Saturday, December 12, 2009

Throw away your Anchoring Bias

I recently attended a sports coaching course, and the instructor touched on many of the psychological elements of athletes. Sports is a great analogy for business - there are some people who excel at anything they do, while others are happy to just turn up and have an enjoyable time. I don't like to be involved in any business or sport where I can't see a path to winning - I don't want to just turn-up.

As athletes move towards their goals they can often be held back by an Anchoring Bias - a cognitive bias that leads us to rely too heavily on a single piece of information, that may have been useful in the past, but even  may even be irrelevant in the decision at hand.  We have an anchoring bias because we have a strong emotional tie to the data or experience and it makes us feel good compared to using new sets of data that are unfamiliar.

An example of an anchoring bias is a top level athlete who puts out an instructional  DVD that explains a certain technique, but when you watch them, clearly they are doing something completely different.  Sometimes when even faced with visual proof, they continue to perform the way that is comfortable.  Dr Michael J. Keyes, M.D. in a recent article states:

One of the sometimes puzzling aspects of elite level performers is when they make what appear to be drastic changes to a perfectly good technique.  Great golfers are famous for this.  You may see Tiger Woods take time off and completely change his swing for no apparent reason.  To us mere mortals, that seems like gilding the lily, but because of a need to be perfect and succeed all the time, elite-level performers will consciously let go of the anchoring biases  they have and look for better ideas to use.

This is one of the traits of successful performers - they are never afraid to let go of the past and try new techniques - to them they are just tools that can be used, modified, and discarded as necessary. For many of us, it can take a significant failure to discard our anchoring bias and to move forward out of our comfort zone.  I once worked for the CEO of a large public company who had been dismissed as CEO but later won the job back (a very humbling experience) - and has taken the company to over $1bn in revenue.  I don't mind admitting that I have failed a number of times in business, but each time have stepped back, dropped the anchoring bias, and learnt new skills to move forward.  How many entrepreneurs and successful business leaders have been through this cycle?  Instead of being ashamed, an entrepreneur embraces failure as an asset that tells them what to change.

The take-away here is to identify your anchoring bias before it heads to failure, or at least prevents you from achieving goals.  As much as possible try to be cold and analytical, identify what you need to change, and accepting that this likely isn't going to be comfortable - being comfortable means likely slipping back into old patterns of behavior.

And like athletes, using a coach to identify these biases and teach us new skills can be extremely effective.  A coach can step back and see things that we don't see ourselves, plus help us learn, implement and practice news skills.  I've been using the same personal business coach for over five years, and I regret not meeting her earlier. In a similar way I have a sporting coach that focuses on improving my skills on the field.

In each case we're on a journey to the highest performance levels and we'll continue to work on this together - like Tiger Woods I need to be able to throw away my anchoring bias and learn new skills to succeed.