In decision-making and self-perception, the self-serving bias holds a prominent place. It is a cognitive error that tempts us to attribute our successes to personal qualities and skills while conveniently shifting blame for failures onto external factors. This bias taints our perspectives and influences our behavior from the boardroom to the classroom. In this article, we will explore the intricacies of the self-serving bias, its manifestations in various contexts, and strategies to overcome its pitfalls. By unraveling this bias, we can strive for a more objective understanding of ourselves and our achievements.
The CEO’s Annual Report: A Case Study
The CEO’s commentary in annual reports is often a carefully crafted piece of corporate communication. These reports are not just numbers on a page; they are an opportunity for leadership to frame the narrative around the company’s yearly performance. This framing often includes the CEO’s personal reflections on their role in the company’s success or failure. The self-serving bias becomes apparent here in the way the CEO’s words reflect their influence on the company’s positive results, yet shift blame for negative outcomes to external factors.
When a company experiences a profitable year, the CEO will often reflect on their vision, leadership, and decisions as the key drivers of success. Their strategic foresight, tireless efforts, and ability to inspire the team are usually presented as the linchpins of a company’s progress. The reader is led to believe that the CEO’s decisions were the decisive factor in achieving the company’s success, almost as if it were a personal triumph. This kind of language not only reinforces the CEO’s sense of achievement but also consolidates their power and influence within the organization.
In contrast, the tone changes dramatically when the company faces a setback. Instead of reflecting on their own possible missteps or areas where they could have done better, the CEO’s narrative shifts to external factors—those beyond their control. In a challenging year, a CEO might blame the impact of political instability, trade wars, rising tariffs, fluctuating foreign exchange rates, or even the broader economic climate. These externalities provide a convenient scapegoat for poor performance, deflecting the focus from leadership decisions and mistakes. This creates a skewed narrative, where the CEO is seen as the hero during success, but a powerless figure during failure.
This kind of cognitive bias, though seemingly harmless in a report, can deeply impact how we perceive organizational leadership and accountability. When CEOs fail to fully acknowledge their role in both successes and failures, they lose the opportunity to reflect and learn from their actions. It also prevents the broader organization from truly understanding the causes behind both victories and setbacks, which could inform better practices moving forward.
The High School Classroom and the Self-Serving Bias
High school is one of the first environments where the self-serving bias becomes clearly evident. The grading system, by its very nature, sets up an environment where success is seen as a personal achievement and failure as an external shortcoming. For students, the A on an exam is often viewed as a direct result of their intelligence, hard work, and commitment. The pride that accompanies high grades reinforces their sense of personal competence and skill. They internalize the belief that they are deserving of their success, bolstering their self-esteem and sense of control over their academic life.
However, the situation is very different when the results are less than stellar. If a student fails an exam or gets a grade that doesn’t meet their expectations, the blame is typically placed on factors outside of their control. It could be the teacher’s unclear instructions, an exam that was too difficult, or even the distractions outside of the classroom that affected their performance. The most common refrain, of course, is the “unfairness” of the test. This tendency to blame external elements rather than reflect on personal shortcomings or mistakes is a clear example of the self-serving bias in action.
This pattern of thinking doesn’t magically disappear as students transition into adulthood. Instead, the bias shifts to new areas, such as career performance or personal finances. For instance, when a person’s stock picks perform well in the world of investments, they may attribute the success to their own intelligence, research, or risk-taking abilities. But when the stock market crashes, or investments go awry, the blame is placed on the volatility of the market, economic downturns, or poor advice from financial advisors. The individual’s own role in the outcome is often overlooked or diminished, as the self-serving bias ensures that success is internalized while failure is externalized.
The Illusion of Control in Business and Creativity
In both business and creative endeavors, the self-serving bias can become deeply ingrained, affecting decision-making and personal perceptions of success. This bias tends to inflate our sense of control over outcomes, which can lead to distorted thinking and actions. In business, the self-serving bias often manifests in entrepreneurs, executives, and managers who believe that their decisions are the primary driver of success. When a company thrives, it’s easy to think, “I knew exactly what I was doing; my leadership was pivotal to this success.” However, when things go wrong, these same individuals are more likely to attribute failure to external factors, such as a downturn in the market, competition, or unforeseen circumstances.
Creatives, too, fall victim to the self-serving bias. Consider an author who has just released a new book. If the book climbs the bestseller list, the author may believe it is due to their exceptional writing, storytelling abilities, or unique voice. The accolades and praise confirm their belief in their own talent and effort. However, suppose the book fails to gain traction. In that case, the author might point to external factors—perhaps the market was oversaturated with similar books, or readers simply don’t appreciate the author’s brilliance. In some cases, they may blame critics for not recognizing their “genius” or even claim that the failure is due to jealousy or spite from others in the industry.
The issue with the self-serving bias in both business and creative fields is that it leads to an inflated sense of control. The more we believe that our personal actions are solely responsible for success, the less we are able to acknowledge the role of external factors. This makes it difficult to learn from failure and can lead to complacency. In the creative process, it becomes challenging to accept that the audience’s tastes or market forces can play a significant role in determining the success of a book, film, or product.
Research Insights: Why We Believe We’re Right
Psychologists have long studied the self-serving bias to understand why we so often attribute our success to our own abilities and our failures to external factors. One particularly telling experiment involved a personality test, where participants were randomly assigned high or low scores. Those who received high scores were quick to praise the test, calling it thorough, insightful, and fair. They were more likely to believe that their good results reflected their true abilities and that the test had accurately measured their competence.
