5 Leadership Biases Standing in the Way of Small Business Success

As human beings, it’s nearly impossible to approach every business problem with complete objectivity. Could any of these 5 common leadership biases be standing between your small business and its own success?

Discover 5 Leadership Biases that Could Be Slowing the Growth of Your Business

Learning to identify these five common business leadership biases can help small business leaders make more objective decisions, provide stronger leadership and – hopefully – lead to greater success and profits for their small business.

A small business owner’s personal history, education, values and entrenched biases often influence their decisions in the workplace whether they know it or not. Thought leaders McKinsey & Company recently published an article giving insight into the most common leadership biases that tend to creep in to management and decision-making processes, and have the ability to get in the way of small business success.

You might also like: Help Wanted: A Boss We Don’t Hate

By exploring the five major leadership biases that commonly influence decision-making and leadership in the workplace, you can learn to identify them when you see them cropping up in your small business and make sure that they don’t stand in the way of your success.

5 Common Leadership Biases that Might Keep You From Success

1. Pattern Recognition

Pattern recognition occurs when we give more consideration to recent events, assign more importance to highly memorable events, formulate a theory and then afterward look for evidence to support it (and ignore evidence to the contrary), or when we look for and see patterns where they may not even exist.

While it is true that those who won’t learn from history may be doomed to repeat it, it is also possible for us to mis-interpret historical events and occurrences and run the risk of coming to conclusions without real evidence. Try not to draw conclusions (and take consequent actions) without first looking at the problem through a wider scope or from a different angle, brainstorming alternatives or even trying to argue from the opposite point of view.

2. Action Orientation

Quotes from successful small business leaders who grew their businesses into giant, profitable endeavors about taking action are plentiful. Most seem to encourage those who would follow in their footsteps to take as dramatic and risky actions as possible, as quickly as possible, and as often as possible, in order to achieve similar results.

We all need to be encouraged to take a leap of faith from time to time but that doesn’t mean that every scenario calls for immediate action. In fact, there are times when not taking action is the best thing to do. But doing nothing or delaying action doesn’t usually feel like the right thing to do – and can be especially difficult for leaders with an action-oriented small business entrepreneurial mindset.

To counter this tendency, take time to make lists of pros and cons, risks, uncertainties, threats and any unknowns. Create best and worst case scenarios and map out exit and contingency strategies before taking action. Listen to people who aren’t as optimistic about your intended course of action and take what they have to say into account.

3. Stability Bias

Stability biases keep us from taking needed or helpful actions in order to maintain the status quo. Inertia can be just as crippling to an organization as taking a blind, action-oriented “leap of faith” and damaging something in the process.

To be sure that inertia due to stability bias doesn’t get in the way of success for your small business may require you to create conditions where not changing course is more uncomfortable for you and your staff than the perceived risk and loss that will come with taking action. You may need to get people excited about the potential gains to be made by taking action so they are more willing to leave the ‘safety’ of the status quo. One way or another, you have to shake things up!

4. Self-Interest or “Silo thinking”

If you have ever tried to implement an organizational change that seemed like a “no brainer” only to be met with individual or departmental resistance you did not anticipate, you may have run head first into interest bias. It’s human nature to evaluate change in light of how it will impact or what we believe to be best for us as individuals or for our department, even if that runs counter to what is in the best interest of the organization.

Once you have identified this bias, identify whether resistance is based on interest bias (or genuine concerns which should be factored into your decisions) and discuss it openly within your organization. Look for ways to minimize negative impacts to valued employees or departments and discuss how the actions you are taking will improve things for the organization – and ultimately – for them as well.

5. Social Pressures

Social bias often manifests its presence in the form of “group think” but can also be displayed in leaders and followers, such as when staff tends to side with powerful, charismatic or otherwise influential leaders without much thought; dissension is rarely a problem for organizations characterized by social bias.

A lack of dissension is not always a good thing. Iron sharpens iron; without evaluating opposing viewpoints and considering issues from multiple angles, it less likely an organization will come to the best decisions and take the actions most likely to lead to growth and success.

The bottom line is this: Your small business success is more likely to occur in an environment where healthy discussion, dissension and even disagreement exist where stakeholders are aligned to common values and working toward common goals. Build a team of people with diverse backgrounds and world views:

• Create a culture of common, shared values
• Set parameters for healthy discussions and risk-free expression of dissension
• Discuss problems, threats, risks and opportunities openly – and often
• Encourage brainstorming and an environment where ideas are welcomed
• Give people the chance to feel like “owners” of their department, idea or a project
• Facilitate decision making – don’t dictate it

***

The business financing experts at My Factoring Brokers can help you make the success you envision for your small business a reality! Find out how to access working capital and improve cash flow so that you can focus on the strategies that will lead to business growth and profitability.