Everyone wants to feel good about themselves -- it's human nature. 

People believe they're smarter, prettier, and more skillful than they really are. But that cognitive bias can extend to group settings, creating a dynamic in which a small business owner ignores -- or dismisses -- the group's faults at their expense. 

Here's how: A little-known cognitive bias called the "ultimate attribution error" causes people think more positively about themselves or their group, regardless of their flaws or what happened. Again, this is natural, as people like to think their own family, friends, and colleagues are the best. But on a practical level, it means we're working really hard to make excuses for ourselves and not solving the problem. 

As an example, car drivers tend to blame accidents on the other guy, lousy weather, or bad luck. Conversely, if they avoided an accident, they might attribute the feat to their skills. In the office, a manager might ascribe her team's buggy coding to a long week, overlooking the fact they're not performing up to par. And if they do something great, she might still praise them for working so hard, even if it was a fluke. 

To prove the theory for this bias, a scientist named Martin Coleman conducted a study published in Current Psychology. He examined 420 19-year-olds to determine their political preference (Democrat or Republican). After the subjects were induced to feel an emotion -- fear, anger, or neutral -- they explained a politician's behavior (good or bad) using a storyboard.

What he found was that emotions color perceptions, but the desire to feel good about ourselves is even greater. If the politician they liked did something reprehensible or immoral, then that was because he was having a bad day. But if they didn't like him, the guy was incompetent or a bad character.  

As a manager, you can identify this bias by catching statements like "always" and "never" and evaluating your team based on their performance, not whether you like them. Likewise, give your competitors the benefit of the doubt and pay attention when they're winning because chances are it isn't just luck. 

Finally, communicate with your team to determine whether their success story is legit or just fortunate timing.