Confirmation Bias: Why Owners Only Ask People Who Agree

The primary line of work dries up, and the owner starts looking for something else that pays. A public adjusting firm decides to start offering appraisal and umpire work, or to sell estimating-only services. A first-party law firm starts taking personal injury cases, workers' compensation, or construction law. The owner has heard a few success stories, done some quick math, and made up their mind. Then they move ahead without asking anyone. Not a peer, not a senior person on the team, not a referral source. Across the firms I've worked with, that's the most common way a pivot goes wrong. That's confirmation bias in business: looking only for the evidence that supports what you've already decided. It does its most expensive work in the phase of business where an owner chooses to change course.

This is article five of a seven-part series pairing each phase of the 7Seas of Entrepreneurship with the cognitive bias that shows up there most often.

The Shifting Sea Is a Chosen Change

The Shifting Sea is a deliberate change of direction. That's what separates it from the Sinking Sea, where change is imposed from outside. In Shifting, two things carry the load: what the firm is for, and how the market reads it. In 7Seas terms, those are Purpose and Perception, the mainsail. Operations and measurement follow and get rebuilt to match, which makes Process and Progress the headsail. The story leads and the machine follows.

The framework names the mistake that keeps owners stuck here: making the change quietly. Confirmation bias is the step before that. The owner makes the decision quietly, inside their own head, where the only voice in the room was always going to agree.

What the Research Says About Confirmation Bias in Business

Psychologist Peter Wason demonstrated the pattern in 1960 with a simple puzzle described in On the Failure to Eliminate Hypotheses in a Conceptual Task. He told people the numbers 2, 4, 6 followed a rule and asked them to discover it by proposing number sets of their own. Most people guessed something like "even numbers going up by two," then tested sets like 8, 10, 12. Each one got a yes, and they announced their rule with confidence. The actual rule was any three numbers in increasing order. They almost never tried a set that could have proved their guess wrong.

Raymond Nickerson's 1998 review, Confirmation Bias: A Ubiquitous Phenomenon in Many Guises, found the same tendency across law, medicine, science, and everyday judgment. People seek information that fits what they already believe, and they give it more weight than information that doesn't. An owner who checks a pivot only against the success stories they've already heard is testing 8, 10, 12.

Nobody Gets Asked

Ask an owner who they ran the pivot by, and the most common answer is nobody. That's the problem. There's no peer, advisor, or senior team member pushing back, so the only evidence the owner weighs is the evidence that found them. That usually means a colleague at a conference who made good money on appraisals, a post about a firm that added personal injury cases, or a rough estimate of what a few new files might bring in.

The evidence that doesn't get gathered is the evidence that would change the decision. A public adjuster moving into appraisal and umpire work steps into a different role, with different expectations about independence and different relationships with carriers and other public adjusters. Estimating-only services compete with a different set of providers on different terms. A first-party law firm taking personal injury, workers' compensation, or construction law cases is entering practice areas with their own procedures, timelines, case economics, and referral networks. Every one of these moves carries licensing, competence, and conflict rules that vary by state. None of that shows up in a success story.

The same holds for any professional services firm. A move that looks easy from the outside looks easy because the only people describing it are the ones it worked for.

The Pivot Is Often Running From the Wrong Problem

The bigger miss is the reason for the pivot. Most of the pivots I see happen because the primary line of work dried up and the owner went looking for something else to make money. That isn't really a chosen change of direction. It's a reaction to a slowdown, dressed up as strategy.

The 7Seas framework separates two things a pivot can be. Either the business drifted away from its purpose, or the purpose itself changed. The right response to each is the opposite of the other. Confirmation bias convinces nearly every owner they're in the second case, because "our purpose evolved" is a much better story than "our main work slowed down and we panicked."

When the real trigger is a slowdown, the firm is often in the Stalling Sea, and the work is closer to home: rekindling what the firm is already good at and already knows. That might mean finding new ways to reach the same clients, rebuilding referral relationships that went quiet, or adapting the core service to a changed market. It rarely means bolting on a practice area the firm has never worked. The owner skips that option because nobody asked the question that would have raised it.

One overlap is worth naming because it changes what you should watch for. The success stories that pull owners toward a new line of work are only the visible ones. The firms that tried the same move and quietly backed out don't tell their stories at conferences. That's survivorship bias, and it closes out this series in a few articles.

What a Tested Decision Looks Like

The 7Seas framework describes the signals that a firm has made it through the Shifting Sea: the new story is told, stakeholders have answered, operations have been rebuilt to match, and the firm has new measures for its new definition of success.

At the decision level, it looks like this. The owner can name the strongest objection to the change and who raised it. At least one person with nothing to gain from the decision weighed in before it was made. The owner asked whether the core business could be rekindled before deciding to leave it behind. The licensing and competence requirements of the new work were understood before the first file came in. And the change got made because the firm's purpose moved, not because last quarter was slow.

Seeing the Bias Is Free. Testing the Change Is the Work.

Knowing about confirmation bias won't put a skeptic in the room. Building the habit of testing a change before making it, and knowing when the better move is to strengthen what the firm already does well, is what we cover in Below the Waterline, TAA's online course for owners who want their next move to be a deliberate one. If you're about to add a service line because the old one slowed down, start there.

Next article, the series moves to the Selling Sea, which in the 7Seas framework means preparing a firm for a sale or succession, not sales technique. That's where the anchoring effect sets the number an owner can't let go of.

Seven Seas Article Index