DECISION MAKING
Faulty Decision Making
• GUT INSTINCTS
• UNCONSCIOUS DECISION MAKING TRAPS
Five Habits of Bad Decision Making
Fixing the problem too fast Communicating ineffectively Paying more attention to some
individuals than is warranted •Using beliefs and guesswork
instead of facts•Not knowing the limits of your
decision making authority
HEURISTICS
UNCONSCIOUS ROUTINES
• Sensory Preception• Biases• Irrational Anomalies
COMMON DECISION MAKING TRAPS
ANCHORING• Giving disproportionate weight to the
first information that is received.
• Stereotyping skin color, clothing, or accent
DECISION TRAPS
HOW CAN WE REDUCE THE IMPACT OF ANCHORING ?
• Be open-minded• seek information and opinions from a
variety of people to widen your frame of reference
• offer objective information when seeking advice from someone else, just the facts
DECISION TRAPS
REMEMBER: • WHOEVER MOST VIVIDLY
CHARACTERIZES THE SITUATION USUALLY ANCHORS THE OTHER’S PERCEPTION OF IT.
THE STATUS QUO TRAP
INSTINCTIVELY STAYING WITH WHAT IS FAMILIAR• Look for decisions that involve the
least change• avoid changing the status quo• avoid rocking the boat
STATUS QUO TRAP
Think first of your goals when preparing to make a decision
Review how goals are served by the status quo as compared to a change
Look at each possible change, one at a time
STATUS QUO
Never think of the status quo as your only alternative
ask yourself if you would choose the status quo if it weren’t the status quo
STATUS QUO
Avoid the tendency to exaggerate the effort, cost or emotional reaction if you change from the status quo.
If several alternatives are superior to the status quo, avoid the tendency to fall back to the same old tried and true method
DECISION TRAPS
JUSTIFYING PAST ACTIONS
The more actions that you have already taken on behalf of a choice or direction, the more difficult you will find it to change direction or make a different choice.
PAST ACTIONS
TO OVERCOME JUSTIFYING PAST ACTIONS:
• Make a conscious effort to set aside your past actions
• Seek out and listen to people who were uninvolved with the earlier decisions
• Deal with your wounded ego
PAST ACTIONS
WHEN YOU FIND YOURSELF IN A HOLE, THE BEST THING YOU CAN DO IS STOP DIGGING
CONFIRMING EVIDENCE TRAP
WHEN WE LOOK FOR INFORMATION TO SUPPORT OUR EXISTING POINT OF VIEW WHILE AVOIDING INFORMATION THAT CONTRADICTS IT
CONFIRMING EVIDENCE TRAP
TWO FORCES AT WORK• Tendency to subconsciously decide
what we want to do before we figure out why we want to do it
• Tendency to be more engaged by things we like than by things we dislike
AVOIDING THE CONFIRMING EVIDENCE TRAP
Always check to see whether you are examining all the evidence with equal enthusiasm
Avoid the tendency to accept confirming evidence without question
Get someone you respect to play devils advocate
AVOIDING THE CONFIRMING EVIDENCE TRAP
Be honest with yourself about your motives
Don’t ask leading questions that make your decision evident
THE FRAMING TRAP
How you make a decision is often determined by how you view your choices or how you frame the questions around it
Frames That Can Distort Decision Making
Frames as a gain or loss• Most people don’t like to take risks
and will look for ways to turn down or avoid a decision where a loss is possible, even if a larger chance exists for a large gain.
Framing
People tend to adopt the framing of the situation as it is presented to them, rather that restating the problem in their own way
Framing
Don’t automatically accept the initial frame
Try to look at the problem or opportunity in several ways and invision different outcomes.
Estimating and Forcasting Trap
Three ways we make mistakes in forcasting:
• Overconfidence:• We believe we are better at forecasting than
we really are
• Prudence:• When faced with a high stakes decision we
tend to stay on the safe side
• Recallability• We tend to be overly influenced by past events
REMEMBER
Look around you and notice these traps
Before you make a decision, take time to review how you’re making it.
Don’t get emotionally attached to one outcome before you’re sure your decision making process serves you well.