Cognitive Biases That Distort Reality At Work

I have made multiple mistakes throughout my career as a developer, manager and even in leadership positions. Most of these mistakes were not because of the gap in my knowledge, experience or skills, but because of my thinking—my thoughts guided not only how I experienced the things around me, but also how I interpreted and reacted to them. Looking back, I can see that I was clearly biased, but everything I said and did seemed rational in those moments. My biases colored my thinking, clouded my judgment and made me act in unreasonable ways. 

I made decisions that confirmed my opinions while disregarding contradicting evidence. I overestimated my knowledge leading to an underestimation of risks. I was quick to judge other people’s behavior without taking a moment to understand the situation that might be contributing to it. I exaggerated the worse-case scenarios leading to doubt and inaction. I kept on dragging ideas and projects that clearly did not work only because I had invested time and energy into it. And the worst of all, I was highly optimistic in how long it would take to do something, leading to unnecessary stress and anxiety when I failed to meet those commitments. 

A lot of these mistakes could have been avoided if only I had learnt how to think better—catch my biases, question myself and not jump to conclusions. My irrational thought patterns that made me perceive reality inaccurately could have been replaced with more rational and thoughtful decisions. My tendency to disproportionately zoom in on the negative could have been substituted with a more balanced outlook. My defeatist reaction to unfavorable circumstances could have been prevented by adopting a more hopeful point of view.  

If you are wearing yellow goggles, every blue thing will appear green to you. It is your perception, and it is your reality.
― Naved Abdali

Learning to examine my thoughts, question my choices and challenge my viewpoint could have made me a better individual contributor, manager as well as a leader—I could have been less biased and more practical in my decisions. I can’t go back in time and undo those faults, but I can certainly be more conscious and self-aware for the rest of my journey. While a human mind is susceptible to hundreds of biases, I realized that not every bias deserved my attention. Learning about a few important biases and consciously applying them at work has made a huge difference in the quality of my decisions and the outcomes I achieved. 

Confirmation bias

You may hold your opinions and beliefs dearly—anything that conforms to your ideas catches your attention while contradicting pieces of evidence gets ignored or neglected. When someone challenges your personal narrative, you may label them as ignorant, evil or outright stupid. When presented with data that does not match your conclusion, you may look for information that strengthens your point of view while disregarding everything that challenges it. 

You may not only refuse to update your mental models that shape how you perceive reality and process new information, confirmation bias can strengthen your old beliefs, making you hold them in high regard—you may become rigid and entrenched in your opinions to the point of creating self-fulfilling prophecies. Your desire to be right can crush the intent to find the objective truth. 

This tendency to notice, focus on and interpret information to match your views leads to bad choices and poor decisions. Recognizing this bias and taking conscious action can make you more flexible and cooperative and less stubborn in sticking to your beliefs. 

To recognize confirmation bias, ask yourself these questions:

1. Are you only paying attention to information that supports what you already believe?
2. Have you looked for evidence that contradicts your viewpoint or have you ignored it?
3. Are you interpreting ambiguous information to fit your expectations?
4. What alternative explanations or perspectives have you not considered yet?
5. Did you dismiss certain facts because they made you uncomfortable?
6. Is your conclusion based on solid evidence or what you want to be true?
7. What do people who think differently have to say about this?

Our narrative of being a knowledgeable, educated, intelligent person who holds quality opinions isn’t compromised when we use new information to calibrate our beliefs, compared with having to make a full-on reversal. This shifts us away from treating information that disagrees with us as a threat, as something we have to defend against, making us better able to truth seek. 
— Annie Duke, Thinking in Bets

Stop clinging to what you want to believe. Stop seeking proof that matches your belief. Stop looking for patterns that don’t exist. Stay close to reality by becoming flexible to update your belief system—challenge your viewpoint, invite dissenting opinions and use new information as a catalyst for better thinking.  

Dunning–Kruger effect

When you lack experience, knowledge or skill in a certain area, it’s easy to overestimate how much you know and underestimate what you don’t know. You may make decisions with incomplete information, underestimate risks, take on tasks you aren’t prepared to handle and dismiss feedback with the belief that you already know enough. You may dominate discussions, speak with unwarranted certainty and ignore expert input, making highly skilled people feel unheard and undervalued. 

A false sense of mastery can promote a strong conviction in your ideas and knowledge. You may fail to notice gaps in what you know and refuse to identify what you don’t know. You may become so blinded by your strengths that you fail to see your weaknesses. Driven by the desire to seem more competent, you may become blind to your own incompetence—with just enough information, but not enough expertise. Never stopping, never listening, never asking. There’s no place for humility to step in. 

