Decision making affects everything you do from the moment you wake up in the morning. Objective decision making is key in many areas including product development, hiring new employees, strategic planning, making investments of time and money, making a change, to small decisions like stopping to get a cup of coffee on the way into work. As an entrepreneur or a corporate leader your ability to make wise decisions is critical for the success of your business and also for your career and ability for future advancement.
Avoiding Fatal Flaws in Decision Making
Without effective decision-making skills and strategies even the most talented and brilliant can experience crushing disappointments. It is clear that the ability to make sound decisions is critical in today’s world of quick fixes and superficial solutions. When a crisis occurs or tough choices need to be made, the ability to make accurate judgments is essential. Decision, choice or judgment errors can have grave consequences. Here are some tips that can help you avoid fatal flaws in making sound decisions, no matter what the situation.
Top 5 Decision Making Warnings
1. Emotional Decisions
Emotions often override our better judgment and ability to make sound decisions. When a situation triggers an emotion, need, or temptation, we will very often make a bad decision. Unfortunately many sport stars clearly demonstrate how emotion can lead to bad decision-making and ruin their lucrative careers.
2. Time Pressure Decisions
Time pressure or clock crunching leads to faulty decision- making and bad choices. Time restraints puts added stress on the decision-maker, and often times force the person to make a judgment based on incomplete analysis. When a quick decision needs to be made it is often a bad choice.
While confidence is good in many situations, having too much confidence can work against you when it comes to making good decisions. The over-confident person feels that if his or her actions will influence a situation and the outcome will be positive, then the resulting outcome will be judged as overly high. Many times people are blinded to alternatives and other points of view because of over-confidence bias. This type of individual is often surprised to learn that their probability judgments are incorrect and their ability to accurately predict outcomes is unrealistic.
4. Reluctance to Ignore Invested Costs
The fear of wasting money and time invested in a project often prevents us from looking at the project objectively. For example: A manager has sunk $20,000 into a project that is not delivering on its promises. Choice one: you scrape the project and start again. Choice two: you sink additional money, time and company resources, hoping that the project will deliver. In most cases, because of cost bias, choice two is the road that is followed. In hindsight you knew the project was doomed for failure. On paper this appears to be a foolish mistake- however this scenario is all too real.
5. Social Harmony Bias
The influence of office politics can hinder discussion on issues. The expectation to conform creates a perception that the leader is unlikely to change their mind and is not open to debate or suggestions. In some cases employees who challenge ideas and express their views are given warnings and poor reviews for not being a “team player.” One symptom of social harmony bias is if there is little conflict and everyone readily agrees to a decision.