In business many fear making the wrong decisions, hesitate on pulling-the-trigger, and rely too much on the past to predict the future - these all get in the way of our best interests.These biases cloud our decision-making but there are several things one can do to prevent or diminish there negative impact.
- Make decisions at your most rational. Self-restraint doesn't come easy as we all have a tendency to gratify immediate desires. The key is not to make important decisions too close to when they'll take effect. Shifting decision-making to a moment when your most rational self is running the show can be very effective in curbing impulsive decisions.
- Commit yourself. Focus on the goal. What is it you are REALLY trying to accomplish. Take out the biases and realize that all things are grey and not black or white.
- Reframe your gains and losses. People are far more motivated to avoid a loss than they are to rack up an equally large gain - called loss aversion, it's a real issue with business people at all levels. Although you must measure loss/gain you can not be so fearful of loss that it impacts your judgment to pull-the-trigger on a decision that should be made in a timely fashion.
- Doubt yourself. We all have trouble assessing probabilities which can skew the way we gauge our performance. Until otherwise proven, don't believe it's anything but chance when things go well. It's easy to be blinded by your successes, which is why it's so important to have an objective way to assess your outcomes.
So, going forward, figure out what biases you have, use self-restraint, and assess your successes rationally. Now Move Forward!
Jim Lavorato
Principal, Fund-House Ventures
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