The Dunning-Kruger effect can cloud your vision of your abilities—the less competent you are, the more you may overestimate your abilities. The more you lack competence, the more you’re likely to be brimming with overconfidence. Sort of a catch 22. Without the skills to spot your own mistakes, you can’t see where you’re going wrong and therefore assume you’re doing great. 

To recognize Dunning-Kruger effect, ask yourself these questions:

1. Are you feeling unusually confident despite having limited knowledge?
2. Have you compared your skills to those who’re more experienced?
3. What specific gaps or weaknesses might you be overlooking?
4. Did you dismiss feedback or gaps pointed out by others?
5. What evidence shows that you’re actually doing well?
6. What signs can help you determine if the task is more complex than your estimation?
7. When was the last time you sought guidance from someone more skilled?

Arrogance is ignorance plus conviction…an especially deadly combo because it prevents you from improving. It not only leaves you without real knowledge, it deprives you of the humility needed to gain real knowledge or grow into a better thinker. When you think you are already doing great, you feel like there’s no room left for improvement. While humility is a permeable filter that absorbs life experience and converts it into knowledge and wisdom, arrogance is a rubber shield that life experience simply bounces off of.
— Tim Urban

You’re more likely to overestimate your knowledge than underestimate it. Stop acting like an expert in areas you don’t know well. Stop dismissing feedback or advice. Stop assuming that you have achieved mastery. Grow your abilities and build your skills by combining confidence with humility—stay curious, ask questions and validate your understanding instead of assuming you’re always right. 

Fundamental attribution error

Think of the countless times you labeled someone at work as “lazy, boring, incompetent, stupid, irritating, biased, reckless, rude…” The lens with which you see others makes all the difference—are you quick to judge and label them or do you take a moment to pause and adopt an attitude of understanding? How someone reacts to a situation is shaped by their own temperament, past experiences and their circumstances. Their behaviour in one area does not reflect who they are as a person, what they value and even how they would be in another aspect of their life.

A delayed email response does not mean someone is irresponsible, a quiet teammate is not necessarily disengaged, a tense tone is not always rudeness, someone disagreeing does not make them difficult and a missed detail does not mean others are careless. Yet, we assume that’s all there is to the story. 

Snap judgments without careful consideration rules our workplaces and our lives. We are quick to stamp people as “this is who they are” without taking a moment to step back and analyze the situational factors that might contribute to their behaviour. The less we know about someone, the easier it’s for us to label them and then stick with those assumptions.

Fundamental attribution error can make you attribute a person’s behaviour to their character without taking into account the limitations and constraints within which they might be operating. You may jump to the conclusion that their behaviour is a reflection of “who they are” without taking time to analyze the situation that might make them behave in a certain way. Misjudging others’ intentions and labeling them unfairly can lead to tension, unnecessary conflict and create a culture where people feel judged and misunderstood rather than being supported. 

To recognize fundamental attribution error, ask yourself these questions:

1. Are you judging someone’s character without considering the situation they might be dealing with?
2. What external factors could have influenced their behavior that you might be overlooking?
3. Under what circumstances can you see yourself behave in a similar manner?
4. Are you jumping to conclusions based on a single action?
5. Would you interpret their behavior differently if it was someone you liked or trusted?
6. What could be an alternative explanation for their behavior?

The mistake we make in thinking of character as something unified and all-encompassing is very similar to a kind of blind spot in the way we process information. Psychologists call this tendency the Fundamental Attribution Error (FAE), which is a fancy way of saying that when it comes to interpreting other people’s behavior, human beings invariably make the mistake of overestimating the importance of fundamental character traits and underestimating the importance of situation and context.
― Malcolm Gladwell, The Tipping Point

Jumping to conclusions about other people’s intentions is easy, what’s hard is to lead with trust. Stop judging others. Stop seeing the bad in them. Make it a habit to give others the benefit of doubt—analyze their situation, consider different factors, look for alternative explanations. There’s always more to the story than your default reaction. 

Negativity bias

What catches your attention more at work—negative instances or positive experiences? What information stays with you longer—good news or the bad news? What emotions do you feel more intensely—happy feelings or the sad ones? 

Your brain has a built-in alarm system, which is primed towards negativity—every minor inconvenience, every unmet expectation, every criticism and every adversity leaves a more lasting impact than any achievement, any recognition, any praise or any goals you achieve. Positive instances create a momentary happiness, while negative experiences stick around in your memory long enough to haunt you for days and weeks. You obsess over failed projects. You ruminate about bad decisions. You dwell on one piece of minor criticism. You refuse to let go of negativity. 

