Are business issues more important than people issues? Could Warren Buffett be wrong? So, why would we post an article that starts by disagreeing with him? Perhaps if only to suggest that even one of the greatest business minds of all times can succumb to a paradox.
While this series will touch on big and ugly paradoxes (we started with the 1st paradox being - unbiased decisions) that are arguably easy to recognize, this example is so 'obvious' that one could get bitten by it through lack of attention or better sounding, "cognitive bias".
Perhaps the best way to illustrate how this paradox works (as in “bites you”) is with a cross section (in summary form) of (just some) of the errors/biases that I have discussed in various articles. As always, I have tried to simplify (oversimplify?) the content so as to make it quickly digestible. For example: biases are not necessarily irrational (but can still be problematic).
I am willing to bet that the majority of business people feel that all their ideas originate in the brain and that the behavior of their colleagues does so as well. Actually, this seems like a safe bet since the unofficial/unscientific survey I’ve conducted verifies this. What if that was not the case?
It is important to note – not all biases are irrational. Indeed biases may be completely rational yet still produce thinking errors and undesirable outcomes.
“A cognitive bias is a genuine deficiency or limitation in our thinking – a flaw in judgment that arises from errors of memory, social attribution and miscalculations (such as statistical errors or a false sense of probability).” ~ George Dvorsky
I suppose it is possible, after reviewing the list of biases that I have flagged (Part Two of this series, "The Ironic Magnitude of Cognitive Biases") as most likely (and perhaps) even after my reference in that post to there being about 150 identified cognitive biases, that someone should conclude it’s not that much to worry about.
Just to compound the situation of thinking errors still further: the more time you spend making decisions (including trying to avoid the hundreds of “traps” that are out there) the lower your overall willpower will be.