Saying Goodbye to Bias: Making Better Decisions

Are you prepared to acknowledge that your decision making is influenced by biases, or willing to accept if someone calls you out on that?

If you feel that you’re fully in control of your behaviour, you may not make it past the first and possibly highest hurdle: how to recognise and fix your behavioural biases and subconscious influences affecting your personal and financial decision making. Conformity bias, the fear of making mistakes, and the presence of optimism are the three biggest factors.

The topics I will deal with may be quite raw and confronting to some – it may be hard to admit that your behaviour is often out of your direct control, which often leads to people disbelieving and rejecting the concepts that I’m about to introduce.

A similar circumstance occurs in phone addiction; just like other addictions such as smoking or drinking, the biggest challenge is to admit that you are an addict. Truthfully, most of us can’t make it past that first step; despite massive evidence of phone addiction, most have trouble admitting it.

The same applies to acknowledging our psychological biases. Before reading the following, the biggest challenge is admitting that you have subconscious influence over your behaviour.

Don’t Just Be Part of the Crowd

People will almost always push for a common consensus within a group to create and maintain harmony.

Whether we like to admit it or not, as human beings, we’re not psychologically built to stand out from the crowd. We’re naturally and heavily biased towards what our peers are doing; this influence likely predates to the hunter-gatherer era when we needed to stick together just to survive. By conforming, our ancestors were able to work harmoniously to fulfil their basic needs. It’s ingrained in our instincts as a species, long before we even considered investing, personal or professional growth.

In modern times, conformity affects us both consciously and subconsciously. The pressure to conform starts young, for example, when wearing a common uniform in school. Eventually it grows to dominate your life, from the clothes you wear, to the way you speak and even the way you think and behave.

In the book Nudge, academics Richard Thaler and Cass Sunstein note how teenage girls are more likely to have children if they see their peers in similar situations, while students with good scores in university likewise have academically similar dorm mates.

While these subconscious biases can lead to both positive and negative impacts, I believe that conformity bias creates large negative influences when it comes to both personal and financial decision making. It inhibits individuality and creativity, key elements for personal growth and financial success.

Perhaps you had once set out towards a positive goal, like learning to control your anger, overcoming laziness, or becoming a more responsible person. You may also have wished to become more polite and considerate, develop new skills or change towards a more positive mindset. However, it’s very difficult to achieve the change you seek if you’re simply standing in a crowd and following everyone else. Worse still, you could also be mixing in the wrong crowd.

Conforming to the crowd largely leads to merely average outcomes, either on a personal or professional level. Fight this bias – if you seek to stand out, grow and be different, because conformity bias inhibits personal growth. Ongoing learning is the key to personal growth and better decisions, and your ability to do this is heavily compromised if you’re simply following others’ actions and standards.

Successful personal growth is tied to motivation, the desire to improve, and the willingness to strive to make changes. Step out of your comfort zone and do things that are uncomfortable but for your own good, while keeping an open mind and a desire to learn and grow.