How can we improve our decision making?
In our first blog in the Decision Making series we looked at how various psychologists and economists have explored the ways in which biases affect our decision making.
If we all behaved flawlessly we would not be impatient, relevant information would not be overlooked and cost and benefits would always be weighed accurately. Unfortunately, as we know, this isn’t the case! But we do know that our decision making could be made much better.
In the second of a three part series we are going to look at how we can improve the way we make decisions. Ultimately, errors made by biases in decision making lead to people choosing to recruit the wrong person, participate in pointless conflict, date the wrong person and buy those unwearable expensive shoes. These decisions can have massive costs financially, emotionally and on our time.
So why do we make bad decisions and how can we make more effective, salutary decisions? Here are our thoughts on how you can become a decision-making mastermind:
1. Gather as much relevant information as you can
Before we make a crucial decision we need to confirm that all necessary information and data has been gathered and from a reliable source.Seek out the relevant data that you know to be correct and don’t be afraid to question it. Trusting the wrong information can be worse than having no data at all.
Try to establish relationships that enable you to draw on other people’s expertise too. It has been proven that when leaders have involved others with the necessary expertise, experience and knowledge, the quality of the decision improved.
2. Set a timescale and don’t procrastinate
We make simple decisions every minute of the day and sometimes we can even tick them off our “to do” list and feel like we have accomplished something. However, when we are responsible for making a difficult decision, we often put it off.
It is crucial not to delay making difficult decisions. Instead, block out a part of your day each day to weigh up the different solutions you have at your disposal. This should include looking at the pros and cons of each solution and the potential outcomes it may produce.
Indecisiveness or paralysis by fear of being wrong is often what stops good leaders from making good, timely decisions. When we are faced with a complex decision, it’s easy to continue to look for more information to see if the “right decision” jumps out at us.
Indecision can have worse consequences than the wrong decision.
3. Don’t let your ego get in the way
Being too personally invested in how a decision will affect us, whether it’s how we will look or how the consequences will feel, can make decision making difficult. In life, we often have to make decisions that may not be the best thing for us personally but are the best options for our business or people around us.
The key to making the right decision for the right people is leaving our egos behind and staying objective. Involve other people in the decision making process who you know will provide an objective view.
4. Don’t discount the future
Max Bazerman, a Professor of Business Administration at Harvard Business School, claims that “people act irrationally in that they overly discount the future.” We are often encouraged to “live in the moment” but we should think more about our future when making decisions.
As humans, we often want what is rewarding in the present. We want instant gratification now and to be patient in the future (one of the reasons why a lot of us fail at dieting). We often say to ourselves “I will have this piece of chocolate today and start my diet tomorrow” but tomorrow often doesn’t come.
The economic man model suggests we have “perfect self-regulation in pursuit of our future goals” and are “unswayed by bodily states and feelings”. However, every day we disprove this theory by buying things we can’t afford on a credit card instead of saving for our retirement or smoking another cigarette in the hope that we will quit next week. One thing we know for sure is that if we want to be successful, our decisions made in the present need to connect with where we want to be in the future.
5. Don’t be afraid to take risks
Experience is crucial in providing the foundation to making a good decision. On the other hand, having confidence in yourself to take risks and the ability to learn from failure is also important for becoming a better decision maker.
When we make decisions, we tend to prefer making a decision based on certainty despite a potentially greater outcome an uncertain option may bring. That is because, as human beings, we “don’t mind having but we don’t like losing.” People have a strong preference for certainty and are willing to sacrifice gains to achieve it.
Obviously, when it comes to making a decision we shouldn’t be reckless. Look at what the benefits of choosing the riskier option will be against the consequences if it is the wrong option as well as what will be sacrificed if the safer option is chosen. It is also helpful to imagine the worst case scenario of the decision you make to give you a chance to put in place any contingency plans in the incident of making a wrong decision.
There are many reasons that decision making is complex, and the research into improving how we make decisions still carries on. However, being aware of the common mistakes made as discussed above will more than likely lead us down the path of good decision making. It is important to keep a record of the steps you made to come to an important decision so that if the outcome is not as expected, you can reflect on why it failed and ensure you don’t make the same mistakes again. Look out for our next blog on how to influence others’ decision-making…