Note from Art: Your decisions define you as a leader and a manager, yet we spend very little time in our busy lives finding ways to improve our abilities in this area. This Management Excellence Toolkit Series will help you recognize the challenges and pitfalls of individual and group decision-making and offer ideas on improving performance for you and your co-workers.

Part 1 of this series emphasized the importance of developing, updating and referencing a Decision Journal as part of your program to improve your decision-making effectiveness.  In Part 2, we focus on understanding a bit more about how we make decisions, and I introduce the topic of Decision Traps.

How We Decide and The Invisible Traps that Haunt Us:

A good number of researchers and scientists summarize our decision-making process as one of Pattern Matching coupled with Emotional Tagging.

We process situations based on prior experience looking for signs of patterns, and once the patterns are recognized, we attach stored emotional tags to those situations.  Much of this happens in the background, with neurons firing in many areas of our brains simultaneously. Our first recognition of the output is often what we describe as our “gut” feeling about a situation.

While the system works well for many familiar situations, it is not without its imperfections.  In particular, as we are exposed to new situations that “don’t compute,” our response and decisions are potentially flawed based on our mis-application of an invalid pattern.

There are other vexing and mostly invisible flaws in the machine, including a good number of cognitive biases that lead us, our groups and our organizations into decision-making traps with alarming regularity. The results can be inconvenient to catastrophic.

An Example-When the Pattern Didn’t Match:

In one of my favorite articles on this topic, “Why Good Leaders Make Bad Decisions,” at HBR (subscription or purchase may be required), the authors describe how Matthew Broderick (the general…not Ferris Bueller), the head of the Homeland Security  Operations Center during Hurricane Katrina, fell victim to a pattern-matching error.

Broderick, who had served in Vietnam, learned that early reports of disasters were often very wrong, and had developed a process of waiting for the “ground truth” to validate or invalidate the initial information. This served him well on the battlefield, and it also worked fine later at Homeland Security during other hurricane situations.  Of course, all of those other hurricanes took place around cities above sea level…a very different situation from New Orleans.

Through a series of conflicting reports, including a CNN report of people allegedly partying on Bourbon Street, Broderick closed the day by indicating in a situation report that the levees had not been breached, although he indicated this would require re-checking the next day. And then he went home.

Broderick was a victim of his own pattern-matching approach, and his experience in seeking and relying on the ground truth let him down (and many others) in a situation that was subtlely and importantly different from his store of experiences.

Vigilance and Prevention Are Critical:

Unfortunately, there are a great number of ways or memories, minds, biases, filters, environments and influences can lead us astray as we pursue the process of making decisions. Throw us into groups, and the social factors in team settings increase the odds of getting it wrong in a big way.

There are no simple cures for avoiding decision-making traps and cognitive biases. The best offense in this case is a strong defense, built on awareness of the traps and hypersensitivity to how situations are framed and decisions developed. Of course, for those offensive minded players and coaches out there, once your strong defense is in place, building processes and strengthening the culture to avoid the traps is eminently doable.

Vigilance is key. Forewarned is Forearmed.

Meet the Decision-Making Traps:

Over the next few posts, we’ll explore some of the more vexing decision traps and cognitive biases, complete with examples and hopefully, your input.

We’ll explore and offer preventive measures for:

  • Escalation of Commitment/Sunk Cost trap: the irrational pursuit of a failed approach. The legacy issues are the tough ones to let go.
  • Over-Confidence Bias and other Estimating and Forecasting Errors. Your leadership style and the culture in your organization contribute to costly estimating and forecasting issues of all sorts. And mix a group in the equation, and watch out for a really dangerous level of over-confidence to emerge.
  • Status Quo Trap: given our druthers, we will typically opt for the decision that best defends the status quo. While there are places and cases for this, the historical record of business is littered with organizations that never emerged from this trap.
  • Groupthink: everyone thinks of Kennedy and the Bay of Pigs fiasco, but rest assured, you and your team members are quite susceptible to the suspension of reality and suppression of contradictory opinions that characterize this dangerous trap.
  • Framing errors: how an issue is framed…and whether it is framed in terms of gains or losses will most definitely impact the choices developed and the final decision.
  • Anchoring Trap: Our own biases, the first information we hear, casual comments from colleagues are all contributors to our propensity to grab hold of early information and then view all other subsequent data through that filter.
  • Confirming Evidence Bias: imagine our excitement when we find data to support our perspective. How objective are we about contradictory data? Turns out…not so much.

And a few more.

The Bottom-Line for Now:

Like it or not, we don’t make decisions precisely the way the textbooks describe the process: define the problem, gather and assess the data, identify options and choose the best option. While we might work through those phases, there’s often nothing rational about how we navigate each one…and we most definitely don’t make the “rational choices” that economists would have us believe are the only appropriate outcomes.

This is a big topic…with HUGE leadership and management implications.  The first step is awareness of the issues…and then we move to mitigation.  Stick with us…keep updating your Decision Journals and I’ll see you in the next post as we breakdown a number of those traps into symptoms, signs and preventive measures.

Remember, forewarned is forearmed.  Here’s to better decisions!