Introduction to Management

Critical Issues

Entrepreneurs need to have tenacity and determination, but they should also be realistic. They must address terminal problems instead of ignoring them.
Human beings have a problem processing information that is contrary to their current assertions. If they have an idea or hypothesis, they are likely to consider information that is consistent with that idea and ignore information that is inconsistent with that idea. This cognitive bias against confounding information is called the confirmation bias, and it is very dangerous to entrepreneurs.
Instead, entrepreneurs should be trying to find problems and weaknesses in their business plans so that they can try to fix them. They should pay extra attention to bad news and criticism.
In a worst case scenario, if there is a terminal problem that cannot be fixed, entrepreneurs should stop working on their current venture. Denial is not a strategy, and pretending that a terminal problem does not exist will not make it go away. It is usually better to stop earlier to minimize the time and money lost on a hopeless project.
Critical Issues557Critical Issues