Stories from the Locus – How can founders change their perspective to succeed

In these unprecedented times of (using the word unprecedented) uncertainty, many of us are contemplating taking the leap of faith and becoming full-time entrepreneurs. In this edition of the Zymurgist Diaries, let’s aim to understand how Fundamental Attribution Error (FAE) and self-serving bias are the bane for start-up founders (and investors); and what can founders (and investors) do to overcome them by developing new perspectives and using them to their advantage.

Fundamental Attribution Error
Fundamental Attribution Error (FAE)

As Pascal says of humanity:

“We know too much to be skeptics, and we know too little to be dogmatists.”

Well, it turns out that humans do have a penchant to oversimplify their misdeeds and blame even the slightest misstep for others’ failures.

Attributions occur when people attempt to interpret why others behave in certain ways. When we look at other people’s behaviours, there are two main types of attributions:

  • situational – a person’s actions are due to the situation that they are in; and
  • dispositional – a person’s actions are due to their disposition, or personality

Enter Fundamental Attribution Error (FAE)

In social psychology, fundamental attribution error (FAE), also known as correspondence bias or attribution effect – refers to a person’s tendency to attribute others’ actions to their character or personality, while attributing their own behaviour to external situational factors outside of their control.

Fundamental Attribution Error
Fundamental Attribution Error

As Stephen Covey aptly described FAE – “We judge others by their actions, and ourselves by our intentions”.

The best example given is when a person is late for a meeting, you would attribute the action to the person’s personality – “that person is always late”. However, if you were running late, it is almost always because of the situation you were in that led to the delay – “there was a lot of traffic”.

FAE leads us to ignore the influence of the situation that person was in and forces us to label the personality or character.

Need I say more?

So, how does FAE affect start-up founders?

Surprisingly, in several ways. Founders, by spirit, almost always have a delusional arrogance and an impulsive ready-aim-fire mechanism switched on all the time.  FAE can trigger a vicious chain-reaction of frustration, disengagement, under-performance among other things – where co-founders attribute everything bad happening in their venture to the personality of their co-founders/team members, and in their case, their personal situation.

Since co-founders are in the game for the long run, it is imperative that FAE is nipped in the bud.

Wait… there’s more!

Allow me to introduce FAE’s good ol’ sibling – the self-serving bias.

What is self-serving bias?

It is the belief that individuals tend to ascribe the success of the venture to their own abilities and efforts, but failure is somehow due to external factors. Does that not sound too familiar?

“If it worked, it was because of me. If it didn’t, it was because of someone or something else.”

Self-serving bias not only helps the person maintain a positive self-evaluation but also affects their public image, which could be attributed to their need for competence and expectations of future success.

While it is completely normal to believe in yourself when things are going well and blame the world when they are not; holding onto a skewed perspective of success and failure can be detrimental for the venture.  

self-serving bias
Self-serving bias

So, what can founders (and investors) do to be more aware of these biases?

  • Learn, observe, and learn: Firstly, learn more about the FAE and self-serving biases; and play the role of the observer when others exhibit these biases. Look at opportunities to observe, when you are the actor. Rome wasn’t built in a day. Through practice, you can switch between the roles of actor and observer and understand if you have fallen into one of these traps.
  • When observing others, consider the situational explanation: Just like you would look at an incident where you were accountable, with the situation in mind; look at a plausible situational explanation for others’ behaviour.
  • Give yourself some more time to figure out what really happened: A good post-mortem of the failure teaches you more about your limits and strengths. At the outset, you will find it difficult to identify and admit your lapses, but with practice, your self-awareness will allow you to see your role better.
  • Value failure and take accountability for your actions and results: Failing is a part of the overall process in startups. If you do not take accountability for your failures, and use them as opportunities to learn, adapt or improve, then remember – the lesson is going to repeat till you learn.
  • Give credit where it is due: Be fair, if you really deserve the credit, take it. However, in startups, it is all about the team that makes or breaks it. It is far more fun to help others succeed in the quest, as you know that it is not a zero-sum game.
  • Be approachable: Do not look at failure as “Whose fault is this?” but instead “What can I learn from this?”. Startups are all about learning from failure, so make sure that you allow some room for people to learn from their failures.

Parting thoughts till the next blog:

“Success isn’t an absolute. Failure isn’t permanent.”

Pause, reflect, act.

#TheZymurgistDiaries #GrowthMindset #Leadership #EntrepreneurialMindset #EntrepreneurialChallenges #covid19times

About the author:

24x Founder, 3x Success, 2x VCExit, 19x Failure, 100x Resilient, 14x Sectors, 6x Continents, $2+bn deals originated and advised.

Chennakeshav Adya (Keshav) is an eclectic value creator for mid-sized firms and PE/VC funds on Fund-raising, M&A, growth, corporate strategy and deal-making (currently, as co-founder of Adan Corporate). He is a resourceful entrepreneur with 20+ years of global experience in building businesses from a concept and growing global teams from 2 to 200+.

A deca-lingual, multi-talented zymurgist, Keshav is skilled at using the founder’s mentality and thrives in uncertainty and chaos, directing teams through the “Unknown” in the initial 1-2 years of setting up any type of new venture.

As an Entrepreneur Mentor in Residence (EMiR), Keshav is associated with London Business School’s experiential entrepreneurship activities supporting students and alumni who are interested in pursuing a career in entrepreneurship, whether launching or growing their own ventures.

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