We all love to believe we are rational beings and that this rationality extends to how we make decisions.
Unfortunately, it’s not the case. Bias pervades our decision making. And this is dangerous when the bias is unconscious.
This is because we don’t make decisions on facts alone. We make decisions on hunches, feelings and gut reactions. That’s not to say that all these decisions will be bad.
And so, because we are constantly looking for ways to rationalise and substantiate our opinions we can be blind to the obvious and closed to other people’s opinions.
Daniel Kahneman in his brilliant book “Thinking Fast and Slow” shared his years of research into this field. He explains how the automatic and instinctual part of brain can lead us to cognitive bias, and that we can place too much confidence in our own judgement.
This leads to traps such as: sunk cost (where due to loss aversion we don’t walk away from something, even when the facts show we should), anchoring (where our decisions are influenced by the earliest piece of information we receive), and others.
History provides fertile ground for learning the lessons of cognitive bias. For example, groupthink, where a group makes faulty decisions because of the pressure of group processes and norms, is seen as one of the causes of the Bay of Pigs invasion.
So how do you overcome these barriers and help ensure that your decision making has the right level of robustness? It’s about having the right level of awareness, analysis and aptitude.
Awareness – it’s important to understand the level of consciousness you have about the decision you are making. Are you aware that a decision is being made? Are you on the look out for influencing factors and how you are processing information? Are you conscious of limitations or bias that may be constraining how you think?
Analysis – how you analyse the range of information sources, and ensure you are not selectively filtering out information. How much information are you looking at? Are you seeking views from a range of diverse sources? How are you prioritising the information and using a clear process to sort, rank and select the possible outcomes?
Aptitude – your willingness to challenge assumptions, pre conceived ideas and to take on different ideas and opinions. During your thinking processes are you being curious and opened minded, or is your opinion fixed? Are you ensuring that the decision has been analysed from multiple perspectives? Are you willing to change your mind?
Alfred Sloan, the former CEO of General Motors is quoted as saying:
“Gentlemen, I take it we are all in complete agreement on the decision here…Then I propose we postpone further discussion on this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about”.
Perhaps it’s time to take your decision making to a new level.
Change happens. Make it work for you.
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