As humans, our thinking process is pretty much strongly influenced by what is personally most relevant, recent or dramatic. You may be making an unbiased decision with your conscience and guess what! Yet your decision might be biased even without you realizing it…
Yes. What you have read above is literally correct. This phenomenon may be developed as a human survival instinct over several millennia, however, this is not good when it comes to critical decision making where multiple stakeholders are at risk (especially when it comes to business)
When you are trying to make a decision, a number of related scenarios or situations might immediately spring to the forefront of your thoughts. Due to this, you might judge that those scenarios are more frequent than others. You give greater credence to this information and tend to overestimate the probability and likelihood of similar things happening in the future.
Ok, let’s look at a simple example, let’s says you had a bad experience in an airplane and your quite skeptical in traveling on a plane. Your friends decide to go to Bali on a vacation and are taking up a vote and you decided to vote against it just because of your bad experience. That’s Availability Bias, you just made the decision simply by putting too much weight on one bad experience.
This is also quite evident in lottery ticket instance, though people tend to have a very low chance of winning a jackpot they keep purchasing a ticket hoping so. Why? It’s because lottery organizers heavily promote the jackpot winners, not the ones who don’t win. So people assume they are much more likely to win the lottery than they really are.
When Robert Nardelli became the CEO of GE, he went to the retail giant Home Depot, where he saw a lazy inefficient retail business. He believed that if he could get GE’s home depot, he could drive up their performance. Nardelli took his people and gathered information from a very small subset of people and a very small subset of data mattered to him. He processed using the GE’s methods then made decisions based on information from trusted small circles instead of integrating new information about his environment in a relatively new industry to him. He went back to an old set of tapes unbeknownst to him out of his awareness he was leveraging biases to make a series of really poor business decisions. His tenure lasted seven years their stock value in total went down 8%, this may not sound like a lot but they’re in a Coke Pepsi business model as most of you could come across a Home Depot Expo in your neighborhood at some time in the late 90s.
As humans, we are gonna be making decisions until we are alive, whereas we’ll also have many new opportunities to develop our ability to recognize and manage emotions and biases in our decision-making. And many more opportunities to make decisions that push us towards authentic growth.
The human brain is prone to these biases and carefully understanding this bias will lead to better analysis of the situation. If you are aware of the Availability Bias and begin to look for it, you will be surprised how often it shows up in all kinds of situations. We can’t avoid this natural tendency completely, but by being aware of it we can let our rational minds allow us to make better decisions in our personal and business lives.
Moreover, due to the advance in the tech, there are many simple tools like Zepto, Power BI, Tableau could help you understand your data and help you make an unbiased business decision that could save your business a fortune.