10 Biases that Destroy Agency Founders

I talk to a lot of agencies, and I see some biases popping up frequently.

And often, they founders I talk to aren’t aware they have them, even if they know what they are.

It’s hard to see these in ourselves, but it’s good to take stock of them to see how we deal with each mentally.

Here are the most common biases I see with agency founders and how I see them impacting the day-to-day:

1. Confirmation Bias

Confirmation bias is like that friend who only hears what they want to hear. As an agency owner, you might cling to ideas that match your beliefs while ignoring pesky facts that say otherwise. 

It’s like wearing blinders in a room full of neon signs. To avoid this, invite diverse opinions, even if it feels like letting someone else control the playlist.

Impact: Agency owners might overlook critical flaws in strategies or ideas that they are emotionally invested in.

2. Sunk Cost Fallacy

The sunk cost fallacy is like doubling down on a bad bet because, hey, you’ve got to make that loss worth it. 

For agency owners, this means throwing more time and money into a project that's sinking faster than a lead balloon. Instead, cut your losses and focus on opportunities that aren’t a one-way ticket to Frustrationville.

Impact: Sticking with a failing project or client relationship because of past investments, leading to more losses.

3. Anchoring Bias

Anchoring bias is when the first number you hear sticks in your brain like gum under a shoe. If you let early estimates or client expectations set the tone, you might miss the chance to adjust as new data rolls in.

Impact: Initial client expectations or early proposals can unduly influence final decisions, even when new information is available.

4️. Overconfidence Bias

Overconfidence bias is that inner voice saying, “You got this!”—even when you’re walking a tightrope without a net. Agency owners with this bias might charge ahead without checking the map, leading to avoidable blunders. A little humility and a lot of feedback can keep you from turning a victory lap into a faceplant.

Impact: Overconfident agency owners may take unnecessary risks, underestimate competition, or make poor strategic decisions. This is often seen when taking on additional headcount or projects with no plan and just a “we’ll figure it out” mindset.

5️. Availability Heuristic

The availability heuristic is like assuming the weather is always sunny because you live in California. Agency owners might base decisions on recent experiences or vivid memories, ignoring broader trends. 

Don’t let yesterday’s success story become today’s flawed strategy—look at the big picture, even if it’s not as exciting as that one time you nailed it.

Impact: Recent events or memorable client experiences might skew decision-making, leading to skewed perceptions of market trends or client needs. 

The Curse of Red Queen: What worked yesterday won’t work tomorrow. 

6️. Herd Mentality

Herd mentality is when you follow the crowd because, well, everyone else is doing it. Agency owners might jump on trends just because they’re popular, not because they make sense (RevOps anyone?). 

Instead, channel your inner rebel and ask, “Does this actually work for us?” before joining the stampede.

Impact: Agency owners might adopt industry trends or competitor strategies without assessing whether they align with their own business goals or client needs.

7️. The Halo Effect

The halo effect is like thinking someone’s a genius just because they have a shiny award. For agency owners, this means overvaluing a client or employee based on one good impression, only to discover later that all that glitters isn’t gold. Remember, one great campaign doesn’t make them a wizard—keep your evaluations balanced.

Impact: A single successful campaign might lead to overestimating a client's potential, neglecting other critical factors that could affect future performance.

8️. The Dunning-Kruger Effect

The Dunning-Kruger effect is when you think you’re the expert on everything after watching a few YouTube tutorials. Recognize when you’re out of your depth and bring in the pros before you hit a sour note.

This is also read as: Don’t become an SEO agency if you’ve never done SEO.

Impact: Agency owners might make uninformed decisions in areas where they lack expertise, assuming they know more than they actually do.

9️. Status Quo Bias

Status quo bias is that comfy feeling of sticking to what you know, even if what you know is last year’s fashion. Agency owners might resist change because, hey, why mess with what’s working? But the market’s a runway, not a museum.

Impact: Agency owners might resist necessary changes or innovations, sticking to outdated practices that could harm their business in the long run.

Interestingly enough, the status quo for most agency founders IS change. So sometimes, not changing can be what you need. 

10. Attribution Error

Attribution error is like taking credit for a team win and blaming the refs for a loss. Agency owners might pat themselves on the back for successes while pointing fingers at the universe for failures. 

This can lead to missed learning opportunities and some seriously annoyed team members. Share the credit, own the mistakes, and keep everyone in the game.

Impact: Agency owners might not learn from mistakes, repeating the same errors, or they might not give credit where it’s due, which can affect team morale.

Take ownership of EVERYTHING. 

Tips for Mitigating These Biases

Awareness and Training

Think of cognitive biases as the hidden Easter eggs in your agency’s decision-making process—some are fun, but most will trip you up. Regularly educate yourself and your team on these sneaky biases so they don’t ambush you when you’re least expecting it. 

Knowledge is power, and a well-informed team is your best defense.

Diverse Perspectives

If everyone on your team thinks alike, you’re basically a human echo chamber. Break out of that bubble by seeking input from a diverse group of voices within your agency. 

Fresh perspectives can help spot biases that everyone else is blind to—plus, it makes brainstorming sessions way more interesting.

But studies have shown having a diverse team isn’t enough, as people often fall into the herd mentality on decisions. It’s up to the leader to ensure that diversity thrives. 

Data-Driven Decisions 

Relying on intuition alone is like driving with your eyes closed—sure, you might get lucky, but do you really want to risk it? 

Instead, let data and analytics be your co-pilot. Numbers don’t lie (unless you’ve screwed up the spreadsheet), so lean on them to guide your decisions and keep those biases in check.

Regular Reviews 

Biases love to hide in plain sight, but they’re no match for a good old-fashioned review session. 

Periodically take a step back to examine past decisions and outcomes. This not only helps identify patterns of biased thinking but also ensures you’re learning from your mistakes—and maybe even celebrating a few unexpected wins along the way.

Get Expert Help

Solomon’s Paradox says you’ll never be as good at solving your own problems. That’s why you need a team of experts around you. 

Want to chat about what’s holding back your agency? Grab some time and we can do a full constraint breakdown to see where you are, leaving you with a plan for fixing it.