“You Bought a Backhoe? Carl, we’re a drywall firm!”
Have you ever made a decision you regretted? Me too. But then again, we’re in the construction industry, where we’re making crucial decisions every minute of every day. The math was bound to catch up with us sooner or later.
But have you ever wondered why you make the decisions you do? Or why some turned out disastrous while others enjoyed success? Well, first off, don’t worry—there’s nothing wrong with you. In fact, you’ve only committed the act of being human. However, there is something you should know: You don’t have control over your own decision-making process. There’s something out there that affects, molds and colors every decision you make—something that all of your intelligence, experience and common sense can’t overcome. It’s called cognitive bias.
Cognitive Bias
Simply put, cognitive biases are mental shortcuts that our brains use to simplify decision-making. This bias can cause us to make decisions based on incomplete, inaccurate or just plain wrong information. Furthermore, under the label of cognitive bias are “sub-biases,” which live in our minds and influence pretty much every decision and choice we make in an average day. And most of the time we’re not even aware it’s happening. Given the importance of cognitive bias, it makes sense to examine it in depth. Here are 10 popular forms of cognitive bias and how they affect our decision-making capabilities.
- Confirmation Bias
Confirmation bias is the tendency to seek out information that only supports our existing beliefs (which is only furthered and exacerbated by online algorithms funneling only the things we want to hear based upon our past inputs, but that’s another article), while ignoring information that contradicts them. Confirmation bias leads us to make decisions that are not based on all available information because of our willingness to shut certain things out and only hear what we want to hear. This is one of the reasons it’s so hard to have an intelligent conversation about highly polarizing issues such as abortion, climate change or religion. - Choice Support Bias
This bias is when you side with something you tend to feel positive about anyway. The classic example is the “kind and gentle” dog who also happens to run loose around the neighborhood terrorizing children. It’s your dog (“he’s such a good boy!”), so there’s no way you’re going to find fault—even in the face of overwhelming evidence to the contrary. In the contracting world, this could be equated to standing behind a co-worker out of sheer loyalty (and because he got us out of that jam some years ago) even though clients, bosses and even other workers are coming out with a bevy of complaints. - Information Availability Bias
People have a marked tendency to overvalue the importance of information in front of them, rather than considering a broader, and out of sight, range of data. The best example of information availability bias is the tilted argument that smoking isn’t bad for your health because you know a person who lived to be 100 years old even though he smoked three packs a day all his life. Another way to view this is via the saying “a lot of knowledge is good; a little knowledge is dangerous.” Giving salient memory undue weight compared to less-memorable but more statistically probable outcomes will inevitably lead to inaccurate assessments and flawed decision-making. - Outcome Based Bias
I don’t know about you, but I’ve had a lot of previous bosses with this one. Outcome bias refers to the tendency to judge the quality of a decision based on its outcome rather than the decision-making process itself. It is a cognitive bias that can cloud our judgment and taint our assessments of past decisions. This bias can be particularly troublesome because outcomes can be influenced by factors such as external circumstances or just plain luck. By succumbing to outcome bias, we once again overlook the importance of analyzing the decision-making process itself , which is crucial for growth and improving our future decision-making prowess. To stave off outcome bias, we must remain vigilant to separate the evaluation of decisions from their outcomes. - Bandwagon Effect
You’re likely already familiar with this one. The bandwagon effect is a social phenomenon wherein an individual is so influenced by the beliefs or actions of a larger group that they adopt those beliefs in order to fit in or conform with the group. This can stimy true critical thinking and lead to the spread of ideas or trends that only reinforce existing attitudes or opinions. This is why so many business meetings are often unproductive; a large part of the group is simply parroting what they believe the others want to hear in fear of becoming the outcast. This phenomena is known in sociology circles as “groupthink” and is detrimental to making good decisions. It is therefore important to be aware of the bandwagon effect and to make decisions based on individual reasoning rather than rolling with the tide. - Clustering Illusion
The clustering illusion refers to the tendency of humans to perceive patterns or clusters in random events where there is actually no such pattern. This is due to the human brain’s natural inclination to find meaning and order in information, even if it does not exist (think clouds forming images). People can mistakenly perceive consensus in data when they see only a few similar data points grouped together—or give too much weight to certain variables while ignoring others. To avoid clustering illusion, it’s important to approach data analysis with an open-minded and objective mindset and to employ rigorous statistical methods to determine whether patterns are truly meaningful or simply the result of chance. - Recency Bias
In the middle of my career, I worked for a boss who had a severe case of recency bias—to the point where it became a topic we discussed around the office. Still, he was completely unaware he had this bias and became as predictable as a clock. Recency bias is the tendency to weigh the newest information far more heavily than older data. Each new software program was going to be the one used. New employees’ ideas were given far greater consideration than those of existing workers. It really was something to behold. In a virtual case study of counterintuitivity, older more experienced employees were growing more ignored as new workers were brought aboard. The business predictably closed a few years back. - Innovation Bias
This one shares similarities to recency bias except it has more to do with the tendency of a person to overvalue the benefits of some new buzz-tech technical innovation, such as new software or jobsite task automation, while undervaluing its limitations and pitfalls. As you might expect, this bias is often associated with pretty much everything that comes out of Silicon Valley. Imagine getting sold another Google to find out it’s just another Theranos six months down the road. Ouch. - Zero Risk Bias
We humans love certainty, even when it hurts our cause. Zero risk bias refers to the tendency of individuals to prefer options that eliminate or minimize any perceived risk, even if the overall benefits are relatively low. It is a cognitive bias that can influence decision-making in all areas but is particularly prevalent in decisions we make about finances, health care and personal choices. People often have an innate desire to avoid negative outcomes and prioritize safety and security above all other factors. Zero risk bias can lead to suboptimal decisions as it ignores the potential benefits or rewards associated with taking calculated risks. - Blind Spot Bias
I saved this one for last because it may be the mother of all biases. Blind spot bias is the tendency to recognize cognitive biases in others while failing to see them in ourselves. It is the inability to see or acknowledge our own shortcomings, prejudices and inconsistencies in our thinking and decision-making processes. It also appears to be a manifestation of our own limited self-awareness and our natural inclination to protect our ego and maintain a positive self-image. By failing to recognize our blind spots, we become susceptible to making biased judgments and reinforcing stereotypes.
Other Factors
There are many other reasons people make bad decisions. Emotions, psychological state and external influences can all contribute to poor decision-making. For example, we may make impulsive decisions when we are feeling stressed or anxious. Lack of knowledge is also another common reason people make bad decisions. Obviously, if we do not have all the facts or don’t understand the consequences of our decisions, we will likely make choices that lead to negative outcomes.
In the end, just the act of realizing and understanding that cognitive bias (and all these other factors) play such an important role in your decision-making process can allow you to approach your decision-making with more caution. You can learn to recognize whether it is truly you making the decision or whether that decision is being colored by one of your cognitive biases. Good luck!
S.S. Saucerman is a retired commercial construction estimator and project manager who worked for a large upper-Midwest general contractor. He is also an established freelance writer and author whose work spans 20 years.
