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Biases MBAs need to avoid

Leadership + Management

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“Survivorship bias”, “anchoring”, the “availability heuristic” and the “confirmation bias” – these are mental errors that can hamper an MBA’s development, a current analysis suggests. But how to avoid these trapdoors in your career?

According to a TopMBA analysis MBA students and graduates need to avoid stepping into some dangerous trapdoors during their education and career development. Amongst them is the so-called “survivorship bias” which refers to the human tendency to concentrate solely on the winners and try to learn from them while paying little or no attention to the losers who probably worked along the same strategies as the winners but still failed. As an example, the article cites that it might not be a sure path to success to follow the advice of a famous businessperson.

Another mental error is “anchoring” which shows the common tendency of relying on the first piece of information we discover – the ‘anchor’ – when making decisions instead of making sure that this anchor is actually legitimate for the product. A deeper research and doubting information until it is proven right are the keys to avoiding this common error.

The “availability heuristic” is another bias in that category as the human brain often makes the mistake to weigh the first examples that come to mind as the most important ones. The TopMBA article describes an interesting real-life example where an MBA student at Harvard Business School described how as a purchasing agent he selected a supplier with the most familiar name. Later he found out that he knew the name solely due to negative publicity the company had received because of illegal activity.

The “confirmation bias” describes the human tendency to look for and prioritise information that confirms our pre-existing views on a specific topic. “Humans don’t like to be wrong and will look for any evidence to prove our way of thinking is right – and this can lead to a downfall in business,” the author explains. A solution to this bias is to hire a devil’s advocate’ when big decisions are on the horizon, to ensure the result is fair.

Read more on www.topmba.com

 

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