5 tips for avoiding Founder's Bias — How to get out of your own way and grow your company
Whether you’re just beginning to venture into the world of entrepreneurship or are years into your business, as a founder, one of the most critical roadblocks in the success of a company is Founder's Bias. Founder’s Bias is the common tendency for founders to allow their own preconceived beliefs, ideas, and opinions to shape their decisions in business without sufficient consideration of all external factors and opposing viewpoints. Generally, these beliefs originate from past experiences or external suggestions that the founder has internalized as concrete.
“Founder’s Bias is the common tendency for founders to allow their own preconceived beliefs, ideas, and opinions to shape their decisions in business without sufficient consideration of all external factors and opposing viewpoints. Generally, these beliefs originate from past experiences or external suggestions that the founder has internalized as concrete.”
The consequences of allowing this type of bias to direct decision making often results in preventable setbacks actualizing and becoming more critical than necessary. Oftentimes, had countering opinions and all potential variables been properly considered from an objective perspective, these setbacks could be avoided. In today’s blog, we’re diving deep into what you can do, as a founder, to make sure you stay open to the ideas of others and get out of your own way when it comes to growing a successful business.
#1: Don’t neglect feedback
As a founder, one quick way to filter out Founder's Bias from your business decisions is to get out of your own head, and into the minds of others – getting feedback. While it is often difficult to effectively apply feedback to your own voice and decision-making, it can be extremely productive in reducing Founder's Bias if done successfully. As a founder, not only recognizing that you do, in fact, have bias towards your own products and company direction, but also asking your trusted inner circles, employees, and fellow leadership to point out your bias blindspots can be an intimidating task; however, it is one that opens valuable new doors to areas of growth and development in your business.
#2: Challenge your confirmation bias
When it comes to Founder's Bias, creating and leaning on a diverse group of opposing individuals to counter your beliefs is critical. The key to reducing Founder's Bias is consistently consulting individuals who challenge and bring light to not only your own bias, but to new ideas and directions for growth and decision making within your company. Engaging with opposing viewpoints and new ideas on a regular basis pushes you to become more comfortable with recognizing and challenging your own bias on a day-to-day basis. Confronting your Founder's Bias makes room for greater collaboration, growth, and productive experimenting in your business.
Furthermore, consistently exposing yourself to opposing viewpoints allows you to better recognize confirmation bias, as well. According to the Founder Institute, the negative repercussions of confirmation bias come as a result of the tendency for “founders to latch onto information–no matter how tenuous–that confirms pre-existing beliefs and dismisses naysayers or negative information. This bias can lead to the death of a startup by causing the founder to ignore critically-important information.” It is crucial to sufficiently tackle roadblocks in your business from new perspectives in order to recognize all potential outcomes in the decision making process.
“Founders [tend to] latch onto information–no matter how tenuous–that confirms pre-existing beliefs and dismisses naysayers or negative information. This bias can lead to the death of a startup by causing the founder to ignore critically-important information.”
When creating your inner circle of trusted advisors to offer opposing perspectives, try seeking innovative external voices. This is key to reducing confirmation bias, as this bias is often fueled by exclusively considering the opinions of those who will reaffirm your decision and your preconceived beliefs, rather than productively challenge them. You can count on the voices of trusted external experts to not only properly value and take into consideration your own beliefs and perspective, but to offer an informed and thoughtful perspective in every critical decision.
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#3: Optimism vs. overconfidence
Oftentimes, the more successful a founder becomes, the more they begin to trust their own voice. While establishing this confidence is definitely a positive development in decision-making, it can also leave founders closed off to change and counter beliefs (which can in turn lead to Founder's Bias). It’s important to distinguish this sense of certainty and its ability to create bias in decision-making as overconfidence vs. optimism. According to a study from Frontiers in Psychology in the National Library of Medicine, “overconfidence has a statistically significant negative impact on entrepreneurship intention”, which comes as a result of relying primarily on overconfidence to compensate against unknown risks.
Relying on overconfidence as a response to potential risk also comes as a result of trusting assumptions over fact in decision-making. In fact, overconfident founders tend to overestimate the likelihood of predicted outcomes. This, in turn, can lead to critical error and neglect of potential risk and variables. So, as a founder, the best way to properly prepare to mitigate risk and combat overconfidence is through seeking an optimistic outlook rather than an overconfident one. Adopting an optimistic outlook “greatly reduces the risk that enterprise founders perceive in the entrepreneurial process, allowing them to assume that they can control the uncertainties and outcomes of internal and external environments, so that they can make the appropriate entrepreneurial decisions quickly.” As opposed to overconfidence, optimism offers a more open-minded and productive approach to potential risk.
Need a quick and easy way to help combat overconfidence in times of critical decision-making? Ask yourself the following: do you remember all of those preconceived assumptions you had about your business before you actually entered the ring? Well, if so, then you also know that acknowledging and facing risk, reevaluating your beliefs, and changing directions is often the key to early development and growth. The importance of an open and optimistic mindset in your decision-making reigns true and timeless, even in the thick of success.
#4: Be okay with taking a backseat
Sometimes, as founders, the hardest part of reducing our own bias comes with a fear of letting go. And, rightfully so. So often we invest so much time and energy into building our business, and we’d rather listen to our own voice than risk letting new voices and perspectives be heard. If you can resonate with this feeling, it’s because you understand the pressure and high stakes that can come with a high-level leadership role in business. Be cautious, though, developing an overly emotional attachment to your company will lead to a tricky problem: “entrepreneurial businesses can be inhibited by prioritizing the needs of the entrepreneurial CEO over the needs of the business.” And what’s the first step to avoiding this issue? According to INC., your first move is to “stop thinking about your own reputation and happiness as tied to the business. Be willing to let the business live or die, shrink or grow, and focus or expand based on financial and strategic decisions, rather than your own biases.” Do not mistake the power of listening to new perspectives as weakness. A successful founder is one who honors discovering and transforming new areas of growth in their business – one who can remain open-minded and take a backseat when warranted.
#5: Practice patience, with yourself and with your decision-making
Ridding yourself of Founder's Bias isn’t something that happens overnight. Just like building your business, reducing your bias isn’t always a linear path. In fact, the more self aware you become, the more biases in your own voice and decision-making you’ll unveil. Having patience with yourself and engaging with your employees and their feedback is extremely important in reducing a Founder's Bias in the long term.
In fact, relying on biases most often comes into play during high-pressure situations when there is limited time to make a decision, so patience is key. According to the Journal of Business Venturing, founders rely most heavily on their bias when they “face situations that tend to overload their information-processing capacity and are characterized by high levels of uncertainty, novelty, emotion, and time pressure. Together, these factors may increase entrepreneurs’ susceptibility to a number of cognitive biases”. Honoring patience during this process is the key to remaining open-minded during high-stake situations. A patient perspective will not only improve the quality of your own decision-making capabilities in times of stress, but of the outcomes of these choices for your business, as well.
“In fact, relying on biases most often comes into play during high-pressure situations when there is limited time to make a decision, so patience is key.”
Addressing your own Founder's Bias is often the key to productively redirecting and reviving your company through a more open-minded lens. These five tips are valuable steps to help you begin the process, but collaborating with real voices from companies who specialize in strategic growth and development will help guarantee Founder's Bias is no longer driving your business decisions. EnticEdge helps mission-driven companies, like yours, leverage their authentic edge. Same incredible missions, stronger growth. Contact us now if you’re ready to accelerate your business growth with the refreshing voices of EnticEdge!
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