When I think about leaders in general and CEOs in particular, I think of personal abilities such as leadership, coaching & team building, motivation, and numerous others. These are all topics that have countless books on the subject. There are other important traits for leaders that seem to get less coverage. One of those, at least in my opinion, is decision making.
Sure, it is easy to find a decision-making books. And of course, there are a few books out there that have made it mainstream. But my personal perception is that there isn’t as much coverage of decision making as it relates to a skill that can be developed and honed.
In this multi-part series, I am going to address just one aspect of improving your ability to make decisions: recognizing and reducing the effects of cognitive biases in decision making.
This skill will help you be a much more effective leader when it comes to succeeding in business.
What is a cognitive bias? Wikipedia describes a cognitive bias as a systematic pattern of deviation from norm or rationality in judgment. The concept here is that a bias develops because people will develop personal constructions of reality based on their own and others’ perceptions and experiences.
Let’s learn about the status quo bias.
This is a textbook example of the status quo bias and is perhaps the most widespread bias I come across when working with owners of small- to medium-sized businesses. Perhaps self-explanatory but the status quo bias is the tendency to choose options or solutions that are most similar to how it is now. As I will describe later, the status quo bias can be caused by a few different underlying biases.
You can contact us here:
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📧 nmclean@fourpillarsinvestors.com
🔎🔎 More about Nick McLean from Four Pillars:
Background: Operations management with an emphasis on Lean manufacturing; strategy development and execution; and mergers and acquisitions (M&A).
Which of the Four Pillars does Nick identify most closely with? ''Servant leadership. I consider one of the primary roles of a manager/leader to be to help those around you be more successful and to develop as individuals. When I think of myself as a leader, I am more interested in granting and sharing authority than hoarding it.''
🏛️ More About FOUR PILLARS:
Four Pillars is a company built on a strong foundation of shared values and a commitment to long-term ownership of small businesses. Their approach is centered on purchasing and operating these businesses while providing support and collaboration without becoming a burden. They work closely with company management, aiming for shared success and sustainable growth.
Guided by their core values, Four Pillars views success as a journey filled with challenges and opportunities. Their values serve as a compass to navigate difficult decisions, whether they pertain to ethics, strategy, operations, or new challenges. They are relentless advocates for the common good, ensuring that every decision is made in the best interests of their portfolio companies and investment partners.
Four Pillars stands out with their creative positioning approach, employing informed and agile strategic planning to leverage the unique strengths and advantages of each company they invest in. They capitalize on key differentiators and foster an entrepreneurial spirit within their team and the companies they serve.
As entrepreneurs themselves, Four Pillars connects deeply with the businesses they work with, offering a balanced perspective and the tenacity needed for success. They are known for their integrity, hard work, and relentless drive to identify opportunities and drive growth. This makes them an ideal investment partner for businesses seeking to excel.
The company's ability and agility are evident in their swift and purposeful actions. They streamline the transactional process while maintaining operational precision, drawing on their experience in both healthy and distressed markets. Their track record speaks to their confidence and precision in executing various deal types, establishing them as leading investors for companies seeking to capitalize on their momentum.
Four Pillars' values, or pillars, guide their personal and professional decisions. The first pillar emphasizes the importance of strong relationships as the cornerstone of success, built on trust and a commitment to doing what is promised. They challenge the status quo with a critical and objective approach, identifying areas for improvement while recognizing and preserving what works well. Servant leadership is central to their philosophy, with a focus on teamwork, collaboration, and shared decision-making. Lastly, persistence defines their character, driving them to overcome obstacles, close deals, and manage businesses for long-term success.
