Emotional Bias in Problem Solving

I was recently speaking with a sharp junior planner, Ajay. He was reviewing the previous quarter's performance and looked completely baffled. "Manish," he began, "our forecast accuracy took a nosedive, yet our statistical models, inputs, and assumptions were consistent with previous cycles. We can't figure out where the process failed." I let his question hang in the air for a moment. It’s a situation many of us have faced. We hunt for errors in the system or the data, but sometimes the root cause is far more human. Instead of diving into the system logs, I asked him a simple question, "Ajay, think back to the consensus meetings over that period. What was the general feeling in the room? Were people confident and optimistic, or were they cautious and concerned?" He paused, and I could see the realization dawning on him. He recalled that following two record-breaking sales months, the entire commercial team was riding a wave of extreme optimism. Their manual overrides to the baseline forecast, he admitted, were unusually aggressive and based more on that positive sentiment than on any new market intelligence. They had fallen victim to what I call the "Sentiment Trap." This is a phenomenon where the collective mood of an organization unconsciously influences key planning decisions. The forecast stops being an objective prediction and instead becomes a mirror, reflecting the organization's hopes and fears. This isn't an isolated incident. Industry analysis often identifies cognitive biases, such as recency bias (overreliance on recent events) and confirmation bias, as a source of 15-20% of total forecast error. The system and process can be perfect, but a biased input will always lead to a flawed output. So, how do we build a shield against this? Here is a practical framework we implemented in a past role to insulate our plan from emotional bias: - Measure Manual Input: We rigorously implemented Forecast Value Add (FVA) analysis. The key was to isolate and measure the accuracy of every single manual override. This wasn't to assign blame, but to create objective data on where human intervention was helping or hurting the forecast. - Create Accountability through Visibility: We developed a simple dashboard that visualized the bias (consistently over or under-forecasting) for each department providing input. When people could see the tangible impact of their sentiment-driven changes, the quality of their input improved dramatically. - Appoint a Neutral Challenger: In our S&OP meetings, we designated a rotating role of "data advocate." This person's sole responsibility was to challenge assumptions that weren't backed by data, forcing everyone to ground their arguments in facts, not feelings. Our supply chains are complex systems, but they are managed by people. The ultimate challenge in demand and supply planning isn't just about adopting the best technology, but also about acknowledging and managing our own human element.

I've seen brilliant executives make terrible decisions because they couldn't separate their viewpoints from objective reality. Emotional reaction to information is not the same as a rational assessment of it. When leaders approach a problem with their conclusion already formed, they're not analyzing. They're just looking for confirmation. These emotion-driven reactions play out constantly in discussions about market direction and political impacts. A leader who strongly dislikes a political figure might dismiss economic data this political figure shares, searching instead for validation of their own position. That’s intellectual laziness. Strong leaders create separation between emotions and analysis. They recognize when an issue has become dogma and deliberately challenge their own thinking. The most effective decision-makers I know respond to contradictory information with curiosity instead of defensiveness. They ask, "What am I missing?" instead of "Why is this wrong?" That thought process ultimately gives them a competitive advantage. Leaders who process conflicting viewpoints objectively make better predictions and avoid the expensive mistakes that come from confirmation bias. A leader’s job isn't to have the right answer from the start. It's to get to the right answer, no matter where they began.

Here are just some examples from my career where emotions threatened to overrule the bid / no bid decision-making process: Overenthusiasm ”This client is too big to pass up! It’s a strategic deal." Fear of Missing Out (FOMO)  "If we don't bid, we won’t be invited next time." Desperation Bidding "We lost last time; we have to win this one!" Relationship Bias ”I promised my client we would bid this and I’ll look bad if we don’t.” Sunk Cost Fallacy "We’ve already spent so much time on this opportunity, it would be a waste not to finish and submit." Gamblers Fallacy ”OK, we only have a 5% chance of winning this bid but that’s 5% more than if we didn’t.” False Cause “We won the last bid with a similar client in this sector. We can just use the same bid again.” Delusional Optimism ”We know we can’t deliver it but, if we win, it’ll be a nice problem to have.” Overhyped ”It’s a must-win.” Robust processes and supportive technology can help mitigate some of these hijacks but we still need decision makers to behave objectively and rationally. #Proposals #BidTech #BidNoBid #BidGeek

