Conventional frameworks or decision-making processes are well suited in tradicional contexts. In high-uncertainty contexts we need different tools to compensate for three cognitive and emotional biases that can lethally distort decision making.
The confirmation bias leads people to embrace new information that reinforces (confirms) their existing assumptions and to reject information that challenges them. Not so bad in an existing business, where your initial assumptions have a good shot at being on the right track, but dangerous in a new business where you’re not yet clear on what you are doing.
The recency bias and human cognitive limits lead us to forget that we made assumptions in the first place, making it nearly impossible to learn from our unfolding experiences.
The winners’ curse causes us to overvalue winning in a competitive situation, even to the point that the price we’ll pay vastly exceeds the value of the prize.
Even worse than individual biases are the social and political processes that effectively inhibit organizational learning. Some ventures from the start-up scene are victims of their own theater. Blog articles, competitions awards, all that hype reinforce the success of an idea. It became harder and harder to disengage the project or change directions.