Hello Friends ,
If you want to lead effectively, you need to
be able to make good decisions. If you can learn to
do this in a timely and well-considered way, then
you can lead your team to spectacular and well-deserved
success. However, if you dither or make poor decisions,
your team risks failure and your time as a leader
will probably be brutally short. This month we will
take a deep dive into Decision Making.
The 8 Traps of Decision Making
Before making an important decision, prudent managers
evaluate the situations confronting them and often
fall into one of the eight traps of faulty thinking.
Researchers have identified a series of flaws in the way
we think when making decisions. They are hardwired into
our thinking process, so we often fail to recognize them.
While we cannot entirely rid ourselves of them, we can
learn to understand the traps and compensate for them.
1. The Anchoring Trap
When considering a decision, the mind gives disproportionate
weight to the first information it receives. Initial impressions,
estimates or data anchor subsequent thoughts and judgments.
In business, a common anchor is a past event or trend. While
relying on such may lead to a reasonably accurate estimate
of future numbers, it also tends to give too much weight
to past events and not enough to other factors. The Antidote
Anchors affect how virtually all professionals make decisions.
No one can avoid their influence. But becoming aware of
their dangers can reduce their impact:
2. The Status-Quo Trap
- Always view a problem from different perspectives.
Try using alternative starting points and approaches rather
than sticking with your first line of thought.
- Think about the problem on your own before consulting
- Be open-minded. Seek opinions from a variety of people
to widen your frame of reference.
- Avoid anchoring your advisers, consultants and others
from whom you solicit information. Tell them as little
as possible about your ideas and estimates. If you reveal
too much, your preconceptions may simply come back to
We are predisposed to perpetuating the status quo.
Deep within our psyches, we are self-protective and
Don't maintain the status quo just because it's comfortable.
Do so only when it turns out to be the best choice.
3. The Sunk-Cost Trap
- Remind yourself of your objectives. Examine how they
would be served by the status quo.
- Never think of the status quo as your only alternative.
Identify other options.
- Ask yourself: Would I choose the status quo if it weren't
We tend to make choices in ways that justify past decisions,
even when the latter no longer seem valid. We know rationally
that sunk costs are irrelevant to present decisions,
but they nevertheless lead to inappropriate choices.
This frequently occurs when we're unwilling, consciously
or not, to admit a mistake.
- Seek feedback from those who were uninvolved in the
- Examine why admitting a past mistake distresses you.
Even the best and most experienced managers are not immune
to errors in judgment.
- Be on the lookout for the influence of sunk-cost biases
in subordinates' decisions and recommendations.
- Don't cultivate a failure-fearing culture that leads
employees to perpetuate and cover up mistakes.
4. The Confirming-Evidence Trap
Leaders sometimes seek out information that supports their
existing instinct or point of view, while avoiding information
that contradicts it. This trap affects where we go to collect
evidence, as well as how we interpret it.
Don't necessarily disregard the choice to which you're subconsciously
drawn, but make sure it's the smart one.
5. The Framing Trap
- Check whether you're examining all evidence with equal
- Ask someone you respect to play devil's advocate.
- Be honest with yourself about your motives. Are you
really gathering information to help you make a smart
choiceor are you looking for evidence that confirms
what you already think and want to do?
- When seeking others' advice, don't ask leading questions
that invite confirming evidence.
The first step in making a decision is to frame the question.
It's also one of the most dangerous; how you frame a problem
can profoundly influence your choices.
Limit adverse effects by employing the following:
- Don't automatically accept the initial frame, whether
it was formulated by you or someone else. Always try to
reframe the problem in various ways.
- Try posing problems in neutral ways that combine gains
and losses or embrace different reference points.
- When others recommend decisions, examine the way they
framed the problem. Challenge them with different frames.
The Estimating and Forecasting Traps
Meteorologists and bookies have opportunities and incentives
to maintain records of their forecasting abilities. The
rest of us seldom have enough carefully tracked data to
adequately calibrate our minds to make reasonable estimates
in the face of uncertainty. This sets us up for three more
6. The Overconfidence Trap
Most of us are overconfident about our judgment abilities
and prediction accuracy, as we remember our successes and
quickly forget our errors. Our hubris tricks us into considering
only a narrow range of possibilities.
Major initiatives and investments often hinge on estimate
ranges. Managers who underestimate the high end (or overestimate
the low end) of a crucial variable may miss attractive opportunities
or expose themselves to far greater risk than ever imagined.
7. The Prudence Trap
When faced with high stakes, we tend to adjust our estimates
or forecasts with prudence, "just to be on the safe side."
Too much prudence can be as dangerous as too little.
8. The "Recallability" Trap
Memories of dramatic events leave strong impressions on
our minds and can skew future decision-making efforts.
Take a disciplined approach to forecasting.
- Start by considering the extremes: the low and high
ends of possible value ranges. Then, challenge your estimates,
as well as those of your subordinates and advisers.
- Always state your estimates honestly, and explain to
anyone who will be using them that they have not been
adjusted. Emphasize the need for frank input to anyone
who will be supplying you with estimates. Test estimates
over a reasonable range to assess their impact.
- Carefully examine all of your assumptions to ensure
they're not unduly influenced by your memory. Get actual
statistics whenever possible, and avoid being guided by
Just as people are different,
so are their styles of decision making. Each person is a result
of all of the decisions made in their life to date. Recognizing
this, here are some tips to enhance your decision making batting
Thanks for sharing this with your friends and family.
- Do not make decisions that are not yours to make.
- When making a decision you are simply choosing from
among alternatives. You are not making a choice between
right and wrong.
- Avoid snap decisions. Move fast on the reversible ones
and slowly on the non-reversible.
- Choosing the right alternative at the wrong time is not
any better than the wrong alternative at the right time,
so make the decision while you still have time.
- Do your decision making on paper. Make notes and keep
your ideas visible so you can consider all the relevant
information in making this decision.
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