Is what you see all there is?
Let’s face it: All of us, regardless of position or authority, face difficult decision-making. It’s the result of increasingly complex business dynamics, less certainty, a faster tempo and market disruption. That means higher risk assumptions and decisions.
First, let’s recognize that there are several pervasive temptations that lie in the way of clear thought and direction. Chief among these are overconfidence, confirmation bias, myopic perspective, and what can be called emotional hijack.
Live by poor assumptions, die by bad decisions
Overconfidence is self-explanatory. We’ve all been there. For example, hiring the wrong employee or ignoring the rise of a competitor. The list goes on. A scorecard of early business successes that embolden us toward riskier decisions makes matters worse.
Confirmation bias may be a bit trickier because it’s the unconscious behavior that places more credibility on information consistent with our own beliefs, yet discounts contrarian information. Another way of describing this is “group think.” A classic example was the 1986 Space Shuttle Challenger disaster, where a small army of some of the brightest minds in the world decided to launch with little regard to the outside concerns over the booster rocket O-rings.
A myopic perspective on an issue will be just as problematic as the above two. More often than we might think, we find people with leadership responsibilities falling prey to a narrow perspective. We have a tendency to be so close to a problem that it clouds important insight leading to a panoramic understanding of the challenge at hand.
The tyranny of the emotional hijack is difficult to quantify, but easy to observe. Put another way, these are decisions made from the heart first, with logic trailing far behind. An example might be buying that new car because it just “speaks” to you, only to find that you end up with ownership costs that strain your budget.
What’s the fix?
Assuming that we all will make bad decisions at times, there has to be a way to do things better, particularly when decisions are made during extreme uncertainty.
Challenging decisions can benefit from the premortem technique. This is a devil’s advocate thinking exercise, with nothing off-limits, to vet out a decision before it occurs. The key is to “bake in” disagreement and be honest about potential downside risks that may have been overlooked or underestimated.
Another debiasing technique is to conduct a more formal scenario-planning exercise, in which executives put themselves in their competitors’ shoes. The beauty of this role-playing is to find ways to effectively put your own company out of business, without incurring the consequences. Greater success will evolve out of this exercise when the participants involved don’t have an internal bias favoring a presumptive decision.
A third technique is to reality-test assumptions in which you put some distance between you and the problem, collect trustworthy data and talk to people who have “been there, done that.” This can open up rich veins of opportunity never before considered.
A fourth alternative is peer review, which folds in the best parts of the three “fixes” above. The most elegant model centers on a team of experienced, battle-tested peers. And without the political spin or bureaucracy, they are free to ask tough questions, find clarity, and bring fresh perspective without an inherent bias.
This is a team environment in which everyone included is comfortable with full disclosure about what’s really going on. They accept the team’s wisdom and advice, and they’re committed to self-improvement. The TEC organization has modeled and mastered this approach for nearly 60 years.
Don’t drink your own Kool-Aid
As with most things in life and business, we need a system or process to guide us toward well-reasoned, logical decisions on important matters. And researchers have compiled significant evidence that indicates a process counts more than analysis by a factor of six. Knowing this, intellectual curiosity and respectful confrontation become an improved pathway for finding the truth.
-George Satula is an executive leadership coach working primarily as a TEC chairman, leading three CEO mastermind groups in southeastern Wisconsin (TECmidwest.com). He is also a speaker and leadership development consultant. He can be reached at (262) 786-7400 or GSatula@TECbuildsLeaders.com.