Negativity bias makes you pay more attention to things that did not go well even when there are plenty of things to rejoice and celebrate. It leads to pessimism, defeatist attitude, exaggeration of worst-case scenarios and overreaction to small problems which lowers your motivation and confidence. Staying fixated on negativity without making enough room for positive experiences heightens stress, distorts reality and impacts decision-making—you may lean towards what’s wrong than what’s working.  

To recognize negativity bias, ask yourself these questions:

1. Are you giving more weight to the one thing that went wrong instead of the many things that went right?
2. Are you assuming the worst outcome without strong evidence?
3. Did you overlook the progress when faced with a challenge?
4. How would you view this differently if you weren’t feeling stressed or anxious?
5. What strengths can help you navigate this difficult situation?
6. What’s a more balanced or realistic interpretation of what happened?

The brain evolved a built-in negativity bias. While this bias emerged in harsh settings very different from our own, it continues to operate inside us today as we drive in traffic, head into a meeting, settle a sibling squabble, try to diet, watch the news, juggle housework, pay bills, or go on a date. Your brain has a hair-trigger readiness to go negative to help you survive.
― Rick Hanson, Hardwiring Happiness

Negativity keeps you trapped inside a dark tunnel where you fail to see the light outside. Get rid of it by consciously seeking the positive. Pay attention to your strengths, acknowledge your progress and celebrate your achievements so that good experiences stick and bad ones are washed out. 

Availability bias

Some moments register in your mind and sit at the forefront of your decision-making process, while others may go unnoticed and take up a back seat in your memory lane. Events that evoke strong emotional responses like fear, joy, anger or shock tend to stick more. Things that occurred recently are also easier to recall because their neural pathways remain strong and are easier to activate. This makes your brain give more attention to recent experiences or emotional experiences that are vivid, memorable and easy to bring to mind. 

But just because something is more recent, emotional, dramatic or repeated does not make it more likely to occur or more valuable than information that doesn’t easily come to mind. Availability bias, however, makes you give more weight to instances that come readily to mind. You may exaggerate the possibility of an event simply by the ease with which its examples come to mind. You may overestimate risk on a new initiative based on a recent failed project, misjudge someone’s competence based on their recent mistake without taking their overall performance into account or hire someone based on their first good impression without taking their true qualifications into account. 

Giving undue importance to emotionally charged events or overvaluing easily available information can make you overlook actual facts and probabilities that are required to make good decisions. 

To recognize availability bias, ask yourself these questions:

1. Are you basing your judgment on the most recent or memorable event instead of seeing the full picture?
2. What data or long-term patterns might contradict with what’s top of mind?
3. Are you assuming something is common just because you can recall it easily?
4. Is it actually a trend or just a one-off moment?
5. How different would be your viewpoint if the incident hadn’t happened recently?
6. What information have you not considered yet because it’s not readily available?

The availability bias says this: We create a picture of the world using the examples that most easily come to mind. This is idiotic, of course, because in reality, things don’t happen more frequently just because we can conceive of them more easily. Thanks to the availability bias, we travel through life with an incorrect risk map in our heads. We attach too much likelihood to spectacular, flashy, or loud outcomes. Anything silent or invisible we downgrade in our minds. Our brains imagine showstopping outcomes more readily than mundane ones. We think dramatically, not quantitatively. If something is repeated often enough, it gets stored at the forefront of our minds. It doesn’t even have to be true.
― Rolf Dobelli, The Art of Thinking Clearly

Stop considering the first thought that comes to your mind as a fact. Stop treating your memory as a reliable source to make decisions. Challenge your thinking. Make the hidden brain connections that will lead to real insights.  

Sunk cost fallacy

Even after trying very hard to make something work, you may not get the desired results—your idea may no longer make sense, situation might have changed or new advancements may require you to focus on a completely different set of priorities. However, quitting something to move on to better opportunities isn’t always easy—the invested time and energy makes you invest further in a failed cause. Your past costs that you can no longer recover drive your choices. You let go of better opportunities in the future by trying to recover your past costs. 

Sunk costs—invested time, money and effort—that are now irrecoverable and no longer relevant to current decision impacts your thinking in a huge way. You fail to evaluate the opportunity cost of sticking with a lost cause. You fail to see all the wonderful opportunities that demand your time and attention. You fail to judge when it makes sense to continue and when it’s time to quit. 

