Knowledge

How to make better decisions

02 Dec 2020 | Research & Business Knowledge

ICG member Toby Collins provides an action plan to minimise biases in our everyday lives in order to make better decisions. Toby writes …

A couple of weeks ago I posted a graphic (from the Visual Capitalist) showing 50 of the most common cognitive biases. Some biases were known concepts such as the bandwagon, stereotyping or placebo effects, while others were less well known but were instantly recognised by readers of the post.

This resulted in requests to understand how to minimise these biases in everyday lives and make better decisions.

To provide strategies to combat these biases, we first need to understand them. Put simply, cognitive biases can occur when learnt associations and shortcuts (system 1 thinking or heuristics) are applied to a situation allowing a choice or judgement to be made quickly and easily. This happens when an individual focuses on the most relevant aspects of a problem to develop a solution. Unfortunately, these shortcuts are a common source of bias.

Deliberative reasoning (system 2) would likely yield a better outcome. It should be noted that bias can also occur in flawed system 2 thinking due to factors such as cognitive ability, information considered or laziness.

So the simple answer to the question of how to reduce the impact of biases on your decision making is to stop and think about a decision more carefully and broadly.

Below are a few suggested behaviours and techniques to do this more successfully: ensure that you are in a position to concentrate and allow your brain to evaluate; allow time to think; and avoid making important decisions when you are stressed, fatigued, multitasking or are being distracted.

1) Become more aware of the biases. The Cognitive Bias Codex identifies around 180 in total, and they are grouped into 4 groups:

• Memory: Biases that affect our recall of people events and information
• Too much information: Biases that affect perceptions of people and event
• Too little information: Biases for filling in the gaps
• Need to act fast: Biases that affect how we make decisions

Also, certain biases are prevalent in certain types of decision making (e.g. in investments), so if you can be particularly aware of them while making a choice in those areas.

2) Become more self-aware and understand which ones you are most susceptible to. Review your current behaviour and previous decisions. What were the outcomes and what reasoning did you use? How could you have achieved a better outcome?

3) Take an outside view, having somebody with a different viewpoint to challenge your objectives, your thinking and assumptions can be useful, and they may spot your biases.

4) Challenge your thinking as a part of your consideration. What are the weaknesses in your thinking? Are your assumptions correct? Consider your objectives individually to generate more options to consider. When planning for the future, allow yourself to consider multiple scenarios, not just the most likely one.

In summary, these biases are part of being human and we are all affected by them to varying degrees. To reduce their influence, and hopefully make better decisions, try to become more aware of the biases and which ones influence you most, get alternative perspectives and give yourself time and the mental tools to stop and think.

Hopefully, this article has provided a concise overview and provided some simple practical tips to make better decisions, but as with everything nowadays, there are apps to help us.

References

https://www.visualcapitalist.com/50-cognitive-biases-in-the-modern-world/

https://upload.wikimedia.org/wikipedia/commons/c/ce/Cognitive_Bias_Codex_With_Definitions%2C_an_Extension_of_the_work_of_John_Manoogian_by_Brian_Morrissette.jpg

https://play.google.com/store/apps/details?id=ru.free_coding.biascs

https://positivepsychology.com/cognitive-biases/

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