Making Your Mind Up: Decision-making, Cognitive Biases, and Choices, as a Solopreneur

Speaker 1: 0:37

Just me this week doing stuff on my own, because that's what we do, right, after all. You're listening to the Future is Freelance podcast, which is the show for solopreneurs, digital nomads, slow-mads, consultants, remote workers, e-residents and people living a life without traditional boundaries. We're here for everyone who defies categorisation and makes a living and a life their own way. Every Freelance Friday, we bring you expert tips, inspired insights and stories from the frontiers of freelancing to help you achieve success with your borderless business, whatever success means and looks like to you as you live life on your own terms. So I really appreciate you listening to the Future is Freelance and being part of the Future of Work revolution. And this week I want to talk to you about something maybe a little bit more revolutionary than some other topics, because it's all about how we make decisions and, of course, when we're freelancers, we're solopreneurs. That's up to us. It's quite a difficult thing to get our heads around sometimes particularly if, like me, you're a refugee from an employed, more corporate situation that suddenly you don't have to account for your decisions to a manager or a board of directors or investors or anybody else. It's just you and your objectives, and that's wonderful, right? That might be the reason that you're in business for yourself to start with, but of course, with everything that can bring risks that can mean that we remove some of the checks and balances that typically accompany making good decisions. So I wanted to talk a little bit about that today, in particular, something called confirmation bias. Now we think we make logical, evidence-based decisions. Of course we do right, especially when it comes to our business. We wouldn't do anything else. We certainly wouldn't let our emotions get involved. We wouldn't let that override common sense. We wouldn't make a decision and then seek to justify it afterwards. Right, you know you wouldn't do that, but the truth is we all do. We are all subject to confirmation bias. To be honest, if we didn't have these kind of cognitive biases going on in our life, we'd never be able to make a decision anyway. We have way too many decisions to make. We have far too much sensory input. We have far too much information and evidence coming at us all the time for us to consider it all. The problem is when we kid ourselves that we've done so, and we do that hundreds of times a day, every time we decide what pen to pick up off a messy desk, what bag of beans to buy in the supermarket or all these little low-stakes decisions. We don't weigh up all the evidence. We go with habit, we go with repetition, we go with easy recognition, we go with something straightforward, and when we're making a higher-stakes decision relating to our business, we are subject to the same kinds of biases, like confirmation bias. If we decide that we want to do something, to go somewhere, to make an investment, say in a cool new bit of tech or an event that we really fancy going to, we have this thing called confirmation bias, where we will look for evidence to support the decision we want to make. Even while we think we're examining that decision, we're not examining it in a fair way. We're actually looking for facts and ideas and opportunities to support what we already want to do. This is simply how our minds work. This is how we're guided towards the decisions that we make. We cannot pay attention to everything all of the time, otherwise our heads would explode or something. There's simply too much out there. So we look for things that reinforce what we already want. We notice things that we wouldn't have noticed before if we weren't looking for them. There's a really interesting cognitive bias that supports this, called the Bardermainhof syndrome. Bardermainhof sounds like it's some Austrian sociologist from the 19th century or something, but it isn't. It's actually a small town where this situation was first described, probably by somebody with a very boring name, but it was about a news event, something that happened in this tiny town. Then the person who first described this phenomenon noticed that event being mentioned somewhere else, hearing the name of this town again, which I'd never heard of before, in recognizing it from this earlier incident, and then realizing that they'd started to look out for that. This is what can happen when you're making a decision as well. If you're looking for a new car and somebody says, oh, have you thought about a certain model that you've never really heard of? Maybe you're not even sure what they look like Then suddenly you realize there's one parked just down your road, or you're behind one at the traffic lights and you've never thought about them or looked for it before. But actually they're everywhere. And of course they're not suddenly everywhere. They've always been there, but you haven't noticed them because they've not been a live issue for you, it's not been part of your decision-making matrix, you've not looked for it and so it hasn't intruded on your consciousness. And this is a good example confirmation bias and the Bardermine-Hoff syndrome in action, and why it's really important to examine the way we make decisions and make sure that we're aware of these facts and that we can mitigate their role in potentially leading us down the wrong path. This is because in freelancing, we're not talking to people about what car we should buy or what laptop