Five Decision Making Traps

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Be Careful not to make these mistakes!

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Five Decision Making Traps

  1. 1. 5 Dangerous Decision Making Traps Martin A. Schwartz
  2. 2. Research Indicates <ul><li>Business owners are happier using their biases or intuition than a structured decision making tool. </li></ul><ul><li>91% of business owners felt they made good decisions </li></ul><ul><li>In reality 60% of those decisions were a bust </li></ul><ul><li>More disturbing, 60% of decisions makers never explored any alternative </li></ul>
  3. 3. What Causes Poor Decisions <ul><li>#1. Overconfidence in your judgment </li></ul><ul><li>You fail to collect critical data because you are so sure of your assumptions and opinions. When you allow assumptions to go untested, the chances of making a bad decision increase. </li></ul><ul><li>Assumptions sound like this: This service will save us money. Use a clarifying statement with all assumptions -- Please give me an example of how this service will save us money -- and you will increase your ability to make good decisions. </li></ul>
  4. 4. What Causes Poor Decisions <ul><li>#2. Shooting from the hip -- guilty as charged. </li></ul><ul><li>With this decision making trap you believe you can keep straight in your head all the information you've discovered and you wing it instead of following a systematic procedure when making a final choice. </li></ul><ul><li>Write it down! </li></ul><ul><li>Write down your reasons for thinking something is a good idea and continue to ask questions that force you to probe deeper -- How will we measure or what makes me think or why am I considering this now . </li></ul>
  5. 5. What Causes Poor Decisions <ul><li>#3. Not keeping track </li></ul><ul><li>When we make a bad decision, our preference is to simply forget it ever happened. </li></ul><ul><li>Instead, if you make it a point to write down how you came to that decision and you spend a little time analyzing what went wrong, chances are pretty good you won't go there again. </li></ul><ul><li>Ignoring the impact of those bad decisions won't help us learn key lessons. </li></ul>
  6. 6. What Causes Poor Decisions <ul><li>#4. Plunging in </li></ul><ul><li>We jump in without really understanding what the real issue is. </li></ul><ul><li>We start to gather information and because we are either in a hurry or there is a crisis brewing, we jump to conclusions without really understanding the root cause of an issue. </li></ul><ul><li>Chances are we may make a decision that doesn't address the real problem. </li></ul>
  7. 7. What Causes Poor Decisions <ul><li>#5. Group failure </li></ul><ul><li>Assuming that with so many smart people involved, good choices will automatically follow. </li></ul><ul><li>I've also seen this called 'group think' when just because the group aligns behind something their collective thinking must be right. </li></ul><ul><li>Too often companies shun people who come across as playing devils advocate. They are perceived of as difficult or not a team player. </li></ul><ul><li>Listening to dissenting voices may stop you from making some bad decisions. </li></ul>
  8. 8. What to Do <ul><li>Take the time in 2009 to think about how you make decisions and how you model that behavior for your team. </li></ul><ul><li>Come up with a simple but consistent way to review how you are making decisions. </li></ul><ul><li>Don't let these decision making traps cost you valuable time or money. </li></ul>

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