🧠 Mood-Congruent Memory Bias 🧠 We tend to recall memories that align with our current mood. It's easier to remember positive experiences, and when we're in a bad mood, we're more likely to recall negative ones. This bias affects how we interpret our past, perceive our present, and make decisions about our future. --- When I think about this bias, I think beyond my mood or the mood of a single person. Something that plays a large role in overall team health is our team’s mood. Something I think about a lot is how outside pressures can impact how a team works. Teams can work really well together on their own, but sometimes things like economic pressures, the stock market, even senior leadership, or other adjacent teams can play a role in our team’s mood. --- Back when I was working for a giant corporation there was just so much outside pressure. The stock price was always super important to leadership. There was this mantra that we’d hear all the time “$2 earnings per share.” This was a target the executive board was trying to get the company to hit. I still have no idea how that was supposed to help a software team build better software, but the result was we were stressed out. This stress impacted not just the mental health of our team, but the overall ability to plan effectively. Thinking about this bias, when it came to how we planned for future releases this played a huge role in how willing we were to take risks. When we were under so much stress, all we could think about was stressful situations in the past and how leadership would get upset about one thing or another. The result was a team unwilling to take risks, and our overall creativity suffered. The end product was worse for it. Ironically in the case of enterprise software, crappy software led to poor user experience which lead to longer time on task and inefficiencies that guess what? This led to missing that $2 earnings per share target. Go figure. 🤷 --- 🎯 Here are some key takeaways 1️⃣ Monitor team mood: Be mindful of the team's overall mood when scheduling meetings that require reflective thinking or strategic planning. 2️⃣ Train everyone's emotional intelligence: Emotional intelligence workshops can equip the team with skills to recognize and manage our emotions more effectively. 3️⃣ Encourage perspective-taking: Train team members to consider situations from other’s perspectives, especially during times of high stress or pressure. This can foster empathy and understanding. 4️⃣ Monitor workload and stress levels: High stress can exacerbate negative moods, making this bias more pronounced and negatively affecting the team. 5️⃣ Encourage team building activities: Regular activities that foster positive experiences can create a kind of reservoir of positive memories for team members to draw from during challenging times. #UXdesign #ProductManagement #CognitiveBias Check the comments for a link to explore the history of this bias and more!

Stop treating your prospects like calculators. I learned this lesson painfully while leading the launch of a new solution for a healthcare transformation organization. The CEO and SVP of Product Innovation were well-intentioned, but they had biases that fueled their convictions. “Show them the science and ROI. Once they see the data, they’ll switch,” said the CEO. “They’ll switch?” I asked curiously. They rarely switched for the logic. They often resisted because we didn’t understand the emotion that tied them to maintaining the status quo. Most B2B marketers still build journeys on the idea that buyers only care about features, scientific studies, and ROI models. But real people buy with their hearts as much as their heads. LinkedIn's B2B Institute found that emotional factors significantly influence B2B buying decisions, accounting for 66%, while rational factors account for the remaining 34%. When you act like every decision is a math problem, you miss the emotional needs and biases that drive action. Fear of missing out. Desire for security. The endorsement of a trusted referral. Those feelings tip the scales long before spreadsheets ever come out. Three quick shifts to make your GTM more human: 💡 Map emotions, not just touchpoints. Ask: What’s the buyer afraid of at each stage? What small win can calm that fear? Use stories to build trust. 💡 Data is important. But a 2-minute customer story about real struggle and success sticks far longer. 💡 Frame decisions around loss-aversion. “Don’t lose your edge” often lands harder than “gain more efficiency.” When you blend hard facts with a genuine understanding of how people feel, you’ll see faster decisions and deeper loyalty. Takeaway: Your next user journey should start with these questions: ✔️ “How do we show up in our customers' struggles? ✔️ "Do they see us as relevant?” ✔️ Can they see their lives as being better because of our help? Build from there. #businessgrowth #GTM #buyerjourney #CMO