HOW TO MAKE BETTER DECISIONS AT WORK AND AT HOME - PART 3

This is the third (and final) post in a series on how we make decisions, what causes some of our biases, and what we can do to make better choices. Click here to see the first article and here to see the second article.

COMMON PITFALLS

In the last article on decision-making, I mentioned that according to the Heath brothers, who wrote the book, Decisive: How to Make Better Choices in Life and Work, there are four common errors in the decision-making process. They are as follows:

1. Narrow Framing - we don’t consider enough options.

2. Confirmation Bias - as humans, our tendency is to seek out information that supports what we already believe.

3. Short-Term Emotions - our feelings may impact our objectivity.

4. Overconfidence - the belief that we can accurately predict the future.

As promised, here are four strategies to avoid these common mistakes.

STRATEGIES

Dan and Chip Heath suggest these strategies (referred to as WRAP) to address the four common decision-making errors above:

1. Widen your options: According to Nobel Prize winning economist, Daniel Kahneman, we often believe that what we see is all that there is. Rather than scanning for alternatives, we focus on what is easiest to see without considering choices outside of our view. The “widen your options” strategy suggests pausing to consider a wider range of possibilities to avoid narrow framing. Think about the way a flashlight focuses a beam of light on a specific area. How much more can you see if you simply move the flashlight from side to side?

2. Reality testing: rather than assuming that you know how something will turn out, it is better to test it out. This helps to reduce confirmation bias. For example, hiring decisions are frequently made based on a series of interviews that may indicate how well a candidate gets along with people. This is not a great way to determine their skill set. More companies are now asking prospective hires to complete and submit work similar to what they will be asked to do as an employee. This ‘reality testing’ will give a far more accurate picture of whether or not the individual is suitable for the job.

3. Attain distance: When you are emotional about a decision, it is helpful to wait and take a step back. Two approaches can enhance the quality of your decision-making. One is to employ business journalist Suzy Welch’s 10/10/10 strategy. How will you feel about your decision in 10 minutes? 10 months? 10 years? This provides some perspective and avoids being too ‘in the moment.’ Another option is to think about what your best friend would do in the same situation.

4. Prepare to be wrong: This strategy counteracts overconfidence in making a decision. The future is not a single point but rather a range of possible outcomes. Looking at both best and worst case scenarios will provide you with greater insight. If you look ahead a year as if your decision was the wrong one and your project failed, a “pre-mortem’ analysis can help you assess the possible risks associated with that decision. Alternatively, if you look ahead a year and predict that your decision results in great success, you can ascertain whether or not you are prepared to handle that success.

What other decision-making mistakes have you encountered? What strategies do you put in place to avoid them?

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