“I just can’t decide…”

“Why do so many business leaders make poor decisions – sometimes over and over again?”

Drawing from the work of Harvard Business researchers Gino, Bazerman, and Shonk, this was the question I recently explored with a group of executive leaders who shared their own challenging experiences with decision quality.

One executive I spoke to confessed to making a decision that nearly derailed one of their company’s biggest initiatives. I’ll say more about this particular situation in a moment.

The root of this problem stems from a simple concept: we all bring our personal baggage (bias) to bear when making big decisions. Yet, most of us either don’t realize we do it or aren’t fully aware of the biases we share.

Key Drivers of Quality Decisions

Let’s unpack this to better understand the two key drivers of quality decisions. First, we must strive to be more self-aware. What experiences have shaped our beliefs? What influences have molded our thought processes? When can these get in our way?

But being more self-aware is only half the battle. Second, leaders must have processes in place to not only manage their known biases, but also remain observant to their behaviors. Are you improving in one area but not another? What is at the root of your most challenging baggage?

Bias #1: Overconfidence

It helps to understand a few of the top biases we all have likely exhibited or seen get in others’ way. The “mother of all biases” is driven by ego – overconfidence. Nearly everyone has been blinded by this bias at some time in their life and career. It’s not supported by objective facts, but it feels as if it is…it’s completely irrational.

Overconfidence can manifest itself in many ways. One of the most common is to have an inflated belief in our own abilities or talents that makes a poor decision more likely. For example, a leader who has been rewarded for taking on and successfully delivering on a big project might believe they’re capable of performing the feat again, even if the new project is not as closely aligned with their expertise.

Bias #2: The Escalation of Commitment

Have you ever heard the cliché, “don’t throw good money after bad?” It exists because of another common bias – the escalation of commitment. Human beings tend to continue down a particular path, even as evidence mounts that another should be pursued. We “up the ante” believing we made the right decision in the first place and are afraid of now admitting that was not a quality choice.

Coming back to the story I mentioned earlier, one executive realized they were unintentionally sabotaging their company’s biggest initiatives. A consultant had originally recommended three paths for them, one of which was inherently riskier than the other two, but the potential upside was quite attractive from a creative perspective and offered a real point of difference – so they chose that path.

Several red flags came up during due diligence, but they continued forward. Since they had already made a commitment in their mind and mentally offloaded the risk, new risks seemed, well…less risky. As they recounted this story, they quipped that their bias was winning! Only by pausing and bringing several colleagues in to consult were they able to see the looming danger clearly enough to alter our course and take a safer path.

Bias #3: The Confirmation Trap

The confirmation trap is one of the top biases impacting decisions and is more common than ever in our divided ideological landscape. If you only watch one news outlet or get your information predominantly from one or two specific individuals, you may fall prey to this bias. It takes advantage of our nature to seek information that confirms beliefs we already have or support, rather than listen to a broader perspective. You know you’re in the confirmation trap when you quickly arrive at a decision based on a narrow data set or because you “heard it from X, so it must be true.” In the example above, the executive was thankfully able to solicit and remain open to alternate perspectives to combat the confirmation bias.

Overcoming Your Biases

Do any of these decision-making challenges sound familiar to you? Here are a few quick tips to mitigate these challenges:

1. Actively question your beliefs about yourself and seek out objective feedback.
2. Keep your eyes open for signs you’re becoming overly committed to a failing project. And, don’t be afraid to pivot even if you’ve invested heavily – sunk costs should not play a part in your thought process.
3. Seek out and be open to new information that may be challenging to your beliefs.

In conclusion, making quality decisions requires both self-awareness and the ability to manage our biases. Overconfidence, escalation of commitment, and the confirmation trap are just a few of the biases that can lead us astray. By actively questioning our beliefs, keeping an open mind to new information, and staying observant of our behavior, we can improve our decision-making skills. So next time you’re faced with a tough decision, take a step back, reflect on your biases, and strive to make the best decision possible. Remember, the quality of your decisions can make or break your success.

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