Beware Your Decision Making Benchmark

These kids were loud.  Really loud.

I know you’re thinking, all kids are equally loud, right?  Yes, but some are more equal than others.  Take my friend for instance; his kids are overachievers in this category.  We were chuckling about this as we were watching a bunch of rambunctious boys unsuccessfully compete against the girls in a game of “who can be quiet the longest”.

My friend proceeded to share a story about his 3rd grade son that made us all chuckle.  Apparently his son’s elementary school teacher has a conduct system whereby each child receives a color grade at the end of the day. Cool colors like blue and purple are good.  Warm colors like yellow and orange are trouble.  Green is neutral. 

When his son began bringing home more sunshine than sky on his daily report, they knew he was losing the game of “who can be quiet the longest”.  As supportive parents, they instituted a discipline process to encourage improvement.

Suddenly the young man began bringing home steady blues and greens, where he had only received three blues the previous four months.  Obviously, their genius parenting skills were paying off… or so they thought.

When they inquired further, they learned his teacher changed her policy and began starting his son on blue (good), not green (neutral) if his homework was signed by his parents. 

This story highlights a cognitive bias that impacts all of us.  It’s called the contrast effect.  Our human tendency is to compare things relative to each other to determine their value.  By starting this rambunctious 3rd grader on blue rather than green, this teacher was creating a new relative value.  While this change benefitted my friend’s son, this cognitive bias can also mislead us.  The contrast effect bias can influence everything from our definitions of success to our purchasing decisions.  Here are some tips to help you overcome this bias in your business.

  1. Evaluate Choices Based on Needs – Clever marketers frequently offer three choices, including an expensive “decoy” option, which encourages most of us to choose the more expensive of the two remaining options.  Instead of comparing value relative to the three options, get clear on your needs and buy only what is required for success.
  2. Define Success Objectively – When defining exceptional performance, we often look to existing examples in our organizations.  Unfortunately, we rarely ask if these examples are truly exceptional, or if they are simply “the best of what we can see.”  Instead, try and define excellence without referencing any comparisons.
  3. Look Outside – If you truly want to innovate, comparing yourself to others in your industry or will only lead to incremental improvement.  Instead, broaden your comparison to areas outside you immediate business to encourage game-changing ideas.

At Action Management, we have been helping clients improve their critical thinking for nearly forty years.  If you and your organization want to avoid the cognitive bias that leads to poor decisions, we have proven tools and techniques.  Just give us a call at 800-386-5611.  We would love to help you improve on your successes!















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