Running a business means making decisions. Making good decisions means good outcomes for your business, but unfortunately there are all sorts of things standing between you and those good decisions you need to make. Quite apart from simply not having the information you need to make the best choice, the human brain itself is a complex instrument and as prey to frustrating, inexplicable errors as your printer.
Today we’re taking a look at some of these mental traps, and ways you can avoid them to help you shore up your decision-making process.
Anchoring
When you’re researching a topic, you’re likely to anchor on a single piece of information – likely the first you read – and assign it undue significance. This means, for one thing, that you’re likely to think this is the most serious cognitive bias that could afflict your decision-making!
As a business owner, you’re going to have delve into unfamiliar fields all the time, and if you allow yourself to over-weight arbitrarily decided bits of information, you’re going to be making decisions that don’t align with how the world really works.
To avoid this, it makes sense to get some expert help with unfamiliar areas. For example, if you’re delving into market research, find a market research firm who can not just help you get the figures you want but also educate you about what they mean, and put the insights into action. Discover how market research companies can help you here.
The Curse of Knowledge
Less metaphysical than it sounds, the curse of knowledge means that the more specialist you are, the harder it is for you to see things from someone without that knowledge.
This sounds like a problem for lawyers, doctors and teachers, so how does it affect you in business? Well, for one thing, you’re an expert in your business but your customers and clients are. You need to be sure you’re communicating to your customers in terms they can understand, not just terms you can understand. This is something that needs to be understood by every level and team, from marketing to customer service – you might have a wonderful customer service team, falling over themselves to resolve your customers problems, but if they cloak their communications in jargon it’s just going to annoy customers needlessly.
False Economising
When you’re making budgetary decisions, it’s too easy to make a quick saving today while avoiding long term savings that are far more significant over time.
The false economy is a saving that costs you more in the long run than you’ve saved in the first place. There are easy ways to avoid this, but imagining you can do without them is itself a tempting false economy so you’ll need to commit early on to a policy of responsible, long term management. This will allow you to invest in risk and lost management specialists and protect your business from the short termism that blights that’s such a serious risk.
