Confirmation bias is not a phrase we hear often in the business world, but it plays a vital part of how we make decisions. Confirmation bias means we tend to place emphasis on facts that support our conclusions and ignore facts that oppose those same decisions. Think of it as an internal “yes man” echoing back your beliefs. Making decisions based on biased information can lead to poor outcomes, whether it is in your personal life or in business.
As an example, let’s say you’re a business owner who is trying to decide whether you should go public with your business. You will likely consider the success of other people you know who have taken their business public. The danger of confirmation bias is that if you have already decided you want to go public, you will give more credit to the individuals that have had success going public, and ignore those who have not done as well. This biased reasoning may make you overconfident in your decision to go public, even if it is not a good idea.
One of the best ways to mitigate the risk of confirmation bias is to bring in an external advisor when making vital business decisions. Skoda Minotti professionals have years of experience in various fields and are familiar with the challenges businesses owners face. As advisors, we will give honest, unbiased feedback that will help with complicated decisions and lead to choices that are better for your business, such as Mergers and acquisitions and taking a business public.
To learn more about how Skoda Minotti can help your business, call 813-228-8826 or visit www.skodaminotti.com.