Quitting something requires accepting a personal failure—it requires accepting defeat. Pressure of high expectations and the fear of looking incompetent can make you stick with something that’s clearly no longer effective. Initial rewards can reinforce your belief in your idea and prevent you from noticing when those rewards disappear and your idea starts showing signs of a downward spiral. Instead of reassessing your vision as things turn hard and uncertain, you may stick to the decision with the thinking “if it worked out earlier, it must work again.” Sunk cost fallacy can prevent you from accepting the reality of your situation and push you down a path that must have been abandoned long ago. 

To recognize sunk cost fallacy, ask yourself these questions:

1. What future benefits will you really get by continuing?
2. Do you want to invest further so that your past effort does not feel wasted?
3. If you had not already invested in it, would you still choose it today?
4. What advice would you give to others if they had this choice to make?
5. What are you afraid will happen if you stop now?
6. What would be the cost to continue—emotionally, time-wise and financially?
7. What’s the opportunity cost of staying committed to this?
8. If you walked away today, what would you gain?

When deciding whether to stick or quit, we are worried that if we walk away, we will have wasted the resources we have spent in the trying. You might be experiencing the sunk cost fallacy if you hear yourself thinking “If I don’t make this work I will have wasted years of my life!” or “We can’t fire her now, she’s been here for decades!” Sunk costs snowball, like a katamari. The resources you have already spent make it less likely you will quit, which makes it more likely you will accumulate additional sunk costs, which makes it again less likely you will quit, and so on. The growing debris of your prior commitment makes it increasingly harder to walk away. We don’t like to close mental accounts in the losses. 
― Annie Duke, Quit

Don’t let your future self be a prisoner to your past self. Your past efforts can’t be refunded. All the time you have lost can’t be gained back. You can’t undo your investments. But, you can create a better future by quitting and moving on to new opportunities.

Planning fallacy

When it comes to deciding how long a task will take, how much effort will be required or what obstacles you might face, you may consistently underestimate. Even when the past evidence shows that it usually takes longer, you may gravitate towards the best case-scenario instead of a more realistic one. It took one week to finish a design proposal last time, but if you have to do it again, you’re positive it will get done in less than a week. It took more than a month for new hires to get onboarded last time, but while planning for the new batch coming in next week, you allocate only 2 weeks. 

Planning fallacy makes you commit to overly optimistic timelines, miss those deadlines and then drown in guilt, anxiety and stress. Not factoring in realistic demands of the task leads to poor planning for the future. Missed deadlines lead to overwork, stress and last-minute chaos. Repeatedly over promising and under delivering harms your reputation and credibility—a person who can’t keep up their commitments can’t be trusted. 

When estimating the time it will take to complete a specific task, you may ignore risks and other unlikely events that may prevent you from completing the task. Taking the best case scenario into account and ignoring the obstacles you might encounter along the way leads to wishful thinking. You may have the best intentions to get the work done quickly and efficiently, but good intentions aren’t always enough. Good planning needs good estimation skills. 

Another reason why you may be highly optimistic about completing a specific job is your tendency to get stuck in the nitty gritties while ignoring the big picture. Not taking the big picture into account leads to poor estimation—you make wrong assumptions and ignore the time it will take to integrate your work into a larger ecosystem. You’re also really bad at accurately judging your own skills and abilities. Your enthusiasm to meet your goals adds to the planning fallacy. The worst part is you don’t even learn from your past mistakes. Even when you’re able to recognize past mistakes when you were overly optimistic, you keep on making the same mistakes in the future. 

To recognize planning fallacy, ask yourself these questions:

1. Are you estimating based on the best-case scenario or the most likely scenario?
2. Have similar tasks in the past taken longer than you expected?
3. What challenges or obstacles have you not considered yet that may prevent you from achieving the timeline?
4. Did you include buffer time for reviews, corrections and other unexpected events?
5. If someone else suggested this timeline, would you consider it realistic? 

We’re lousy at figuring out how much time something will take us to complete. It’s a combination of overestimating our abilities and, to add insult to injury, underestimating the degree to which we are overestimating. We think we can do more than we can. 
— Michael Bungay Stanier, The Coaching Habit

Optimism is good at work, but not when it comes to making promises. You need to commit to what’s realistic rather than what seems possible. It usually takes longer to achieve a goal than your original estimation. Bake in buffers. Don’t be foolish. 