we should buy, or whether we should go to that expensive event, or whether we should go after this shiny project and let down this regular client who's a bit boring. We love being our own boss. This is why we are in freelancing. This is why we're solopreneurs. We have that potential to go after that shiny thing, completely change direction. We don't have to follow anybody else's business plan or corporate objectives and we have that potential for unlimited growth and income and excitement and enjoyment. We simply have to recognize that this is double-edged and we have to make sure that we're still making good decisions despite that unlimited potential. So we've talked about confirmation bias a little bit and it's easy to see how that can lead freelancers astray. There are real life stories from my own life where I've gone after things and done something because I wanted to, because in 2017, I think it was. I thought the world really needed a novel about Bitcoin and feminism and I really enjoyed writing it and the people that read it gave me some amazing feedback. I had some lovely feedback and reviews, but it was not a commercial success. I'll be the first to admit that I even invested in artwork and professional layout for it, because there were reasons I wanted it done really well and it's probably even now made a loss because it spoke to such a specific time in geopolitics and the development of cryptocurrencies, and I loved writing it and I'm still very proud of it. But business decision not so much. So if I'd had a board of directors or a line manager to be accountable to, they might have said really, is this the best use of your time, of your resources, to write this thing and publish it yourself? Maybe I wouldn't have listened to them, but this is an example of sometimes you can do with an alternative perspective on it. I'm not saying I wouldn't have done it Another time. A couple of years ago, I decided to set up a Facebook group for people who enjoy remote work, particularly in Spain, where I live, because it seemed to me that there was a community that wasn't really being addressed there and wasn't really being joined up. I'll bring them together on Facebook. That's where everybody is. Set it and forget it, at least for a while, and suddenly it all started to tip and the rest is history. I know that a lot of people listening here now are members of the remote work Spain and the broader remote work Europe community, and that was a decision I made. To do that in the first place, in perfect Honestly. You've got a great deal of conscious planning or sort of trying to speculate on what the outcome could be, because it was a pretty low stakes decision at the time and it turned out to be right. So sometimes decisions that we make in the spur of the moment, however unexamined, can lead us the right way, but we do need to ideally try and do a better job of it, if only not to create full sense of security or a full sense of urgency when none exists, and not to let anybody else create those things for us either. The full sense of urgency is a very welcome technique if people are trying to sell you something you know they'll often be. Oh, to take advantage of this offer. The clock is running. These are things that you can look for and be aware of, to step back from and say, actually I want to take a little bit more time. And if you recognize these things going on in your life, if there seem to be a lack of controls or checks, then you can definitely use that as an indicator that you might not be in the best decision making environment. So you have to try to avoid the echo chamber of your own head, the danger of being over confident, and find ways to question your own decisions before you make them, and not simply reinforce things through confirmation bias, because that can lead to regret. It can lead to real trouble in the long run. You know, when we're in business on our own, we can make decisions which cost us and they might satisfy a long time. They can even damage people's business irreparably. So how can we understand then? How can we overcome these cognitive biases? I think the first thing is to recognize that we all have them and just because we know about them, they're still out there. We have to educate ourselves about this tendency to make emotional decisions. We can examine decision making frameworks and models. If we've got a choice to make, that we can decide to use things which some of these have been around a long time in the corporate world like there can be circumstances we're doing. A good old fashioned SWOT analysis can be really helpful. Remember those where you divide a matrix of four and you list out what are the strengths, what advantages do you have in one quadrant. Then look at weaknesses what are the challenges you might face and the things that you will need to overcome. Those are the things that are intrinsic to you. Then, for opportunities, what favorable circumstances can you capitalize on? What trends, what like guys, what movements and threats? Alternatively, on the other side, what things on the external horizon could harm your progress, could make this a bad decision in the long run? What might stop things turning out the way that you obviously hoping and intending that they will? So SWOT analysis can be a helpful tool to making good decisions. Sometimes it's more qualitative than that and you're trying to get at something that might not be easy to express, or you know that there might be deeper reasons for what you want to do and in this case the five wise technique can be helpful, because if somebody asked you why you want to do something, you can often give a quite superficial, throwaway answer. Why do you want to start a podcast? Well, I want to talk to people. I want to show what I've learned about freelancing, about working for yourself, about making good choices. Yes, but why do you want to do that? Well, because freelancers are my people. I want to help more people enjoy the freedom and flexibility and location independence that I have, and I think a podcast is a good way to do that. Why should more people want to enjoy that? Well, because I believe that's the future. The future of work is going to be people choosing their roles and defining their place in the world and taking that work with them when they want to move around. Why is that the future? And the deeper you go I mean, this is called the five wise technique, but that five isn't a magic number. You might find that it takes you 10 to really get to the heart of it, or you might find that you've generated enough understanding at a lower level, but simply getting beyond that first kind of. Well, you know, this is the quick answer, the elevator pitch, the over justification for whatever I think I want to do. Why is that important? Why is the answer that you gave what underlies that is a way of really getting at the core issues rather than just the symptoms on the surface, and that can help you to examine any high stakes decision that you're going to make, particularly if it's a pivot to do something new. Of course, most decisions that we make that they tend to be something that if you choose one thing, you give up something else. You have an opportunity, cost you open one door, you close a door behind you. Some doors might be two way, so might be sliding doors. There's also the metaphors we could bring in here, but for those parts, choosing one thing, deciding one thing, closes down other options and therefore we can do something called cost benefit analysis. We can look at the direct cost of doing something versus the risks that it exposes us to and what other options we shut down, and that can help in understanding whether a decision is actually going to be beneficial for your business in the long run, particularly when it comes to the bottom line. If you decide right, I really want to buy this house, but there's a part of me that's always wanted to be a bit of a digital nomad and maybe go more traveling in the next few years. Will this tie me down? Will it still be a great investment? And I can let it out. These are the kind of things that you can weigh up as costs and benefits, which one ultimately is going to serve you in the long run. Sometimes, of course, there'll be lots of factors involved in the decision and you find it quite hard to choose. One example might be deciding that you're going to work with a virtual assistant and you Interviewed five wonderful virtual assistants and they're all bringing different things to the table. There's some you really like, communicate well with. Others have got different skills, different personalities, different availabilities. One of them might be a more competitive rate than another. All of these things, and really you'd like to hire all five of them, but you haven't got the budget or the work to justify that. So somehow you've got to choose between them. Listing out those factors in a matrix, deciding are they equal in strengths you know is Actually is being great to work with the most important things. You're going to get that double waiting and so on and trying to put a score Against all of those different elements. Then you can simply added up and see, at the end of, the perfect person to work with is, in fact, candidates see. And even if you don't decide to hire candidates, see, simply acknowledging your reaction to that outcome, and if there's some visceral reason why I actually oh gosh, no, I didn't want it to be C then at least you know that you're making a decision based on something and you've given yourself this external way of looking at it, which is what all of this is about. It's about challenging your thinking and giving you new ways of looking at it. You can challenge your thinking in a more reflective way. Of course, set aside time to do a regular retrospective with yourself this is something that comes from the agile software world, but it's a much older management technique than that just to try and have a bit of a wash up and a look back when we get to the end of a project or when we're looking back on the consequences of a decision. Sometimes we just want to move on, and particularly if it was something that maybe we regretted or we thought could have gone better or we could have made better choices, we have a very recognizable and understandable instinct to just back away from it and say, all right, moving on from that, I'll do better next time. But actually, sometimes the one positive thing we can salvage from those situations that we might have a little bit of regret about is to take a tiny bit longer and just reflect and learn something from them. To distill that learning, we know what went wrong. We don't need to talk about that. Yes, but we need to talk about how this could go wrong again, how the factors that led to this happening could be replicated in other situations, how we could actually use what happened to our advantage. Then it's easier to move on actually. Then we can put things to one side. If we just do that, what could be improved? What would I do differently next time? Lay it to rest and then take that with you into your next stage of life, into your next decision. Sometimes we have to sort of argue with ourselves in our heads just to make ourselves do this. Sometimes you have to be a kind of devil's advocate role within your own head. Imagine you can personify this devil, if you like. It might be a manager you used to work with or somebody you had a personal relationship with, who would always argue. Think about what would they say, how would they pick holes, how would they undermine you, and you can use their imagined responses to strengthen your own position, to justify, to unpick anything that might be loose or woolly or malformed about your thinking, but because there isn't that person sat in front of you, it doesn't matter if they do actually change your mind and lead you to reexamine some aspect of your decision or your plan and decide. Actually, maybe this challenge has helped me change something or tighten something, sharpen up a response which I wouldn't have had otherwise. It can just basically help identify any potential flaws or weaknesses in your thinking, which can help you make a stronger decision and actually make a better decision as well. Now, of course, even if you are a freelancer, even if you're completely solo and you feel like nobody in your life really knows what you do for a living, you can still ask for feedback from other people. We all have trusted peers or mentors. We have people who care about us. They might not be embedded in what we do, but they can see that something's weighing on our mind, and sometimes you can just say to your partner or a friend or somebody can I just run this by you to gain a perspective from somebody who might be a potential customer or user or somebody who knows the effect that this is having on me or whatever, and don't be afraid to ask for help. Sometimes we choose to work as freelancers because we love it that independence and that solo operation. But sometimes we do need another perspective and it's important to pull that in because we can't do it all on our own, however reflective we try to be. One reflection exercise which can also work well is journaling writing things out. I'm a writer. I still journal every day. No one's paying me to do that, but it's paying me directly in terms of figuring out my priorities. I find it particularly useful to look back on how I decided things, and I try to make myself journal, not about what's happening, but why, what I'm thinking and how I'm reacting, because I know that I find that the most insightful If I come to look back on a period of my life and sometimes I'm writing as a note to my future self that I'm making a decision between these two factors. In a year's time I can't wait to see how this played out. But what's most useful when you look back on journaling is to find the patterns. Why do I always step back on that big one? What is it that makes me want to jump in on certain kinds of opportunity? What happens when I take a little bit longer to reflect on something? These are the things that journaling can help unpack for you, and you can ask yourself deliberate questions before you jump in on anything. Think about your long term goals. Some people are very, very clear about their mission, their vision, what they want to do, where they want their business and their life to be in five years time. If you know that, great. I'm not saying that everybody has this, but if you're clear about your long term goals, then that's one of the most important things to examine your decision making against and just see if it's a line. Is it going in the right direction? Is it parallel? Is it actually taking you away from this and is that, therefore, the cost benefit analysis going to be worth it? Have you considered all the risks, all the potential rewards? This is again, is cost benefit. In business, we always have to deal with a certain amount of risk. When we look at those threats and opportunities, we're speculating. We don't know exactly what the wider world is going to bring to us in terms of the economy and geopolitics and technology and so many shifts. All of these things might threaten what we do or they might accelerate and reward what we do. We have to try and figure out between us what are the worst case scenarios the best case scenarios? Have I gamed all this out? Would a worst case scenario be a mild regret or would it be catastrophic? Would it be bankrupting, or could a potential best case scenario actually be life changing? So these are all things that you need to play out in your head and know that you've done so, that it's okay to actually look the worst and the best in the face. Think about what that would look like, how you would feel about it and how future you would look at this decision point when it comes to being that retrospective in the future. Above all, all of this decision making stuff is about trying to reduce the dependence on emotion. You can't replace emotion with logic 100%, because we're emotional creatures. This is part of who we are. This is why people hire us to do business with us freelancers. It's because of our perspective as humans. There's an awful lot of work that's now getting outsourced to different kinds of robots and automations, but anything you're getting hired for now, it's because of your humanity and we can't remove that from our decision making, nor should we seek to. But we do need to acknowledge to ourselves if we're making a decision based on emotions or logic, because the one thing we don't want to do is make the decision based on emotions and then seek logic to justify it, because that can all too often happen. You decide you're going to, I'm going to go to this expensive conference because obviously it's going to be great for my business and I really want to go there. But it's in a country I've always wanted to visit and there's going to be such a cool person there who I might want to meet. Is that cool person actually going to advance my career or give me new opportunities, or have I just always wanted to hang out with them? Sometimes we have to really unpick the logic and make sure we're not using it simply to justify that emotional decision. We can accept our emotions, we can embrace them, but to do that, first of all we have to acknowledge their role in choosing what we do, and that can mean finding a second opinion, finding a third opinion, generating them yourselves, if you really need that counterfactual to cross examine yourself against. It means, as we said, looking at the possible worst case scenarios and deciding is there any way you can mitigate those risks? Well, actually, if I go down this path, it has a risk of completely destroying my business. So can I somehow ensure against that? Can I hedge against it? Is there anything I can do to reduce the risk, even if it doesn't increase the potential upside? Make sure I'm not kidding myself about oh well, that's never going to happen anyway, so I don't need to worry about it. That could be really dangerous. So it's important that you examine all of the possible outcomes and not just even though we want to go blindly down our path and be optimistic and be positive and all of the things people say be brave, be courageous. In business, it's really not smart to believe that the worst cannot happen or it will definitely not happen Again. It's all about overcoming that confirmation bias, making sure we're seeing all aspects of a decision, not just the bits that we really want to see. To do this we have to make sure we give ourselves time as well. Of course there are sometimes time constraints when we're making a decision in business, but sometimes we put that time pressure on ourselves or we allow ourselves to be manipulated by circumstance, by a sales process, by some kind of false sense of competition. Often there is less scarcity in a situation. We think oh, I've got to get that proposal in for this massive project because otherwise other people are going to get there first. Well, actually, the potential client is probably waiting until the deadline that they have published, and they do want to consider all the proposals they get, and you can do a better job if you don't rush and you really think it through, rather than trying to be the first one in their inbox because, at the end of the day, that feels important but it's not so. Part of making these good decisions is really trying to take all of those emotions out of it and be really logical by incorporating these expanded ideas and all these thinking models. Then freelancers can equip themselves with robust tools and we can all make more informed and more rational decisions, even if we're operating completely on our own and we don't have anybody else to talk to about making them. However, it's important before we wrap up that we think just remember that you can get external help with this. Some decisions are just too big, too high stakes, or you don't have enough information, or it's just too vulnerable for you that you really need some external support. One of those options might be working with a coach, a business coach or a mentor. Now, this can be something that can be extremely helpful to you. I don't do one-on-one coaching any longer, but lots of extremely good people do, and often the coaches that seem to have the most success and the people that I regularly refer people to are those who are very focused on particular situations and niche challenges, whether that's finding a particular kind of job, making a particular transition, moving a business from one level to another, not starting from scratch, but a very particular aspect of transformation that people are seeking in their personal or their business lives. These are the coaches that get results. And I can't tell you how to choose a coach, because often it's very personal, but I would say make sure it's somebody who's got results in the area that you need, often by their lived experience. There's somebody who's been through that transformation themselves, who you feel that you can work with, who you have a good emotional connection with, who you're prepared to listen to and who you Not so much that you want to please, but you want to collaborate with, you trust their advice and you want them holding you accountable. Then it can be extremely powerful, and choosing well is the most important part of contracting a coach. It's not therapy, it's not being in a relationship. It's a very specific intervention designed to get particular results and you are the customer in that situation. So finding the right coach can make an incredible difference. Finding a group of peers can also make a difference. A mastermind group can be extremely powerful, where you get together on a regular basis with a group of people who can help hold you accountable to changes you want to make, but can also be somewhere to bounce those ideas around. Often it will be people who are not even necessarily in the same industry as you, but they might be facing some of the same kind of choices at a similar kind of level which direction to go in, what to prioritize, and so on. The idea is that you meet regularly and you share and you might need to share quite formally in terms of a non-disclosure agreement, so things like that so you can be really open with one another and really support each other and be that kind of non-exec board