Thinking Biases to Avoid in Strategic Planning
Biases are human. We all have them. It is how we are wired. Unfortunately, when it comes to strategy, these biases can have major consequences.
There are many human cognitive biases. In our experience, there are five biases we see repeat most often that negatively impact strategic thinking and planning processes.
The five key biases are:
1. Confirmation Bias
This is big one. Confirmation bias involves seeking out evidence and opinions that validates what we already think and, worse still, completely discount or ignore evidence that doesn’t. As it’s extreme, when challenged, someone with strong confirmation bias becomes more entrenched in their views and more determined to prove they are right.
2. Sunflower Bias
In almost every organisation and team, there is a tendency to align with the expressed or assumed opinions of the leader. This greatly suppresses contrary views being expressed. Almost always, leaders want more challenge and debate than they get. Yet, despite expressing this, it rarely happens. This is because constructive conflict requires a foundation of trust. Trust doesn’t just happen. It is hard-earned and easily lost.
3. Planning Fallacy
Another common bias is to completely underestimate how much time and money a strategic initiative will take to implement. This leads to insufficient budget and burnout of those trying to achieve what was totally unrealistic in the first place!
4. Information Biases
I have grouped a few here – anchoring bias, framing bias and availability bias. In short, these information biases result in;
weighting the first piece of information (the anchor) more highly information that comes in later
being influenced by how the same information is framed (either positively or negatively)
weighting information that is more easily recalled, or available, over information that is more complex or less memorable
5. Optimism Bias
The optimism bias is to totally overestimate the likelihood of positive outcomes, leading to unrealistic goals and forecasts. The short-term dopamine hit is often replaced by the disappointment of reality, even when the reality is a good result.
Overcoming Biases
Happily, avoiding, or at least minimising, these biases can be built into the strategic planning process.
Some key steps you can take are:
Involve as many perspectives as you can. The more people that are involved, the more strategic thinking breadth and depth is created, and the more insights and perspectives are considered. It is in this collision of thinking that the greatest gains are made.
Have someone neutral design and facilitate the planning process. This allows the leaders to sit back, listen, remain curious for longer and ask questions.
Breaking the wider group into smaller working groups and drawing out the best in everybody in the room. Dividing planning sessions into small groups that change throughout the process provides opportunities for increased participation, allowing different team dynamics to play out and all voices to be heard.
Create a safe space to challenge assumptions, seek diverse perspectives, have debate, think critically and creatively, innovate and welcome contrary views.
Bring in as much objectively framed data and evidence as you can. Create and test a range of options or scenarios.
Summary
Biases are human. We all have them. It is how we are wired. Unfortunately, when it comes to strategy, these biases can have major consequences.
In our experience, there are five biases we see repeat most often that negatively impact strategic thinking and planning processes – confirmation bias, sunflower bias, planning fallacy, information biases and optimism bias.
The good news is that these biases can be mitigated through good process design. Involving as many perspectives as you can, having someone neutral design and facilitate the planning process, break the larger group into smaller, ever-changing ones, create a safe space and bring as much objectively framed evidence to the process will ensure their influence is minimised.
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