The Smarter People Blog

Human Capital Analtyics thoughts, views and opinion, from SPP thought leadership and industry experts.

Step 7: Make Smarter Decisions by Checking our Egocentrism

Step 7: Make Smarter Decisions by Checking our Egocentrism

Decisions have to be sound and implemented effectively. Decision-making success is a function of decision quality and implementation. One cognitive bias trap we fall into is called egocentrism bias. This type of bias is when we assign more credit to ourselves for an outcome than an outside party would attribute. For example, “I deserve the bonus this month more than the others on my team because I worked harder.” We put too much emphasis on our own actions. Another form of egocentrism is attributing more blame to ourselves than an outside party would attribute.

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Step 6: Make Smarter Decisions without Hindsight Bias

Step 6: Make Smarter Decisions without Hindsight Bias

The hindsight bias, or the “we knew it all along” phenomenon, says that when more time passes, the more likely we are to think we could have predicted the eventual outcome. After an event occurs, we feel we knew what was going to happen. Much like when you ‘re not surprised when a glass falls off the table after you saw it sitting on the edge. Our hindsight bias can lead us to believe that an eventual outcome was more predictable than it actually was. We have a tendency to oversimplify the cause and effect. The problem with hindsight bias is that it makes us believe that we can predict future outcomes, which can lead to overconfidence in unknown outcomes.

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Who’s At the Table? Apparently Not L&D!

Who’s At the Table? Apparently Not L&D!

In PwC’s article – Who’s at the table? The C-suite and 20 years of change, there is no specific mention of a Chief Human Resources Officer (CHRO), Chief Talent Development Officer (CTDO), or Chief Learning Officer (CLO) “at the table” in the past, present and future. We all know that HR in some form is usually “at the table,” but, as usual, Learning & Development is not even in the equation. Maybe in the future when the CEO orchestrates an ecosystem of expert leaders, L&D will finally be recognized for the value we bring. The reason I find the list of “usual suspects” interesting is because the 2014 and 2016 CEO surveys revealed that skilled & competent talent are a CLO strategic need to drive innovation and to create the competitive edge. If competent talent is such a need why isn’t L&D at the table?

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Step 5: Make Smarter Decisions by Avoiding Illusory Correlations

Step 5: Make Smarter Decisions by Avoiding Illusory Correlations
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Do you know how stereotypes are formulated? It’s through an illusory correlation. People have a tendency to jump to conclusions about the relationship between two variables, even when no causal relationship exists. All jocks are dumb, women are not as smart as men, blonde-haired women are unintelligent...you know where this is going. Yes, these relationships may be true in some instances, but not for the majority. This mental error leads to poor decision-making.

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Step 4: Make Smarter Decisions using the Anchoring Effect

Step 4: Make Smarter Decisions using the Anchoring Effect

One cognitive bias that affects decision making is that of anchoring. We depend on anchoring every day to predict outcomes of events. When you need to estimate or predict an outcome, you have a starting point – that’s your anchor. If you’re familiar with the negotiation tactic of starting high, then you’re familiar with anchoring. I remember a college friend once said she was failing a class and was scared to tell her parents, so she concocted a story to tell them that she was pregnant and getting married. Then, after her parents would go into a tailspin, she would tell them she was joking, but she was failing Chemistry. I now realize that my friend’s anchor, or starting point, was high (pregnant and getting married) and winning the parental negotiation by bringing their tempers down on failing a class. This tactic is also used in retail every day – the MSRP makes the sale price seem more attractive. When you’re making a decision, be aware of the anchor you’re using, or in many cases you need to be aware of the anchor that’s being used against you.

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Step 3: Make Smarter Decisions by Overcoming Confirmation Bias

Step 3: Make Smarter Decisions by Overcoming Confirmation Bias

In the midst of all the current political rhetoric, do you tend to automatically believe what your preferred candidate or party posits? Do you ever try to objectively listen to the opposing party’s position? Do you watch all the news channels to gain multiple perspectives? It’s hard to do because it’s uncomfortable. Your party’s position tends to reinforce your existing self-image, which is within your comfort zone. The reason it’s uncomfortable is due to your own confirmation bias. We tend to rely on and actively search for information that will confirm our existing view of the world and support our existing hypotheses. At the same time, we instinctively avoid information that might disconfirm our preexisting beliefs or hypotheses. We have a stubborn attachment to existing beliefs.

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Step 2: Make Smarter Decisions by Recognizing Overconfidence Bias

Step 2: Make Smarter Decisions by Recognizing Overconfidence Bias

Have you ever been surprised when it took you much longer to complete a task than you expected or you overestimated your knowledge or ability in a situation? This happens to me all the time with any home maintenance task. I end up spending more time watching DIY YouTube videos trying to solve the problem than I actually do working on the task because I don’t have the knowledge to complete the task. Half the time, I come to the realization that I need to outsource the task if I want it done right.

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