It’s a trap! Avert decision-making biases with Business Chemistry

I recently wrote about how to recognize each of the Business Chemistry types, with their approach to decision-making being among the clues that can help.

• Guardians prefer a systematic approach to thoroughly assessing detailed information
• Pioneers go with their gut and have a high tolerance for risk
• Integrators seek input from others and are open to changing their minds
• Drivers value strong, logic-based analysis and calculated risk

Each of these is a reasonable way to approach decisions—there is no right way. And combining these approaches—making decisions in a diverse team—can be a great way to combat some of the cognitive biases, or decision-making traps, that sometimes lead us to make faulty decisions.

Cognitive biases are hard-wired ways of thinking that we're often unaware of, and that impact our decision-making and can cause us to make errors in judgment. And there's a seemingly endless list of them. I've written about some of them before, like the unconscious categorizing our brains automatically do, and the status quo trap, which is defined by a tendency toward making decisions that keep things the way they are rather than opening ourselves to action and change.

There's also the overconfidence trap, by which we're inclined to think our estimates, forecasts, and predictions are more accurate than they actually are—and then we base our decisions on them. This happens a lot in project planning, where teams tend to overestimate how smoothly things will go and underestimate how long things will take, how many things will go wrong, and how much it will all cost.

Then there's the prudence trap, which leads us to adjust our estimates, forecasts, and predictions to be “on the safe side," but then fail to share those adjustments with others, who take them at face value and base their decisions on them (or even add to the problem by making their own “safe-side" adjustments). So an individual might downgrade his sales estimate for next quarter to make sure he meets expectations. And then his manager might combine the whole department's estimates, and then downgrade them slightly to make sure she meets expectations. And then the production team uses those doubly downgraded estimates to determine how much product to make, and as a result, they don't make enough to meet actual sales for the quarter.

And let's not forget the confirming-evidence trap, which causes us to notice, seek, and pay attention to information that supports what we already believe, while missing, not seeking, or ignoring contradictory information. For example, a market research team may be reviewing focus group transcripts and highlighting all the quotes that show support for the product in question (which they happen to think is great), while missing entirely a whole slew of quotes that suggest the product will be a flop.

These are just a few of the decision-making traps that confound us. There are many more and there has been much written about them recently. For more, check out the spotlight on decision-making in the May 2015 issue of Harvard Business Review.

It's not easy to avoid these biases, particularly because they're often at work without us realizing it. But on a diverse team, varied approaches to decision-making can mean we're not all equally likely to fall into each of these traps. In fact, actively tapping into the particular perspectives of each Business Chemistry type could help a team minimize quite a few of them. For example,

• Pioneers seek novelty and change and may be able to pull us away from the status quo trap.
• Systematic and exhaustive in their search for information, Guardians can help create a more complete picture of a situation, helping to avoid the confirming-evidence trap.
• Integrators are likely to solicit estimates, forecasts, and predictions from a broader group, which may increase accuracy and mitigate the overconfidence trap.
• Being competitive and open to calculated risk, Drivers are likely to push for less conservative estimates, forecasts, and predictions, minimizing the prudence trap.

Again we're seeing the potential power of diverse teams, like we did in my last post The Power of Opposites. And yet, taking advantage of this diversity is actually a bit more complicated than simply having one of each type represented on a team. The post that follows tackles this issue.