Decision Making

Decision-making is a critical life skill. Yet, the vast amount of information flowing to us often causes us to take shortcuts in our information processing.

It is human nature to process information in a way that supports our own beliefs. This is not inherently wrong as it helps us think faster and more efficiently. The downside is, we often speak with confidence about things we don’t fully understand.

Let’s explore some of the cognitive biases to be mindful of in our decision-making.

1. Confirmation Bias – Tendency to favor information that reinforces what we believe. You hear from several people that walking is better than jogging. Therefore, you’ll be more inclined to read articles that confirm this statement rather than articles offering a different opinion.

2. Anchoring Bias – Tendency to be overly influenced by the first piece of information obtained, no matter how reliable it is, and using it as a baseline for comparison. While shopping for a vehicle, the salesperson quotes you a price of $50,000. You return the following week and negotiate a purchase price of $40,000. This seems like a great deal considering the original price quoted. However, if $30,000 is the initial quote, $40,000 wouldn’t look like the best price after all.

3. Bandwagon Effect (“groupthink”) – Tendency for people to adopt a behavior or attitude based on what others believe regardless of the underlying evidence. Voting for the most popular candidate in an election because you want to be part of the majority.

4. Halo Effect – Tendency to be influenced by previous judgments of performance and personality. Assuming a good-looking person is also a good person overall.

5. Availability Bias – Tendency of people relying on information that comes to mind quickly and easily. Fear of a shark attack because you hear a lot about it in the news while you’re more likely to succumb to heart disease than being attacked by a shark.

6. Ostrich Effect – Tendency for people to avoid information they perceive as potentially unpleasant. Instead of dealing with a situation, some people prefer to bury their heads in the sand, like ostriches. Avoiding relevant feedback that could help you get a better understanding of a situation.

7. Recency Effect – Tendency to remember the first and last items in a series while finding it challenging to remember the middle. You’re in a meeting, and the speaker is explaining an important concept. This person speaks relatively fast, and you are unable to capture everything shared. As a result, you notice you only took notes of the first few words and last few words.

8. Choice-Supportive Bias – Tendency to remember our choices as better than they were, as we tend to over-focus on the benefits we chose versus the options we did not choose. Attributing more positive features to a favorite brand in favor of brands we have not experienced.

9. Fundamental Attribution Error – Tendency to assume a person’s actions usually reflect who they are as an individual. Assuming the reason a driver cuts us off is that they are selfish or careless when this individual may be dealing with an emergency.

10. Outcome Bias – Tendency to judge the quality of a decision made primarily based on how things turned out rather than analyzing factors that led to the decision. Making all of your decisions this week based on flipping a coin. If most of the outcomes are positive, you may think this is a great way of making decisions.

11. Illusory Correlation Bias – Tendency to inaccurately link an action to an effect. Believing that wearing a specific jersey will give your favored team a higher chance of winning.

12. Dunning Kruger Effect – Tendency to overestimate our competence in a specific area. You commit to learning a new language and learn the basics fast. Yet, you realize more progress is needed to become fluent. On the other hand, your friend studied the same language, learned a few words, and overestimates their ability to speak the language.

Keeping these biases in mind can considerably improve our ability to think critically.

Source: Adapted from ehl.edu / Graphic: Visual Capitalist

Old Dog, New Tricks

A year ago, I welcomed a four-year-old (32 in human years) untrained Yorkshire Terrier into our family. It has not been the smoothest transition, but we have made great strides. There is an adage that you can’t teach an old dog new tricks, but that doesn’t hold up well if the old dog wants to learn.

Growth is possible for everyone, no matter their age. We cannot define people by their past, and their history is not always a predictor of their future. We must let go of unrealistic expectations, which isn’t easy to do. I have gone from my home smelling like potpourri throughout, to the smell of dog urine in unexpected places. Yet, I am appreciative of the continued progress our Yorkie makes with consistent training.

Leadership is about enabling the full potential in others regardless the age or history. In this era of longevity, making assumptions about the learning capabilities of a multi-generational workforce is a mistake. You can teach an old dog new tricks. Be realistic that it may take a little longer than a young dog. But, once that old dog learns, it’s there for the long-term.

Ongoing Learning

If you’re not learning, you’re standing still. But how do we get feedback on what we’re learning? And how do we go about learning new subjects and identifying gaps in our existing knowledge?

Often, we don’t realize we lack an understanding of something until it’s too late. We tend to focus on knowing the name of something versus actually knowing something.

The Feynman Technique is a 4-step process for learning that you can use to understand just about anything.

Step 1: Helps you embrace what you don’t know, it requires you to be specific, and you have to start small (a page or two).

Step 2: Makes it harder for you to trick yourself and others, as well as helps you build confidence.

Step 3: Learning becomes an iterative process, you’re actively engaged, and you expand your knowledge base.

Step 4: Simplicity provides greater understanding, and using analogies makes it easier to recall and explain.

Reference: Ambition and Balance

Knowledge

Knowledge builds self-confidence and is the key to cracking life’s code. The more you learn, the more options you have in life.

Even if you never expand your formal education, there are opportunities to learn all around you.

There isn’t a day that goes by that you should not have learned at least one new thing, regardless of how insignificant it may seem.

When you reject learning, years of schooling will teach you little.

If you want to be enlightened, there is no end to what you can learn.

For knowledge to have real significance in your life, you must do something with what you’ve learned – teach others.

Holding on to knowledge for dear life defeats the purpose of why you learned something in the first place. Whether it’s teaching a child right from wrong or showing someone how to perform a specific task, you have a great gift that doesn’t cost you anything to share.