Blind Spots, Echo Chambers, and Groupthink

Do your meetings lead to debate - or delusion? Don’t think you’re safe when making decisions alone. Making decisions alone leaves you vulnerable to blind spots that others can easily see. 

Much of this comes from confirmation bias. My short definition of confirmation bias is “only seeing what you want to see.” The long definition is:
“A subconscious search for information to confirm the hypothesis previously assumed while at the same time avoiding any confrontation of facts that could be contrary to the opinion so far expressed” (Behavioral Finance, Baker and Nofsinger, p.362)

More common terms for this are blind spots, echo chambers, and groupthink. So how can we see and hear clearly to make better decisions?

One method is the devil’s advocate. Appoint someone to argue for the side that most of the group disagrees with. 

Another method is called the premortem, which comes from Gary Klein. Have the group answer the following question: “Imagine that we are a year into the future. We implemented the plan as it now exists. The outcome was a disaster. Please take 5 to 10 minutes to write a brief history of that disaster.” (Thinking Fast and Slow, Daniel Kahneman, p. 264)

Working alone? Talk with a trusted colleague or coach for a different perspective. They aren’t subject to your emotions and biases. You could also do a premortem.

I wish you clear vision and I wish you well.

- Rob Stephens

Further Insight

CFO Perspective Resources

  • Free Download: SWOT Analysis Template - The SWOT template pack comes with five documents to help you quickly conduct a SWOT analysis.
  • Video: How To Avoid Business Decision-Making Mistakes - I explain some common business decision-making mistakes and how to overcome them. Learn more about dozens of decision mistakes and how to avoid them in my behavioral finance program.
  • Course: Behavioral Finance - Overcome your destructive financial impulses by understanding common thinking mistakes. With my Behavioral Finance course, you can avoid these costly financial decision-making mistakes. The course will help you to learn science-backed ideas to make better financial decisions.

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