In our invoicing tip today, we talked about how a recency bias in the brain might have an effect on when clients pay your invoice. Recency isn’t the only bias that psychologists have identified - in fact, there are lots of little ways that your brain makes snap decisions. So, what other biases should we be on the lookout for in business?
When you’re making a big decision, how do you pull together the information for your pros and cons? Make sure you watch out for confirmation bias, which makes you overconfident in the validity of your personal views and likely to ignore evidence that your decisions will fail. To avoid it, however, try following the lead of investor Warren Buffett and aggressively seek out information that disagrees with your beliefs. Check out these useful tips for more help.
It’s easy to overestimate your ability to control events - even when there are factors you clearly have no influence over. It’s called the illusion of control and although some argue that it can occasionally be beneficial - for example, by encouraging people to take more responsibility or providing them with a confidence boost - it’s actually more likely to be bad for business. Be realistic and concentrate your energy on the things you do have power over.
Do you put more emphasis on negative experiences than positive ones when making business decisions? This “negativity bias” could mean that you perceive threats rather than opportunities, and this can potentially create a culture of loss aversion where you never take risks for your business. Here’s some tips about how to overcome your negativity bias.
Do you have any examples of how bias can affect your business - and how you can overcome it? Drop us a line on twitter or leave a comment to let us know. And have a great weekend!