Welcome back – you must be born lucky to have survived this long in uncharted decision-making territory, but todays trip might just change your fortune… Dilbert is taking you to see Emotional bias with the dubious honor of both representing several sub biases such as the wonderfully illustrated Status Quo bias above AND having the capacity to substantially increase the damage of all the other biases.
Possibly the most dangerous animal in the entire bias safari, you will encounter it daily. When you are happy or annoyed, you can be sure that all your decisions will be viewed through those glasses – therefore you should always request approval for that investment proposal, when the boss is in a good mood and will remember, when your proposals panned out in the past. It also works by somatic markers – when you come across a decision, your brain will look for similar past situations and recall your emotions around the different choices, so you will feel either good or bad about a certain choice. Basically, your emotions will make your decisions for you, but do not worry – if questioned you will quickly be able to rationalize it😊
Not only do you make most of your decisions in an emotional way, but Emotional biases also comes with an entire dysfunctional family each with their own nasty habits of attacking, when you least expect it:
- Status Quo bias: Your irrational preference for the current situation, which is great, because it means that it is easy to predict your competitors’ strategy – it looks almost always the same as last year according to a McKinsey Quarterly article.
- Self-Serving bias: Your tendency to attribute positive results to your efforts and negative to something external like special circumstances or someone else’s actions. Another great one that allows you to keep your job, while massively screwing up – just try to avoid doing it too often, as people may catch on…
- Hyperbolic Discounting: Your strong preference for receiving rewards now instead of later. It is completely fair to expect the value of receiving one million euro now to be higher than in ten years, as you can invest it now to have more in ten years. But here the difference between receiving it in ten or nine years matters little – while now or in one year is critical – although both scenarios reflect a one-year delay. This might come in handy in your next negotiation…
- Multiple Selves: Your internal conflict of dreaming a healthy and self-actualizing future, while today you just want greasy burgers and binge watch the entire Game of Thrones series. This is your system 2 planning what you should do, while your system 1 is busy with what you really want right now. So, if you address the future of your customers, you are activating system 2 and a rational response – and vice versa.
- Large Number Insensitivity: Your emotional response to for example saving lives is negatively correlated with the number of lives, so a news article with one specific life saved may seem incredibly important, but 100 will just become a number. Positively, it also allows business and political leaders to make the tough decisions, that are sometimes required – for example prioritizing government spending by comparing the potential saved quality life years on climate or corona (Well, theoretically at least😊).
So Emotional biases accelerate your problems, attack you from many directions and to top it off, you have no easy tricks to handle it – no wonder it is at the top of the food chain. Still there is hope. On the personal side, if you train identifying emotions, they tend to diminish, and when you get your sleep, eat healthily, and avoid over complicating your life with irrelevant decisions, you will have more energy to go through a rational decision process, when it really matters – this is why Barack Obama and Albert Einstein only kept two colors of suits. On the business side if you make sure to combine decision making power with the responsibility for carrying out the decision and building in fact-based decision making into all processes, this has a sobering effect. But never underestimate the ferocity of Emotional bias!
You have now met the first four animals of Availability, Confirmation, Overconfidence and Emotional bias. If you are not scared by now, you are probably beyond help. To reach a full 70% of strategy failure, you will next time meet Loss Aversion, where you put twice the value on losses than gains – and maybe after that a little secret something extra just to keep you safe. Again, do not attempt to contact these animals on your own – remember we are trained professionals. Contact me now at email@example.com or +45-23103206.