On the other hand, those who received low scores rated the test negatively. They described it as unfair, difficult, or poorly constructed, and they often dismissed the idea that their poor performance reflected any shortcomings on their part. This is a textbook example of the self-serving bias: individuals who succeed tend to internalize that success, while those who fail shift the blame outward.
So why do we behave this way? The simplest explanation is that it feels good to believe we are responsible for our successes. It boosts our self-esteem and gives us a sense of control over our lives. This psychological comfort allows us to feel competent and capable, which in turn enhances our confidence. On the other hand, failure feels unpleasant and disempowering. Blaming external factors—whether it’s a difficult test, a bad market, or unfair competition—allows us to preserve our self-image and avoid feelings of inadequacy.
However, this approach can be limiting. By continually externalizing our failures, we miss the opportunity to learn from them and to reflect on the factors within our control. This prevents us from growing and improving, which can be particularly damaging in both personal and professional contexts.
The Dark Side: How Self-Serving Bias Can Lead to Catastrophe
The self-serving bias may seem harmless personally, but it can lead to significant negative consequences when applied to larger, more complex systems. A stark example can be found in the case of Richard Fuld, the CEO of Lehman Brothers. Fuld’s refusal to take responsibility for the bank’s failure is a case study in the dangers of the self-serving bias. Despite Lehman Brothers’ catastrophic collapse in 2008, which triggered a global financial crisis, Fuld continued to frame himself as the “master of the universe.” He blamed external factors like government inaction, poor market conditions, and irresponsible lending practices for the bank’s collapse.
The refusal to acknowledge his role in the company’s failure only perpetuated the crisis. Fuld’s inability to recognize his mistakes prevented him from learning from them, which further entrenched his sense of infallibility. When leaders and decision-makers refuse to accept responsibility for their failures, they miss the opportunity to identify the true causes of their downfall and to make necessary changes.
This pattern is not limited to the corporate world. The self-serving bias can have similarly disastrous consequences in politics, healthcare, and even personal relationships. By consistently externalizing blame, we prevent ourselves from engaging in the kind of critical self-reflection that is essential for improvement. This failure to take responsibility can lead to recurring mistakes and missed growth opportunities.
Overestimating Our Contributions
The tendency to overestimate our contributions is another facet of the self-serving bias that shows up in both individual and group contexts. In a shared work or living environment, individuals often inflate their role in a collective achievement. A study involving five students sharing an apartment revealed just how widespread this tendency is. Each student overestimated their role when asked how often they took out the trash. One student claimed to take out the trash every second time, while another said it was closer to every third time. Yet, when these contributions were combined, the total estimates added up to an astounding 320%.
This same bias is observable in relationships. In marriages, both partners overestimate their contributions to the relationship’s health and happiness. Research has shown that both men and women often believe they contribute more than 50% to the relationship, even though the reality is likely more balanced. This overestimation can lead to misunderstandings, resentment, and frustration, as both individuals believe their efforts are more significant than they actually are.
Overestimating our contributions can also create problems in professional environments. In team-based projects, individuals might perceive their input as more important than it actually is, which can lead to conflicts and inefficiencies. When one person consistently overestimates their role, they may feel unappreciated or resentful if their contributions aren’t recognized as much as they think they should be. This reality distortion undermines teamwork and can prevent the group from functioning effectively.
How to Overcome the Self-Serving Bias
The first step to overcoming the self-serving bias is recognizing it for what it is. Understanding that we all have a natural tendency to attribute success to ourselves and blame failure on external factors is crucial for combating bias. Once we acknowledge its existence, we can take proactive steps to minimize its influence on our decisions and perceptions.
One of the most effective ways to challenge the self-serving bias is by seeking honest, constructive feedback from others. This feedback should come from people willing to tell you the truth, even if it’s uncomfortable. While it’s easy to surround ourselves with people who agree with us and reinforce our sense of superiority, true growth comes from receiving candid, sometimes critical, opinions. Friends, colleagues, or mentors who can offer honest insights into our strengths and weaknesses can help us gain a more balanced perspective.
Another powerful way to confront self-serving bias is to seek situations that force us to question our assumptions. This could involve asking for feedback from a competitor, attending a workshop where our ideas are challenged, or reflecting on past failures without externalizing the blame. When we allow ourselves to be vulnerable and open to criticism, we create opportunities for self-improvement.
Lastly, it’s essential to take responsibility for our mistakes. Instead of blaming external factors when things go wrong, ask yourself, “What could I have done differently?” This introspection may be difficult, but it’s necessary for personal and professional growth. By acknowledging our role in both successes and failures, we can develop a more realistic and balanced view of ourselves and our abilities. This will ultimately lead to better decision-making, stronger relationships, and greater overall success.
Conclusion
The self-serving bias reminds us of our inherent inclination to protect our self-esteem and evade accountability for failures. By acknowledging and understanding this bias, we can embark on a journey of self-reflection and objectivity. From corporate leaders to students and individuals in various relationships, recognizing our susceptibility to this bias enables us to accurately assess our achievements and contributions. So, let us embrace the challenge of self-awareness, invite honest feedback, and embark on a path toward genuine personal development.
This article is part of The Art of Thinking Clearly Series based on Rolf Dobelli’s book.