16 Cognitive Bias Traps Small Business Owners Fall Into

mickyates Business, Entrepreneur, ideas, Inspiration, Leader, leadership Leave a Comment

To be an effective leader in business, it is necessary to make quick and efficient decisions. Not only do managers and business owners make thousands of decisions a day that impact their business, but they must make them rapidly, as taking too long to deliberate can be seen as a sign they don’t know what they’re doing. Many leaders don’t often consider the mechanisms behind their intuitive decision-making. The truth is, more often than not, a cognitive bias is involved in making these quick decisions. They are not necessarily bad things. Cognitive biases are mental shortcuts that help you get around limitations in time, memory, or information. As no person is a machine, they are necessary for everyday business.

However, it is a good idea to become more aware of how and why you come to the decisions you do, to choose what’s best for your business. Because cognitive biases let you make decisions without a logical basis, they can lead to poor decisions or judgments that may even harm your business.

Consider if you struggle with training or mentoring newer employeess in your field or company. It can be difficult to explain more advanced concepts or methods to someone who is not an expert. This is the “Curse of Knowledge,” which can make seeing things in laymen’s terms difficult if you need to explain a concept to someone with less knowledge than you. To avoid this bias, continually ask for feedback on how well you’re explaining a concept to an employee or client.

There are many more biases that affect business leaders detailed in this infographic by Fundera.

Take a look at it below to learn more about cognitive bias traps you may fall into and how to avoid them: