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This article was first published in the April 2020 Ireland edition of Accounting and Business magazine.

When we consider our career goals or various employment propositions, it is vital to see ourselves as objectively as possible. Thinking of how cognitive biases influence our decision-making, we often focus on the risk of misconceiving other people. However, it is important to understand that cognitive biases impact how we see ourselves as well. As a result, biased thinking can influence our career choices without us even realising the extent to which it’s happening.

Work is such a significant aspect of our lives that we should be extra cautious in how we make our choices about it. It matters to know what our goals are and why we wish to achieve them, but it is as important to understand how objective and independent we have been in deciding what these goals are. When making important decisions about work, it is helpful to consult with friends, recruiters or career advisers, all of whom are very good sources of information. However, if our choice is to be rational, objective and truly ours, we need to stay alert about how our own thought processes filter that information.

Daniel Kahneman, a Nobel prize winner in economic sciences, together with his long-term collaborator psychologist Amos Tversky, spent their academic careers studying the process of human decision-making. In their paper published in 1974, Judgement under Uncertainty: Heuristics and Biases, the pair discussed three heuristics, or mental shortcuts, that people use to make decisions. They found that these particular heuristics, although helpful to make decisions, can lead to erroneous and biased choices.

The first, the representativeness heuristic, drives people to assume that an individual belongs to a group simply because he or she shares some general characteristics that are commonly associated with that group. Secondly, the availability heuristic impacts on our judgments related to the probability of events. The more easily we can retrieve something from our memory, the more probable this seems to us. Finally, anchoring is a mental shortcut that holds people from making sound estimates once exposed to an initial idea of what the final value might be.

Question your thinking

Kahneman and Tversky did not argue against the human ability to be rational, but their research showed that choosing rationally requires much more than relying on the axiom ‘first thought, best thought’. It is no different when it comes to considering your career. Relying on heuristics can result in walking away from job offers for no valid reason. This includes not applying for the roles because we do not feel representative of people who we think occupy such positions. People who consider careers or jobs that seem to be dominated by individuals of the opposite sex can be particularly vulnerable to this heuristic.

Money matters, and it is important to set the bar high when valuing your work. But it is also important not to stick to an initial idea, that like an anchor, can hold a job seeker down in the search for a better opportunity.

An inability to remain open-minded about your career path can be very damaging also. It is good to look up to our peers for available examples of career progression, but going off the beaten track might be more beneficial when considering your personal goals and circumstances.

In his TED talk ‘How to build a company where the best ideas win’, Ray Dalio, the founder of Bridgewater Associates, one of the largest hedge funds in the world, shared valuable insights on decision-making. In the late 1970s, eight years after he started Bridgewater, Dalio made some poor investment choices and lost much of his and his clients’ money. That painful experience changed his attitude to decision-making. From assuming he was right, Dalio started to ask himself, ‘how do I know I’m right?’ From there he developed the model of ‘an idea meritocracy’, where through ‘radical truthfulness and radical transparency’ the best ideas win. That, he admitted, has been behind the success of his hedge fund for over twenty years.

Asking ‘how do I know I’m right’ works not only for hedge fund managers, but can also improve an individual’s decision-making about work and career choices. As we make a lot of assumptions about what we want in relation to our jobs, and why, it is important to test these ideas to see if they are logical, objective and truly ours. Failing to do so will inevitably result in poor career choices and jobs that never feel ‘right’.

This process mirrors the idea behind Kahneman’s bestselling book, Thinking, Fast and Slow, in which he discusses a phenomenon of ‘focusing illusion’.
He explains it as follows: ‘Nothing in life is as important as you think it is when you are thinking about it.’ Before deciding about your next career move, consider your work in the context of your whole life, including family, friends and interests outside of work, and think long-term.

Focusing illusion might result in overemphasising the significance of some aspects of your employment simply because you have been encouraged to focus on them now. If you think of them more broadly, you might realise that they will not be of much benefit to you at all in the long run.

Urszula Pajdzik ACCA is a group accountant in the media sector.