OPINION29 March 2016

Don’t let human biases undermine your business relationships

Behavioural science Opinion UK

Very few people argue with the good sense of establishing and nurturing longer-term, fully functioning business relationships, however, pursuing optimal collaborations can often lag behind the received wisdom. By Paul Tredwell


It is rare for businesses to cease trading simply because their relationships come up short, of course. In truth, as a consultant in relationship enhancement, I cannot promise to deliver the instant, spectacular impact of a paramedic, a firefighter or a superhero. Well, not every time anyway.

But relationships are not ‘nice-to-haves’ in the commercial world. They are measurable levers which powerfully enable and underpin effective business interaction. And they need constant, careful attention for all parties genuinely to enjoy the best of each other.

So, how do decisions on relationship management sometimes become relegated to the ‘I hear you but not now’ category? Or worse, how are they only confronted when fractures appear in the foundations of key alliances?

Increasingly we are being made aware of how human cognitive biases can influence such decision making. They can take the form of action-orientated biases like over confidence where we embellish our skill level relative to others and consequently our ability to affect future outcomes.

Similar biases can relate to perceiving or judging alternatives. For example, there is confirmation bias where we place extra value on evidence consistent with a favoured belief, failing to search impartially for evidence.

There are also stability biases, like present bias where we prize immediate rewards very highly and undervalue long-term gains. This is celebrated by chocolate bar manufacturers the world over.

All of these factors can sap the motivation to consider important commercial relationships in the round and to seek a credible outside view.

The underlying issue here was well summarised in a pertinent Harvard Business Review (HBR) article from last year: “All too often we allow our intuitions or emotions to go unchecked by analysis and deliberation, resulting in poor decisions.”

Citing Daniel Kahneman’s book Thinking Fast and Slow, the HBR piece both acknowledges the importance of System 1 thinking (fast and emotional) and stresses the dangers of relying too heavily on this mode to the detriment of slower, more logical mental processing defined by Kahneman as System 2 thinking.

This begs the question of how to engage System 2 in decisions pertinent to relationship management. Again there are pointers in the HBR piece, some based on the concept of choice architecture introduced by Thaler and Sunstein in their best-selling work Nudge: Improving Decisions about Health, Wealth and Happiness.  Specifically, we can improve decision-making by upgrading the processes by which information and options are presented to us – for example, by creating space for reflection and inspiring broader thinking, to include the consideration of dis-confirming evidence.

Building on this, my experience tells me that gaining a balanced, realistic view of the future, embracing the personal and professional needs of business associates, often leading to a shared sense of purpose, is vital to the success of longer-term, mutually valuable relationships.

Enlightened organisations increasingly manage their important internal and external relationships with an eye on the future and include this activity within the realms of strategic planning. The importance of day-to-day delivery is not diminished, just the risk of being caught out by tomorrow.

With this outlook we don’t ignore our short-term emotions but we do keep them in perspective. We don’t let them rule us.

We are in an overwhelmed economy where, more than ever before, we are tired, stressed and spinning plates. In these pressurised times, don’t be a victim of your biases. Take the time to outsmart them. It will be worth it to get the most from your business relationships.

Paul Tredwell is director of Bigfoot Consulting