So, you started your own business. Making that choice indicates that you probably have many great entrepreneurial characteristics. You are confident, smart, willing to work hard, and don’t mind making decisions.
Growing from solo entrepreneur to a successful business owner, you will be faced with more and more decisions: hiring, location, finance, business planning, products to develop, marketing, and more. Even if you wear many hats, good decision making is possibly your most important task. Ultimately, though you may seek advice, it is the one task that you must do yourself.
How can you hone this critical entrepreneurial ability?
It may come as a surprise, but your confidence, smarts and willingness to work hard can get in the way. Having a sense that you are right about a lot of things can contribute to what psychologists call confirmation bias. Confirmation bias is the tendency to seek or perceive information in a way that reinforces what we already believe, even though we think we are seeking the truth. And, for the aspiring entrepreneur, that terrific willingness to work hard may make it worse, since we believe it is possible to push through problems rather than consider them seriously.
How does Confirmation Bias impact our decisions?
On a simple level, most of us realize that certain biased hiring practices are wrong and that it is a good idea to bounce ideas off a spouse, partner or trusted friend. But avoiding confirmation bias goes much deeper. It involves developing specific standards for how we seek information, how we interact with others and even how we think. That sounds like a big ask, so first, let’s explore why it is so important.
Hypothetically, Zach thinks he has an excellent idea for a product. All his friends think so too. Zach does a lot of homework. He knows what it will cost to make this product and where he can have it made. Zach knows some people at a great marketing agency, and they even have some preliminary designs. Zach does some random surveys at several local coffee houses that he frequents, asking people if they would buy this product. The results are overwhelmingly enthusiastic. He checked all the boxes and is ready to take out a line of credit on his house.
Good for Zach, right? Wait.
When was the last time you drank a Crystal Pepsi or checked your Instagram from your HP Touchpad? Not recently, probably never. Both colossal business failures came from companies with much more money and recognition than the average entrepreneur. If they can fail, anyone can. The flaw in our hypothetical friend Zach’s approach, and in the approach of many large businesses, is that merely because it's ours, we think it's an excellent idea. Even under the guise of researching, we are just seeking confirmation. Zach’s research would have served him better if he had also asked what people thought was wrong with the product. And, chances are, people at the places he frequents already think like him. Seems that maybe he wasn’t seeking data, after all, just confirmation.
Confirmation bias can, unfortunately, lead to fundamentally flawed decision making.
Let’s look at how confirmation bias affects our staffing. Yes, not being swayed by gender, ethnicity or religion is the fair, legal and ethical approach to hiring, but it also can strengthen the business. Hiring only those who are already likely to think like you, coupled with the fact that you are the boss, makes it unlikely that you will benefit from having your ideas questioned. It may be good to have employees who encourage you to put on the brakes when you're heading towards a cliff. Great entrepreneurial leadership isn’t about always being right, but instead, seeking the best answers.
How do we recognize confirmation bias?
You must recognize that we all have biases. We are wired that way for our protection. On a simple level, our biases mean that we don’t eat things that smell bad, try to shake hands with a bear, or give our credit card numbers to scammers. On a more complex level though, biases prevent us from seeing all nuances of a situation.
Our efficient, basic survival brain seeks confirmation. Our complex, business survival brain needs to develop the entrepreneurial skills to see all angles. The online entrepreneur navigating the global marketplace and the brick-and-mortar venture navigating the neighborhood both have much to consider.
How do we overcome confirmation bias?
Can we grow past this fundamental, built-in tendency? Here are five practices you can start now to improve yourself and your business.
1 – Sleep on It. It may seem strong and smart to shoot from the hip and make an immediate decision. But, it’s almost a sure-fire way to depend mostly on your own biases. The world won’t wait forever, but it usually will wait at least overnight.
2 – Play or Find a Devil’s Advocate. Instead of seeking evidence that you are right, look for all the reasons why you may be wrong. Even better, encourage your employees to do this. Find a coach or advisor. Be okay with disagreement and keep the channels of communication open.
3 – Use the Rule of Threes. Instead of trying to prove that one idea is great, why not try to find out which is the best of three ideas? Or the best of three perfect candidates, or the best of three ideal locations?
4 – Integration of Ideas. Once you listen to opposing ideas, maybe you realize that your first take was wrong. But none of the proposed alternatives seem right either. Sometimes the best solution is an integration of ideas.
5 – Realize It Isn’t About You. You want to succeed, don’t you? Love your business more than your ego. Ultimately, whether an idea you have is right or wrong is neither endorsement nor indictment of you as a person. But a successful business is a lasting legacy, a reflection of your leadership and wisdom.
Hope this helps. Let me know if you have any questions or comments.
Are you passionate about your career development?
Do you want to become a better person and leader? I know I do! I’ve recently created a Facebook Group, ShapeShift Lab, dedicated to career and leadership development. Everyone is welcome to join: http://bit.ly/2MtANfq