Outsmart Your Own Decision Biases
Welcome to human nature. We are all, to varying degrees, prejudiced.
We are influenced by different unconscious biases.
Theodore Roosevelt once said, “In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”
You make thousands of rational decisions every day — or so you think.
Prejudice impact our thinking every day, but few of us even know they exist, says Norma Montague, assistant professor of accounting at Wake Forest University in Winston-Salem, North Carolina.
“The word bias has a negative connotation, but it’s most often unintentional and a result of heuristics–mental shortcuts that allow people to make quick, efficient decisions,” she says.
“Good decisions are often the result, but not always.”
We see ourselves as possessing the truth. Yet we all fall prey to human egocentricity (an inability to understand or assume any perspective other than our own) — although not to the same degree.
None of us will ever be a perfect thinker, but we can all be better thinkers.
Deep and critical thinking is hard. Learning how to think is even harder. “Thinking is the hardest work there is, which is probably the reason why so few engage in it,” said Henry Ford.
Thinking means sifting through information, filtering the most important piece, and connecting it to a framework that you can use.
The ability to think and process multiple pieces of information quickly and effectively is a vital skill to have.
No matter what your circumstance or goals, no matter where you are or what problems you face, you are better off if you are in control of your thinking, and apply better-thinking models in both short-term and long-term decisions.
Don’t confuse IQ with thinking, fast or slow.
Those with high IQ are not necessarily “life smart.”
IQ tests are very good at measuring certain mental faculties, including logic, abstract reasoning, learning ability and working-memory capacity — how much information you can hold in mind.
But when it comes to abilities crucial to making good judgements in real-life situations, you need more than a test score.
Whether you’re answering hard questions, making impromptu remarks, analyzing a situation, or synthesizing data, critical thinking on your feet is crucial.
“A high IQ is like height in a basketball player,” says David Perkins, who studies thinking and reasoning skills at Harvard Graduate School of Education in Cambridge, Massachusetts. “It is very important, all other things being equal. But all other things aren’t equal. There’s a lot more to being a good basketball player than being tall, and there’s a lot more to being a good thinker than having a high IQ.”
In our fast-paced and fluid world, you’ve got to be able to pull out the right piece of knowledge at the right time.
The good news is that everyone can improve their rational thinking and decision-making skills.
Think about your thinking
Metacognition, as this is known, is a crucial skill.
Thinking about thinking is the ability to know what we know and what we don’t know.
It is the ability to plan a strategy for producing the information that is needed, to be conscious of your own steps and strategies during the act of problem-solving, and to reflect on and evaluate the productiveness of your own thinking.
How many times do you stop yourself and think about your thought processes and the heuristics you apply in making judgements in life or business?
In The Art of Thinking Clearly, author Rolf Dobelli writes, “Whether we like it or not, we are puppets of our emotions. We make complex decisions by consulting our feelings, not our thoughts. Against our best intentions, we substitute the question, “What do I think about this?” with “How do I feel about this?”
Unless you actively think about which mental shortcuts is best suited for the task at hand, you could end up making bad judgements when it matters most.
Many scientists argue that the best predictor of good judgment isn’t intelligence or experience; it’s the willingness to engage in introspection.
Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.
Do you think you make smart, rational decisions most of the time?
Chances are good that even if you pride yourself on being rational most of the time, you still occasionally fall for the sunk-cost fallacy.
The “sunk-cost fallacy” sees us continue to invest in an established project rather than cutting loose when something is over budget.
Put another way, don’t over-persevere.
Quit early when it matters.
In psychologist Daniel Kahneman’s book, Thinking Fast and Slow, he writes about how he and his colleague Amos Tversky through their work in the 1970s and ’80s uncovered the imbalance between losses and gains in your mind.
Kahneman explains that since all decisions involve uncertainty about the future, the human brain you use to make decisions has evolved an automatic and unconscious system for judging how to proceed when a potential for loss arises.
We often don’t quit early enough, says Kahneman.
Behavioral economist Dan Ariely adds a fascinating twist to lose aversion in his book, Predictably Irrational.
He writes that when factoring the costs of any exchange, you tend to focus more on what you may lose in the bargain than on what you stand to gain.
The “pain of paying,” as he puts it, arises whenever you must give up anything you own. The precise amount doesn’t matter at first.
You’ll feel the pain no matter what price you must pay, and it will influence your decisions and behaviours.
Stay in the present, and cut your losses.
Plan for the worst
Denis Waitley once said, “Expect the best, plan for the worst, and prepare to be surprised.”
As paradoxical as it sounds — The best way to shield yourself from nasty surprises is to anticipate them.
We tend to make plans which are unrealistically close to best-case scenarios.
We prefer to ignore statistics suggesting things may go wrong, and ignore the probability of what Donald Rumsfeld famously called “unknown unknowns”.
Pessimists might already be great at planning for worst case scenarios.
Persevere and by all means pursue your life goals, but you need to get some plan in place for when the unexpected happens.
Some events, no matter how much you plan, will still be a major blow.
The loss of a job, the diagnosis of a serious disease, or the loss of a home would be a major negative shock in anyone’s life, but proper planning ahead will make the difficult news easier to bear.
Take a moment (and give your brain some time to think) before making your next decision
Here’s the problem: in our rapidly changing, high-pressured, distracting world, our working memory gets taxed.
Your brain’s capacity is constantly overburdened and thus diminished in function over time.
It pays to let your mind wander.
Give it a break. This promotes the creative incubation process, giving you moments of foresight every now and then.
According to a study published in the Psychological Science, the brain’s capacity for original and creative thinking is enhanced by stray thoughts, obsessive ruminations and other forms of “mental load.”
The findings suggest that innovative thinking, not routine ideation, is our default cognitive mode when our minds are clear.
Honing an ability to unburden the load on your mind, be it through meditation or some other practice, can bring with it a wonderfully magnified experience of the world — and, as the study suggests, of your own mind.
“Idleness is not just a vacation, an indulgence or a vice; it is as indispensable to the brain as vitamin D is to the body, and deprived of it we suffer a mental affliction as disfiguring as rickets,” essayist Tim Kreider wrote in The New York Times.
Everyone could use more “white space” during the week.
Make a decision to make time. You won’t create time for thinking if you don’t actively make the time for it.
Commit to spending a few hours every week on thinking and reflection.
At some point in the week, stop, sit down and just think.
“The unexamined life is not worth living,” Socrates observed.
You can quickly make life more pleasant, more fulfilling if you slow down.
When you enter a space outside the flow of targets and deadlines, you can start to focus on what is happening in your life right now.
Fine-tune your routine to make rational thinking and metacognition a regular feature of your day.
Taking just a fraction of a second more to make a decision could help improve your decision-making accuracy, according to a recent PLoS ONE study.
“Postponing the onset of the decision process by as little as 50 to 100 milliseconds enables the brain to focus attention on the most relevant information and block out irrelevant distractors,” said Jack Grinband, PhD, associate research scientist in the Taub Institute and assistant professor of clinical radiology at Columbia University Medical Center.
Even the smartest people exhibit biases in their judgments and choices. But with practice, you can anticipate and outsmart them by nudging yourself in the right direction when it’s time to make a life-changing decision.
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