How to beat your bias and create a better business

We all have biases, but that can be a bit of a bugger when you’re running a business. Banish bias and you’ll learn to make better decisions.

Life is busy. Work is complex. Making decisions is hard. So, your brain takes shortcuts – to reduce the amount of time you need to spend deciding who to hire, whether to expand your business or how to solve a tricky problem on site.

But sometimes, your brain gets it wrong. And how you go about your day is driven by a bunch of flawed assumptions about how your world works. These errors are called biases.

Nobody’s perfect and we all have biases. But here’s the thing: it’s possible to reduce your bias, and in the process become a better contractor and boss.

Where does bias come from?

Let’s start at the beginning. Heuristics – or rules of thumb – are mental shortcuts that help you solve problems and make judgements quickly and efficiently. If you had to constantly evaluate the fastest way to drive to a site, which café serves the best coffee or the easiest way to crawl into a roof space, you’d never get your job done.

The power of heuristics means that these errors or misjudgements are repeated over and over again. Crucially, they can contribute to stereotypes and prejudice.

“A heuristic reduces the amount of mental effort we need to put into making a decision. It’s a product of trying to be adaptive in the way that we make decisions efficiently. But sometimes these shortcuts can lead to errors or biases,” explains Ben Newell, a Professor of Behavioural Science in the School of Psychology at the University of New South Wales.

Clea Smith, CEO of Tradeswomen Australia, which offers bias training to businesses, says humans are naturally biased. “The only way our brains can make sense of the world is to simplify it by putting things and people into mental category ‘buckets’,” she says.

It’s a human condition, rather than a character flaw. It’s a preference for what you know, as opposed to what you don’t know.”

How bias gets in the way

Bias can protect us from harm, but it can also cause mistakes and prevent you from experiencing new and good things on the job.

“Say you’re used to installing things in a particular way and there’s a fairly set routine that you follow for that installation,” says Prof Ben. “Then you move to a different setting where things might be quite similar, but there’s something crucial that’s different about this particular method of installation.

“There may be a temptation to employ a heuristic that will typically work in most circumstances – for example, do A, B, C and then D. But in this particular situation, you need actually need to do A, B, C and then X because the way that the system is set up is different.”

Impact of bias on recruitment

When you’re the boss, the potential impact of bias on recruitment is significant, Clea says. “You might have a standard process of who you recruit – perhaps a referral through family, someone who lives close by or someone who looks like you,” she says.

Bias can also get in the way of using new suppliers, developing your business plan and expanding your business. “Maybe you have some biases about change, how you’re going to get there, or your own capabilities or the capabilities of your staff,” Clea says.

We probably don’t need to tell you that bias can be about someone’s ethnicity, gender, age, accent or sexual orientation, and that it can result in the creation of unfair advantages or disadvantages. “It could affect who gets a promotion, who loses their job and who has a good or bad experience at work every day,” explains Clea.

Biases against apprentices and female tradies are especially common and frequently reinforced. The trouble is that beliefs about who is capable of doing what on the job can be misinformed and fuel missed opportunities for workers and businesses. Your bias may stop you thinking about how you can help everyone perform at their best – and how this can help your business grow.

Banishing bias at work

 It’s not possible or even desirable to completely get rid of bias, but being aware that your brain’s trusty shortcuts may not always be accurate – or fair – and a healthy dose of self-reflection can help to keep troublesome bias in check.

“What’s great about being human is that we can consciously make decisions to change if we’re going to benefit from them,” Clea says.

Prof Ben agrees.

Say you need to employ a new electrician. Instead of honing in on your preference (read: bias) for a 40-something bloke with a bit of experience under the belt who lives close by, expand your pool of candidates.

“Perhaps there’s a great young worker who lives far away but always turns up on time and is trustworthy,” Clea says, explaining that Tradeswomen Australia works with employers to attract and retain tradeswomen to reduce skills shortages.

Or maybe you’re interested in a new supplier but worry about a potential language barrier. “If they’ve got the product you need, making an effort to overcome any communication issues is worth it,” Clea suggests.

Ultimately, banishing bias is about putting those mental shortcuts to one side every now and then, and letting your brain do the hard yards. “It can really transform the way you react to situations and run your business,” Clea says.

Different types of bias

Brains are weird and there are oh-so-many different types of bias. Here are some psychologist favourites:

• Availability bias – making decisions based on how easy it is to remember something. Why we buy a lottery ticket after reading about a recent multi-million-dollar winner.
• Similarity bias – forming a favourable view of people similar to ourselves. Why we hire sparkies who look like us.
• Negativity bias – bad events making a bigger impression than positive events. Why we don’t take risks.
• Familiarity bias – thinking things we’ve done before are better than things we haven’t. Why we use the same suppliers over and over.
• Confirmation bias – favouring information that confirms our existing beliefs. Why we only pay attention to news that supports our viewpoints.
• Hindsight bias – the “I-knew-it-all-along” effect. Why we overestimate the predictability of events after they’ve occurred.
• Anchoring bias – being influenced by the first piece of information we encounter. Why, when negotiating a job price, the initial offer serves as an anchor point.
• Self-serving bias – attributing positive outcomes to our abilities. Why we blame external factors for negative outcomes.
• Bandwagon effect – adopting certain behaviours or beliefs because others do. Why trends and fads happen.
• Halo effect – an overall impression of someone influences how we perceive specific traits. Why if we find someone attractive, we may assume they’re also intelligent or kind.
• Dunning-Kruger effect – people with low competence tend to overestimate their abilities, while experts may underestimate theirs. Why you’ve got to keep a close eye on that new apprentice.
• Optimism bias – believing positive events are more likely to happen to us than negative ones. Why people underestimate their risk of accidents or health issues.

Bias or experience? 

Wondering if it’s bias or experience guiding you? Well, it’s both – your bias is a result of your experiences in life.

“As you grow up, you develop bias. It’s natural and it’s not a character flaw to have a bias. It’s just a bias – a preference for this over that,” Clea says.