Making Better Decisions
The reasons we make bad decisions include not investing the sufficient amount of time required to make a good decision, believing that as rational human beings we can thoughtfully solve complex problems in our heads and that you don’t need anyone else’s help to decide, writes Cheryl Strauss Einhorn, CEO of Decisive, a consultancy that helps businesses solve complex problems.
Einhorn has identified 11 myths that lead to bad decisions.
- Equating efficiency with effectiveness. In a world that relishes immediacy, making a quick decision can lead to regret. To make the best decision, you first need to determine the problem you want to solve or the solution you want to achieve. Would you buy the first car they see in a dealership? Certainly, that would be efficient, but it may not result in the car you want or need.
- Kicking the can down the road. Not deciding because you don’t have time, is deciding not to decide. Intentionally slowing down focusing on the problem and potential solutions will avoid having to take the time to decide later.
- Not finding the forest from the trees. If you focus on a process instead of the problem, you may not find the right solution. Imagine if your car has a flat tire and your response would be to buy a new car instead of fixing the tire.
- I alone can solve the problem. Involve important stakeholders in major decisions to determine how a proposed course of action will affect them. If you decide to change lines without gaining input from your designers, how well are they likely to receive the new offering?
- Confirmation bias or believing what you want to believe regardless of evidence to the contrary. As Adam Grant writes in Think Again, “If knowledge is power, knowing what you don’t know is wisdom.” Look for contrary examples. Search for questions that you should be asking.
- Gut instincts. Gut instincts are often based on bias and faulty memory. Look for new information and insights before making important decisions.
- Linear thinking. Good decision making should be circular, requiring a feedback loop as more information is obtained and analyzed. How many showroom customers that spend months researching their projects would settle for only one bid from a single showroom?
- Relying on memory. Most large decisions comprise a series of small decisions. If you rely on your memory to keep track of all those small decisions, chances are something will be forgotten. Leonardo da Vinci and Albert Einstein kept notebooks of their thoughts and discoveries. Take a page from their books and document research used to make decisions and decisions made.
- Insufficient research. Resist the temptation to make a decision to get it off your to-do list if you have not conducted sufficient research and confronted assumptions. Rely on outside experts, review sites and customer testimonials to confirm that the decision you are making is the right one.
- Belief in rationality. As much as we want to believe we are rational human beings, guess what? We aren’t rational. Everyone has inherent biases that are based on past experiences. Most people buy a car every six years. Car salespeople sell an average of 8 cars per month. Who do you believe would have an upper hand in a car selling negotiation?
- Only one option. There are multiple options to reach a desired solution. Step outside routines and established patterns to see potential solutions differently.
Einhorn suggests a way to combat inherent biases is to take time to view the entire picture and reflect on the solution you want to achieve. She suggests asking the following five questions.
- Which decision-making myths am I relying on to make a decision?
- How will the decision affect my life goals?
- Are my feelings related to this decision based on what’s actually happening or do they reflect my learned patterns of behavior?
- What other information could help me make a better decision?
- How can I better understand the perceptions and perspectives of others involved in the decision?