for one another where you can bring in those alternative perspectives. You haven't got any stake in their business. You're not a shareholder, you're not an employee, you're not a customer. You're really external and just trying to be there to help them make the right decision, and they can do the same for you and you can also then hold each other accountable for actually seeing the actions through from those decisions as well, which can be extremely helpful. So this is something that I want to come back to in the remote work Europe community and look at ways of helping people to find the right mastermind groups to really lift them up to the next level. And it's a really powerful thing. If you can get it right In broader communities as well, you can learn a lot. You can get good input for decision making. This is something that's managing the remote work Spain group for two years has really taught me. It's been very powerful to learn that Sometimes the individuals in the crowd don't always have the best answers, but collectively, crowds can be really smart. There is that kind of marketplace of prediction whereby if you ask the right questions in the right community, you get enough responses and conversation going and input from different people that what can come out of it is actually pretty good, and so being part of the right communities, wherever you find them, can be very powerful, and I would only say being part of a community, just as being part of a mastermind, is very much about as much about what you give as what you get, so you can bring your own experiences to bear, you can help other people, you can pay it forward and then hopefully, that community will be there for you when you need their input, and you need to just balance other people's ideas with your personal intuition and make sure that you're still choosing well, wherever those inputs are coming from. Don't dismiss something just because it comes from a source that doesn't feel that it's someone you would have chosen. If somebody chips in, you, put your question out there in public in a community you don't know who's going to weigh in. It might not always be what you want to hear, but try to avoid the instinct to immediately dismiss it if it doesn't resonate, because it might be something you want to come back to and read another day. I think actually, yeah, there might be something in that. So, in conclusion, then, I just wanted to make this episode because I feel that making good decisions is part of our professional practices, freelancers. It's part of our awareness and our continuous learning and doing our job better as we go along and becoming better at what we do. I think it's really important that, however independent we get, have every experience to get, however deep down our rabbit hole of expertise we go, we never stop challenging our biases, we never stop seeking diverse perspectives, we never stop seeking new sources of information, because all of these things can help keep us aligned with what we want to achieve in the first place, our own higher good goals that we set for ourselves personally and professionally. We're never too good to not learn from other people. And as a closing thought, then, I'm really interested to know what you think about this episode, of what you think about these challenges to making good decisions. If you have stories that you want to share with me, you're welcome to do so anonymously. We have a voicemail on the website at futures freelance dot xyz. If you want to submit a voice note for inclusion in another episode, you can tweet me. You can connect with me on linkedin. You can come and join the remote work, your communities. If you don't have that community around you for good decision making that, I really Add you to get in touch and be part of that going forward and realize that you're not alone, because the future is freelance. We know that we're all part of this future. Of what revolution. The fact that you've listened Half an hour of podcast all about how to make good decisions means that you care about doing this well for yourself, that you don't want to go back into a corporate environment where People make decisions for you depending on where they are in a hierarchical ladder. You're an independent thinker, you're a seller printer, you've got it going on and you deserve to have the support and the resources that you need to make decisions well and to thrive and grow in your business so that you create a business that supports the life you want to lead. I really appreciate you taking the time to listen today. If you find this helpful, please share it with somebody you know and I look forward to seeing you same time next week. Thank you for listening to the future is freelance podcast. We appreciate your time and attention in a busy world and you're busy freelance life. If you enjoyed this episode, please share it with a fellow freelancer and help us grow this movement of independent entrepreneurs. If you write and review the future is freelance in whichever app you're listening to right now, it really helps spread the word and that means we can reach more people who need to hear this message. Together, we can change the world and make sure the future is freelance. Don't forget you can check out all our back episodes from other seasons and learn more over at future is freelance dot xyz. We're so grateful not only for our listeners, but for the contributions of our wonderful guests and for the production and marketing assistance of coffee like media. This is my middle miss, wishing you freelance freedom and happiness until our next show.