How Your Unconscious Bias is Making Your a Bad Decision

We create mental models to put the external world in a framework we can understand. While useful in handling information, these models have real shortcomings, especially in business. Humans have an inherent tendency to favor a particular outcome. Like believing their product will sell because similar products have been a success in the past. Or believing a male engineer will be a better fit for the organization because all the engineers at your previous companies were men. Or listening to customer feedback in an unbalanced way giving more weight to praise and heavily discounting feedback that is negative.

It is critical to be aware of this tendency; otherwise it will lead to poor decision-making such as hiring or firing someone without cause or investing in an untested idea.

There are many types of mental models we rely on, usually unknowingly. This author can name 12, but today we’re going to focus on our tendency to select data to accept what supports our beliefs and then discount or totally ignore data that is counter to our belief system. This is called a confirmation bias.

Early Thinking

To protect yourself from confirmation bias in your start-up, try this exercise.

The ladder of inference is a helpful way to troubleshoot your thinking. Please accept the irony of using a mental model after condemning them. The ladder of inference helps spot your biases and examine your belief systems.

Following is a practical example of how it works with the potential for completely different outcomes.

Steps of the Ladder	Outcome 1	Outcome 2
1. Data Collection or Observation	Joe is late to my staff meeting.	Joe is late to my staff meeting.
2. Select Data	Joe knows I want my meetings to start on time.	Joe knows I want my meetings to start on time.
3. Add Meaning	Employees who are late to meetings are not serious about their jobs.	Joe would normally not be late without a good reason.
4. Make Assumptions	Employees who are not serious about their jobs should not be in my organization.	He must have been working on the important project I asked him to finish before the meeting.
5. Draw Conclusion	Joe is not a valuable member of the organization.	Joe is an awesome performer.
6. Beliefs	Not addressing poor performance makes me a weak leader.	Getting assignment completed move the organization forward.
7. Action	He needs to be fired.	He deserves a raise.