At what age should you marry?
My friend’s daughter is 19.
She’s getting married next month.
Religious Jews marry young.
Everyone is delighted.
Her older sister did the same thing.
She was a mother at 20!
I wished her Mazeltov.
Still, I wondered…how do you make such a big decision?
At the tender young age of 19!
Then I thought how do you make any decision? Especially for leaders. After all, a leader is only as good as the decisions he or she makes.
My client John sits on a number of boards.
He tells me how he does it.
Sometimes he waits to see how things fall.
Other times he’ll make a call based on the information he has.
If new information emerges,
He’ll make another decision.
He’s happy if he gets it right 60% of the time.
He says they’re good odds.
How can you improve that?
Here are three tips for you to add to your decision-making arsenal…
1. Recognise that a decision is a process, not an event
Harvard Business School researchers David Garvin and Michael Roberto find that leaders who make poor decisions hold onto the fantasy that decisions are events only they control.
In contrast, the leaders who get this all-important decision-making job right see it differently:
It’s a process, one that unfolds over weeks, months, or even years; one that’s fraught with power plays and politics and is replete with personal nuances and institutional history; one that’s rife with discussion and debate; and one that requires support at all levels of the organization when it comes time for execution.
2. Consider how you make the decision
- Are the alternatives clearly defined?
- Was the right information collected?
- Were the costs and benefits accurately weighed?
- Have you done your premortem? Thinking through the possible outcomes and what could possibly go wrong (as best you can, this isn’t hindsight).
- Have you adopted a diverse approach to your problem solving?
Juliet Bourke of Deloitte highlights the importance of diversity for problem solving. She says better decisions come from taking a structured approach where you take these six perspectives into account – outcomes, options, risk, impact on people, evidence and process.
Well, one bias, as we become more senior, is to focus on outcomes and options. Yet, the research shows that taking all six aspects into account results in better decisions.
3. Mind your unconscious biases
Following on from Juliet, there are even more biases that behavioural economists love to talk about.
Here are the eight psychological traps John Hammond, Ralph Keeney, and Howard Raiffa wrote about in HBR in 1998. Nothing’s changed:
- The anchoring trap where you give disproportionate weight to the first information you receive.
- The status-quo trap biasing you toward maintaining the current situation–even when better alternatives exist.
- The sunk-cost trap inclines you to perpetuate the mistakes of the past.
- The confirming-evidence trap leads you to seek out information supporting an existing predilection and to discount opposing information.
- The framing trap occurs when you misstate a problem, undermining the entire decision-making process.
- The overconfidence trap makes you overestimate the accuracy of your forecasts.
- The prudence trap leads you to be overcautious when you make estimates about uncertain events.
- The recallability trap prompts you to give undue weight to recent, dramatic events.
Decision-making isn’t easy.
Yet, it’s so easy to get it wrong.
So…be mindful of these eight traps…consider how you make your decision…and remember, a decision is not an event, it’s a process.
And like John, don’t be afraid to change your mind when new information emerges.
If it helps, think of your decisions more like a science experiment.
Try it out. If it doesn’t work, try something else.
As the saying goes:
“half my advertising works; I just don’t know which half”.