Biases are everywhere. Like anything else, they can be good and bad for an organization. One important bias needing monitoring is the self serving bias. Psychology Today defines it as attributing positive events to themselves and negative events to others. It is very dangerous for a company or industry when this bias is present in a strong manner. Especially when the marketplace moves forward from the workings of the organization. Having a self serving bias can endanger the business’ value. KeaneVCC regularly uses as much transparency as possible to analyze what were the most truthful and important factors in creating results from its processes and the processes of its partners. How present is the self serving bias is a question regularly asked.Using systems like transparency can limit this bias and provide better decision making and therefore create better results for the company and industry.
The energy industry is going through this to an extent. Recent reports in the news have shown that there are companies and executives within the industry that are unfortunately are just now acknowledging the present and future success of electric vehicles. Recently, there have been story upon that showed executives are understanding the level that electric vehicles will have on their industry. This should have happened a long time ago. It is pretty clear that the self serving bias was part of the delay.
KeaneVCC clients KDK Fund and KDK Options run into this also. The ability to switch and remove a bad investment comes regularly with a fight with self serving bias not wanting to be wrong. It's very easy in this industry to unload the responsibility onto others and accept the successes as a product of your own genius.
Transparency has been a good way to understand how to overcome this bias. This is a place where the board of a company or industry council can really work its magic. Having a part of the team that analyzes possible scenarios that go against can have a long term positive benefit for any organization.
There are some questions you can ask to find out how influential (there is some self serving bias in most decisions) this bias is and how appropriate that level is to your company or industry's risk is. Is the successes and issues with the company or industry self driven or outside driven? If the answer is one way for the successes and the other for the issues, there is probably a wonderful opportunity for change.
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Thank you!
Is there someone you know that might benefit from this? Be sure to pass it on. Would you like to be on our mailing list? Click on this link (here) to register.
** This blog is used for opinions and ideas and should not be used as a direction to act without doing your due diligence.**
