Biases are responsible for shaping our social reality based on past experiences, perceptions as well as emotions as opposed to data-backed objectivity. But our brains’ efforts just to simplify information-processing may turn out to be either a life-saver or a Pandora’s box.
As entrepreneurs, we are especially susceptible to cognitive biases. One reason for this is that we tend to be balancing multiple tasks as well as risky decision-making. Another explanation could be that entrepreneurialism attracts personality types which are more inclined to act on hunches. However, to heed Nobel Prize-winning physicist Richard Feynman, “The first principle is that you must not fool yourself, and you are the easiest person to fool.”
Confirmation bias, or the propensity to search for information that confirms our preconceived notions, can be especially pervasive. For example, if a CEO introduces a self-proclaimed “million-rand idea” and directs his team to conduct market research into its potential, the team is more likely than not to develop positive results endorsing the concept. I would sum it up in author Paula Stokes’s words: “People are always clinging to what they want to hear, discarding the evidence that doesn’t fit with their beliefs, giving greater weight to evidence that does.”
When Decision-Making Is Impacted
Decision-making is impacted when entrepreneurs have pre-existing ideas or views on a topic as well as to seek out information which confirms these beliefs. We embrace information which confirms our view and reject, ignore or avoid any conflicting information.
Confirmation bias is what prevents people from viewing conditions objectively. People with confirmation bias are self-righteous and also cherry-pick their data. In short, confirmation bias makes individuals prisoners of their own theories.
Confirmation bias is not intrinsically bad however it becomes problematic when entrepreneurs connect prejudice with stereotypes and then act on it. This impacts decision-making as well as hampering business success. Be on guard when it comes to confirmation bias and takes conscious steps to overcome it before you make crucial decisions.