Practical Guide for Entrepreneurs on Cognitive Biases 🚀
What are cognitive biases? 🧠
In order to deal with the complexity of the world, human beings have developed rules and mental mechanisms (heuristics) that help us to process information and to understand the surroundings. Although we think we are all rational beings, sometimes our decisions are actually conditioned by cognitive patterns that we systematically and unconsciously activate to evaluate information, which are commonly known as 'cognitive biases'.
There is a multitude of heuristics and cognitive biases that influence the way people think and behave. These mental traps can help us to easily solve problems of everyday life, as well as making decision efficiently when we are faced with uncertainty. Be careful! In certain contexts, cognitive biases can complicate the way we evaluate information in an objective way and thus lead us to take bad decisions.
How do they affect us? 🤔
Cognitive biases are neither bad nor good. It depends on the situations that they activate in, and how we use them. Just like any other area of our lives, cognitive biases can affect our making of decisions at work: from developing a business idea, through all the research and innovation processes with our users until the design of products and services.
"Cognitive biases are just tools, useful in the right contexts, harmful in others. They’re the only tools we’ve got, and they’re even pretty good at what they’re meant to do. We might as well get familiar with them and even appreciate that we at least have some ability to process the universe with our mysterious brains." — Cognitive bias cheat sheet , BetterHumans
At Pixel, we believe that it is important to become aware of these cognitive biases so to identify how they can affect us, our team and our users. Here are some examples for you:
👉 People tend to overestimate the probability of things going well (optimism bias). This bias can be beneficial for entrepreneurs, since it gives motivation and resilience to follow up with a project, yet it also prevents evaluating ideas rationally. If we are not aware of this bias, we can even end up focusing our efforts and resources in a product that, in the end, is destined to fail.
👉 Similarly, when we analyse data to validate our idea, prototype or fixing of a product, we often tend to consider more any type of information that confirms our hypothesis (confirmation bias). If we do not apply different strategies to outsmart this bias, we can easily jump to wrongful conclusions.
👉 Cognitive biases can get to you as much as they can affect your users. A known example is that when there is a list of too many products or services offered, choosing becomes overwhelming for the user, often resulting in not knowing what to choose at all (choice overload). In fact, when we are developing a product it is fundamental to keep in mind the way that our users process information so to plan designs that ease the making of decisions.
Can we outsmart our cognitive biases?
There are various strategies and methodologies to minimise the cognitive biases that affect negatively our decision-making, and that can improve the positive aspects of it as well. Here are some:
💡 One of our most successful process in Miro is designed to help to contrast some of the cognitive biases that can affect the making of decisions of entrepreneurs, such as optimism bias. It consists in validating the business ideas with user-centric research actions.
📊 Using the Persona map we created can help you share the insights of your users with all stakeholders involved in the project. It has been proven that people remember and absorb information better when it has been presented with a coherent storytelling and when it references a real person rather than an abstract group of people.
🎯 Finally, it is important to consider how our users process information in order to design products or services that guide and facilitate their decision-making. This can be achieved, for example, by reducing the number of products offered and by testing the funnels of decisions with your users. This way, you can ease the decision-making of your users and avoid they end up choosing an option that does not fit their needs at all.
Heuristics and cognitive biases help us react quickly and make decisions in a fast way, especially in uncertain situations. However, they can easily lead to wrong beliefs or decisions. Becoming aware of our cognitive biases and applying strategies to minimise or benefit from them depending on the context is key for achieving a successful decision-making.
Make informed decisions!
Did you like what you read? Do you want to have more information or do you need to answer any questions? 🤓 Contact us.
We will be happy to meet you! 🎉