Our minds have a tendency to play tricks on us when business goes bad, so much so that it may make us feel like the universe is conspiring against us. Without much-needed intervention, the persisting notion that everybody’s out to get you may lead you to make one bad decision after another. It’s a vicious cycle that needs to stop.
Our irrational thoughts are a byproduct of our anxieties. Ironically enough, these cognitive biases are fueled by our instinct for self-preservation. Dwelling on the negative or the irrational, however, can have negative consequences. If you’re not able to police and redress your thoughts and emotions accordingly, there’s a good chance that your business will suffer all the more.
Cognitive biases come in different forms and vary according to severity. The good news is that they can be corrected. But before you can come to that point, you have to identify the problematic behavior first.
Here are the most common cognitive biases that occur when anxieties come to roost.
1. Availability bias
Availability bias, otherwise known as availability heuristics, is a tendency to base one’s decision on readily available information just because it’s convenient. More often than not, the decision is influenced by personal experience but is far removed from the reality and context of the situation. Availability bias, like all biases, exists in the subconscious, so it’s highly unlikely that the person manifesting the behavior is aware of it.
As an example: An entrepreneur might refuse to make a business deal with a firm that recently suffered a huge loss in investments even if an in-depth look at the company’s numbers proves that there’s still massive potential for growth.
The best course of action in ridding yourself of availability bias is to ensure that you’re looking at the stressful situation from all angles before making a decision or taking an action. And don’t blindly accept every information as a matter of convenience. By doing extensive research first, you are unlikely to make decisions that will have negative repercussions on your business.
“Self-handicapping” is a cognitive behavior in which a person undermines his own abilities in an effort to avoid responsibility for an impending failure. It’s a way for a person to protect his sense of competence. By externalizing the blame, he can preserve the notion that he can’t lose.
An honor student who feels he is bad at math, for example, may refuse to study for a major math exam. If he fails the test, he comes to the conclusion that he only failed because he did not have time to study.
Overcoming self-handicapping requires self-vigilance. According to recent research, there are two beliefs that can help one overcome the cognitive bias, the first one being the realization that you can be better at something if you put in the effort, and second, that your self-worth is not dependent on your abilities.
3. The “second-place effect”
The “second-place effect” phenomenon is based on a study made by Northwestern University professor Victoria Husted Medvec and her partners to explain why silver medalists have a tendency to be less satisfied than bronze medalists.
According to the study, second-placers are likely to feel more remorseful because they tend to dwell more on “what could’ve been.” Another way of putting it is that they can’t help feeling like they’re the first loser. Third-placers, on the other hand, have no legitimate reasons to think such thoughts or feel such emotions.
The “second-place effect” is all too common among entrepreneurs, which isn’t in the least surprising on account of the business world’s competitive climate. When a big firm, for example, decides to sign a deal with a direct competitor (just when you feel you’re about to land the big contract), it has a way of taking out the wind from one’s sails.
The best approach to dealing with the negative emotions that come with being the second-best is to see the glass half-full. By focusing on what you do well and spending more time perfecting your craft, you are likely to come to the realization that being the second-placer isn’t synonymous with losing.
Most of us have some form of cognitive bias. They aren’t necessarily bad. But if left unchecked, they may potentially harm your business. A healthy sense of self-awareness can help in safeguarding oneself from such mental states. Ultimately, it also helps to keep yourself surrounded by friends and family who care for you and are willing to call you out on your BS.
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