Dec 4, 2023 · 22m · founders-journal
13 Dangerous Psychological Biases
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In this episode of Founder's Journal, Alex Lieberman explores 13 essential psychological biases derived from Charlie Munger's mental models, translating cognitive tendencies into actionable lessons for executive decision-making, hiring, and organizational leadership.
Statements from this episode (16)
Lieberman: Avoiding stupidity is easier and more effective than seeking brilliance
“It says that avoiding stupidity is easier than seeking brilliance, and Munger has famously said, all I want to know is where I'm going to die, so I'll never go there.”
Lieberman: Undesigned Incentives Default to Improperly Motivating Employees
“Creating thoughtful incentive structures is really, really hard, which means if you haven't put a lot of thought into them, you can probably assume that you're improperly incentivizing employees in many parts of your business.”
Lieberman: Executive Defensiveness Incentivizes Dissenting Leaders to Stay Silent
“If in a senior leadership meeting, you appear defensive. When one of your executives is challenging an idea you have, you can assume that you are now incentivizing other leaders to be silent and hold back their opinions.”
Lieberman: Reassess People at the Idea Level to Combat Character Bias
“The best way to combat character multiplication is to force your brain to avoid the character shortcut that I just mentioned and try your best to reassess people at the individual idea level, meaning you treat every new idea they share as a new opportunity to …”
Lieberman: Decisiveness in Leadership Is Often Mistaken for Pure Speed
“Unfortunately, too many people misunderstand decisiveness for speed. The two are completely different things.”
Lieberman: Prioritizing Individual Fairness Often Creates Systemic Unfairness
“The way I understand it is that there is a difference between individual and system fairness, and oftentimes we try to be fair to the individual, which actually means we're being less fair for everyone else.”
Wharton Professor Warned Warby Parker Founders Against $49 Glasses
“The Wharton professor who advised the founders of Warby Parker said that they couldn't price their glasses at 49 dollars even if the economics made sense. Because they would be associated with shitty quality.”
Lieberman: Many 2010s Founders Succeeded Solely Due to a Bull Market
“You have a lot of leaders of companies that succeeded in the last 10 years because we were in a ten-year bull market, and the business they were in succeeded in spite of them, not because of them.”
Lieberman: Outspoken Candidates Are Sometimes the Worst Hires
“Sometimes the most extroverted outspoken people are also the worst employees because they're great interviews and But horrible workers, and they get through their career via bullshitting versus actual substance.”
Lieberman: Endowment effect leads founders to run companies past incompetence
“I believe that this risk of endowment effect causes far too many CEOs and founders to continue running their companies past their point of incompetence.”
Lieberman: Founders Regret Not Selling Sooner, Never Selling Too Soon
“What I can tell you anecdotally is that I have talked to a lot of founders who regret not selling sooner, and I have never talked to a founder that regrets selling too soon.”
Lieberman: VC Investments in Crypto, Web3, and AI Were Herd Mentality
“When you saw VCs pile in on Crypto companies, and then web three companies, and then mental health startups, and then AI startups, you were likely watching a lot of herd mentality.”
Lieberman: Morning Brew Botched an Executive Hire Due to Contrast Bias
“After letting go of a senior leader at Morning Brew because they had done a great job but had reached their ceiling, we hired a new senior leader who we thought was an absolute veteran compared to the other employee. But what we learned after a while was the n…”
Lieberman: Major Project Failures Stem From Compounding Insignificant Errors
“In business, I think of this as death by a thousand paper cuts. It is the project that either ended up being delayed by months or the final product was horrible. Not because there was a single bad decision or a single major delay, but because there were tons o…”
Lieberman: Fast 60-Second Business Ideas Are Often Highly Unoriginal
“In the context of marketing ideas or business ideas or content ideas, we all have a tendency to get excited about the first idea we think of, but you can generally assume that if you thought of an idea in 60 seconds, many other people thought of that same exac…”
Lieberman: Transparent leadership rationale eliminates organizational gossip
“When people don't have answers to things, when people don't have answers to decisions that are made in a business or actions that are taken, they end up creating stories, and when they create stories, you end up having a culture of gossip. By making transparen…”