> Recognizing and Interrupting Unconscious Bias

Where Are You Now?

Here’s a chance to see how you are with common biases that we all experience. Later you’ll have an opportunity to revisit this and see what’s changed

Purpose

  • Identify your biggest bias blind spots and gain awareness for other people’s bias blind spots

    Guidelines

  • Review the the Bias Blind Spots
  • Rate yourself on a scale of Never, Sometimes, Often
  • Scores will total at the bottom

    Self-Assessment


    Statement

    I do that...

    You promise a client a report by the end of the week only to find that it takes you two weeks to complete
    Your investments are outperforming and you take a moment to celebrate your skill as being the main reason
    When you’re on top of your priority tasks you feel like you have control over the performance of your investments
    Your fund’s performance is down and you have a strong feeling that the market is going to comeback sooner rather than later
    It seems like everyone in your investment world is going big into a new type of venture. There must be something to this trend. Not wanting to be left behind, you make investments in this new type of venture too.
    You’re still processing the losses you had from last month when you finished with a down quarter. You’re presented with a promising investment opportunity but you’re just not ready to take the risk
    Your fund’s performance it down and you think it’s due to unfavorable market conditions
    You’ve been making investment decisions in this asset class for a decade. At this point you have a 6th sense about making them. You make your next decision quickly and decisively
    You always think preserve the capital first, worry about gains later. This goes back to your first investment when the company you invested in tanked
    You just landed your biggest investor and you attribute it to your excellent closing skills
    You can trace your risk-aversion stance to investment back to a down year you had years ago
    You’re in a fundraising meeting and the potential investor makes a generalization about your background. Now it’s all you can think about

    Statement

    I do that...

    You’ve been listening to investment pitches all day. The last one was for 10x what you were prepared to invest. This next one is only asking for 5x. You find yourself more interested in this last one even though the returns are potentially much less then the 10x investment, even after accounting for the higher ask.
    You’re considering investing in a company and meet with the CEO who tells your very compelling story of how we started the business in his garage and how the company is poised for expansion and three new markets. You’re taken back by his charisma and the power of his story and you decide to invest.
    The market is tanking and you’re going to lose 30% of your investment. You’re distraught. Later in the day of the meeting another team member states that although the market is tanking you’ll be able to preserve 70% of your investment. Oddly, this makes you feel better.
    You’re growing and you’ve been looking at office spaces for weeks. You just came out of a place that was $10,000 a month. Now you’re looking at a place that’s only $5000 a month. This new place seems like a great deal even though $5000 a month is twice what you wanted to spend.
    You’re considering taking an investment steak in an up-and-coming company in a hot market sector. You sit down in one of the founders as he takes you through his personal journey in the hot market sector. You leave that conversation ready to invest.
    Hit an attempt in an attempt to boost performance you decide to a word award a 5% performance bonus. When you head of HR tells you that this is a 5% potential decrease in relative compensation for those that don’t qualify for the bonus you’re more disturbed then you thought you’d be.
    You’ve been on the search for a new investment analyst. The last person you interviewed had a salary requirement that was 30% more then what do you want to pay. In walks this next candidate he’s only asking for 15% more. You’re ready to hire him after his first interview.

    Statement

    I do that...

    You invest by researching and screening the investments by yourself. One of the investments that you have recently shortlisted is Franklin Mining and you have learned about the bankruptcy of the firm and are considering selling the stock. A few days later a piece of news is published that Franklin Mining is getting help from a sister of the chairman of Franklin and he firm is expected to revive back however you still prefers to avoid the information and look for information which points towards bankruptcy.
    You invest in a company and the company’s value falls, after the fact you believe that you knew along that the company’s value was going to decrease.
    You make an investment and a solid, consistently performing company. When this company intern goes to make an investment in another business you are automatically assume they’ll be successful even though this company has no track record of making investments and other companies.
    You are conducting research on the macro markets. You recently attended a seminar on market views for next year, where you heard a renowned economist who publishes books on the macro market and who stated a few facts like there will be slow growth in the market which was witnessed in 2008, sales will be falling, liquidity crunching cost-cutting by big firms. From this prediction, you created a view that next quarter could see a recession. As a result, you halt all new investments for the next quarter. After a few months, the world bank comes with the data stating that a new trade treaty was signed between the US and China to cut import taxes and welcome globalization further. One of the fund’s investors emails you asking whether you have revised your view? You reply to his email stating that a deal signed doesn’t change the numbers and there has been no progress in the market as far as you see.
    After the last financial crisis, you told friends that all the signs were there and they saw it coming. In reality you had discounted any signs and then treated the market at the time as an ever expanding one.

    Statement

    I do that...

    You’ve installed a new CEO to run a tech firm you’ve invested in. She has a deep background in tech. You feel that the likelihood is that she’ll be a star, even though there are far more average CEOs than stars.
    You are approach your analyst to get her views on a particular company. Before she can share your views, Your share that the company has very good YoY growth. You want to make an investment in this company. However, after hearing you, your analyst shares that the company has begun more aggressive marketing and offering discounts that have increased to 7% from an earlier 5% which could impact their margins. You avoid that information and move forward with the investment.
    GoodGreens fast food was exploring expansion of its operations to India. Your research showed that India is a profitable venture for all fast food chains. Therefore, when GoodGreens announced its plan to explore the Indian market the following year, you wasted no time investing in them. What you missed is that GoodGreens has food that is not appealing to Indian consumers, which further research would have revealed
    An investment you made results in better than expected returns. You proclaim that you had a good feeling that this investment was going to be a winner even though last week you expressed doubt about the investment to a colleague.
    Your analyst tells your story about how at his last firm, the founder made decisions with great success using a different analytical process. This story peaks your interest and you tell the analyst to employ the analytical process for some of your investment decisions.
    Installing a new system and the vendor tells you that it’s 99% reliable. That seems good enough after all it’s a computer system and they’ve been known to be unreliable. Later your head of IT in a briefing meeting tells everybody that the new system will have a failure rate of 1%. You’re alarmed by such a failure rate.

    Review your score for each bias to see how frequently each bias occurs.

    0-2 = Low Occurrence

    5-6 = High Occurrence

    3-4 = Medium Occurrence

    # Bias Score
    1 Overconfidence Bias 6
    2 Self-Serving Bias 4
    3 Herd Mentality 5
    4 Loss Aversion 3
    5 Framing Cognitive Bias 0
    6 Narrative Fallacy 1
    7 Anchoring Bias 5
    8 Confirmation Bias 2
    9 Hindsight Bias 2
    10 Representativeness 0