by TERRY CAPPS
Buda Chamber of Commerce
I was leafing through one of my aviation magazines recently and happened upon an article titled “Looking for Confirmation.” As the author read through various pilot mishap reports, he couldn’t help wonder how a person made a certain decision, based upon the available information at hand. The answer can be found in a common mindset we possess called confirmation bias. It seems this bias could describe a process or tendency for seeking out and trusting information that confirms what we already think… or maybe believe or want to believe, and to avoid or marginalize information that goes against what we believe or want to believe. I thought about how that applies to business owners.
Many of them share stories with me about business decisions they make. Without a doubt, some confess their second-guessing about which fork in the road they traveled on a certain day. For instance, one owner hires personnel at lower than average wages, trains them, puts them on the payroll, and soon they depart for better paying jobs. This owner was telling herself, “This is a great place to work, and although the wages are lower than average, employees will flock to work here and be satisfied with their jobs.” In reality, history told her this was not going to happen, but she marginalized the information and hoped history would not repeat.
In another case, a businessman told me about submitting a cleverly composed newspaper ad, but for only one issue in front of the public eye. He waited patiently at the telephone on the appointed day, and was disappointed with the results. He knew too well the vagaries of placing a single ad; he also knew that consistency is the key to a well developed advertising program. But his misguided rationale led to, “this time it’s going to be different, because my clever and well composed ad will have readers stopping in their tracks to call for my services.” This is an example of trusting information that has shown little credibility in past (advertising) situations.
Thus, confirmation bias can lead to making less than desirable business decisions. And since this bias is so strong a phenomenon, strong tools are needed to neutralize it. One of the best is to know it exists. Further, there are helping hands to lead you in the right direction… books and seminars come to mind, and also free business counseling at Texas State’s Small Business Development Center. Call your award-winning Buda Chamber for more information, 295-9999.
