka – http://bit.do/h7YF

Head, Heart & Guts – How the World’s Best Companies Develop Complete Leaders, David L. Dotlich, Peter C. Cairo, Stephen Rhinesmith – http://bit.do/h7YU

Using your multiple brains to do cool stuff, Grant Soosalu, Marvin Oka – http://bit.do/h7YX

 

If you want to know about what I do and how I might help you, your colleagues or your organization, contact me on 07932 657925 or terry@terrymorden.co.uk.