Halo effect

One positive trait of a person can influence how you judge all their abilities—someone who appears confident is assumed to be strong leader, someone who is friendly, hence likable, is assumed to be trustworthy, someone who is a high performer in one area is assumed to excel in everything, someone who is a quick problem solver is assumed to have a good judgment and sound decision-making skills. But, just because someone is good at one thing does not make them good at other things. 

Inaccurate evaluations about others skills, competence and abilities leads to biased decisions at work. Charismatic employees may receive better performance ratings even though the outcomes they achieve and the impact of their work is average. Deep knowledge in one area can be mistaken for expertise in other areas leading to unfair assignment of opportunities. Being high energy can be perceived to be hardworking and productive making someone more valued and respected even though they’re less effective. A person with a resume from a big company can be tagged as “top talent” even before they have done any work and proven their intelligence.   

The Halo effect can make you overgeneralize positive impressions without sufficient evidence. You may go easy on some people because you like them while being strict with others. You may be unfair when it comes to sharing feedback or assigning opportunities. You may promote ideas from people you like and favor. You may side with someone without checking facts because you trust them more than others. You may ignore toxic behavior because you can’t believe that someone who’s an excellent coder can do anything bad.  

To recognize halo effect, ask yourself these questions:

1. Are you assuming they’re good at other things because they excel in one area?
2. Have you overlooked their mistakes or weaknesses just because you admire them?
3. Would your assessment change if they were less charismatic?
4. What specific behaviors are you basing this judgment on?
5. What concrete evidence do you have of their performance or skills?    

The halo effect helps keep explanatory narratives simple and coherent by exaggerating the consistency of evaluations: good people do only good things and bad people are all bad. The statement “Hitler loved dogs and little children” is shocking no matter how many times you hear it, because any trace of kindness in someone so evil violates the expectations set up by the halo effect. Inconsistencies reduce the ease of our thoughts and the clarity of our feelings. A compelling narrative fosters an illusion of inevitability.
― Daniel Kahneman, Thinking, Fast and Slow

Stop categorizing people based on first impressions. Stop generalizing their skills and abilities. Admire what’s good in someone, but don’t let it cloud your judgment when it comes to evaluating them on other parameters.  

Summary 

1. When making a decision, confirmation bias can make you look for information that matches your beliefs while disregarding anything that contradicts it. Not considering information that challenges your viewpoint can lead to bad choices and poor decisions. Ask yourself: Am I seeking what I believe to be true or what challenges my opinion?
2. The Dunning-Kruger effect leads to an assumption that you have the knowledge and the skills to do certain things while you clearly lack in those areas. Turning blind to these gaps can lead to overconfidence, risky behavior and the tendency to dismiss critical feedback. Ask yourself: Am I overestimating what I know and underestimating what I don’t know?
3. When you label people, judge their behavior or stamp their character without considering the situation, context and constraints within which they’re operating, you’re bound to be biased. Fundamental attribution error can create unnecessary conflict, misunderstandings and tension between people. Ask yourself: What circumstances or factors can make someone behave this way?
4. Your brain is inclined to exaggerate negativity while minimizing positive experiences. You imagine the worst-case scenarios, ruminate about failures and over-index on any negative feedback or criticism you received, while ignoring all the progress you have made and the good things you have achieved. Negativity bias can lower your confidence and turn you into a pessimist. Ask yourself: Am I leaning more towards negativity without considering the positive aspects?
5. Just because something is more vivid in your mind does not make it more valuable. Hidden information that’s harder to recall or information that doesn’t register in your mind because it fails to evoke a strong response can be just as useful. Availability bias can make you give more weightage to readily available information while ignoring actual facts and probabilities. Ask yourself: What details have I not taken into account because I don’t remember them?
6. It’s hard to quit and accept failure when you have invested time, energy and money into something. Instead of moving on to better opportunities, you may try to recover the past costs by continuing with a failed cause and putting more energy into it. Irrecoverable sunk costs can make you ignore future opportunities. Ask yourself: What’s more beneficial—continuing with the current investment or quitting and moving on to new opportunities?
7. When estimating a task or a project, being highly optimistic without considering unknowns can lead to poor planning and estimation. You may overpromise and under deliver which can hurt your credibility. Planning fallacy leads to poor estimation skills. Ask yourself: What buffers in this plan will make it more realistic?
8. When someone leaves a good first impression, you may assume they’re good at everything else too. One positive quality can be mistaken and extended to all their traits. This leads to biased evaluations and unfair decisions as halo effect makes you give them undue importance and favor their work. Ask yourself: Have I realistically evaluated this person on the specific quality that’s important to this decision?    

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