We all want to make good decisions. Sound decisions generally improve our outcomes in life and at work. Information from recent studies can help us fine-tune this process, since there are some real pitfalls to navigate. Here’s a short list.
- Resulting – Former poker pro Annie Duke uses this term in her fantastic book, “Thinking In Bets,” to refer to the human tendency to blame a decision’s bad outcome instead of the soundness of its intention. For example, one football coach makes a decision in the final seconds of the Super Bowl to make a risky pass play, and loses the championship. A different year, another coach makes the same decision with the same constraints, and wins the Super Bowl. In both cases, the after the event, most armchair quarterbacks said the coach in each case got the result he deserved, even though the decision was the same. This backward-looking justification, “resulting,” only soothes what we cannot control: the luck involved. Lesson: make the best decision you can with the available information.
- Endowment Effect – We hate losing things more than we enjoy gaining them. In an experiment, Group A was given chocolate bars, and asked if they would like to trade them for a coffee mug with similar value, and none took the trade. Members of Group B were given coffee mugs and then offered chocolate bars, and again, none took the trade. Both groups experienced biased information processing, defending their decisions by protecting an innate feeling of ownership that was more desirable than the perceived feeling of losing something. Lesson: Fight your biases by imagining the opposite decision of the one you’re evaluating.
- Random Mode – When rats are faced with certain unpredictable situations, they can switch into random mode! Researchers believe that this serves a purpose: past experience is usually helpful, but when uncertainty levels are high, past experience can be misleading, so randomness is in the rats’ best interest. When we’re faced with the unfamiliar, experience can mislead us, too, partly because we filter it through various irrational biases. Lesson: Roll the dice once in a while.
- Denial – Once a team has solved a problem a second time, it tends to stop looking for new ways to solve it. Sticking with what used to work fuels denial. Acting in denial is why many CEOs lose their jobs: they fail to deal with change, under-performing employees, customers’ needs, and even reality itself. Teams in denial follow that same pattern, and silencing problems becomes corporate culture. Lesson: Read Richard Tedlow’s Denial: Why Business Leaders Fail to Look Facts in the Face to understand denial in the workplace and what to do about it.
- Post-error Slowing – We’ve all heard the advice that we should just slow down after we make a mistake. The decision-making process in the brain actually does this itself, slowing down a little bit after we’ve made the wrong choice, but this phenomenon isn’t as helpful as you might think. The problem is that your brain wastes so much time trying to figure out what happened, whether something changed, and whether something is wrong that it distracts you from finding the right answer. Lesson: Don’t slow down after a misstep; keep hunting.
- Fudging the numbers – Mount Everest was calculated to be exactly 29,000 ft (8,839.2 m) high, but was publicly declared to be 29,002 ft (8,839.8 m) in order to avoid the impression that the mountain’s true height was nothing more than a rounded estimate. Andrew Waugh, British Surveyor General of India, is sometimes playfully credited with being “the first person to put two feet on top of Mount Everest.” Lesson: Use the real data. 29,000 is a random number too.
With new insight comes new vistas. Let’s make great decisions in 2019, and reap the successes we deserve. Working with a Professional Employer Organization like Staff One HR could be one great decision to start your year off right. Contact the author directly at firstname.lastname@example.org.