Five tips for better decision-making

Filed under Columns
Larry Bloom

Author Larry Bloom provides advice for objective decision-making.

 

By Larry Bloom

Guest columnist

Having spent 30-plus years successfully growing a small company to over $700 million in revenue and selling to thousands of small business customers along the way, I have observed bad decisions and business failures from the unique vantage point of an insider. It seems, however, the reasons for failure or other significant business problems are frequently off point. If the owners really knew what they were doing wrong, they might have been able to fix the problem. Owners tend to blame sudden problems from the bank, the government, competition, employees, family members or problematic partners. Rarely do they point to the quality of their own thinking.

The Problem: Bugs in our thinking

The telltale sign of these issues is when a leader exclaims all too late, “What the heck was I thinking when I made that decision?” And likely most of us have said this at one time or another. The real problem stems from the fact that, just like computers can have bugs, all humans have unrecognized bugs in the way we think and make decisions Rather than use complex psychological terms, I call these mind-bugs—bugs in the critical internal processes that occur in the five inches between our ears. Mind-bugs can affect fact gathering, analysis, insights, judgments and decisions. And they  increase business risk accordingly. Today’s stressful, time-constrained business environment reinforces the problem. So, what causes owners and leaders to convince themselves their practices are sound when problems exist? Look no further than mind-bugs. Here are five questions to ask that will help avoid mind-bugs and improve the quality of any decision.

1.  Have I sufficiently considered how the personal stake or vested interest for each person or group involved influences this evaluation?

Interactions with groups influence our thoughts. Every organization consists not only of individuals, but a hierarchy of power among those individuals. No matter how noble the group’s goal, there is often a struggle for power beneath the surface. Personal strategies may be obscure and not apparent even to those who are using them. Mind-bugs can cause us to believe that an argument and its support are sufficient when there are actually gaps. Pausing to objectively consider the influence of the group’s definition of reality, as well as bureaucracy, power structure and vested interests will improve any decision.

2.   Do I adequately understand how my own beliefs and desires color or influence any judgments or inferences I make?

Whenever we reason, we do that within a point of view. Any flaw in that point of view is a possible source of faulty thinking and mind-bugs. Belief mind-bugs may cause us to unknowingly draw conclusions and make decisions based on limited, unfair and misleading personal interpretations of information. We can get so locked in we are unable to see the issue from other rational points of view. Belief mind-bugs are so strong that they can cause us to corrupt the noblest virtues and justify it to ourselves. You will not need to look long or deeply at religion, politics and organizations to find many examples of belief mind-bugs going unchallenged and wreaking havoc. When we pause to consider the influence of our own point of view, desires, values, principles and emotional connections, the quality of any decision improves.

3. Have I reasonably considered if there are any critical gaps in the sufficiency of the information used to support our arguments?

Mind-bugs in business can cause us to believe that an argument and its support are sufficient when there are actually gaps. This is particularly true if we have a vested interest or there is a group dynamic involved. We may present and accept data as sufficient for a decision that does not completely frame the situation in a balanced fashion as long as it supports the decision we subconsciously want to make. When we make decisions based on relevant and significant information of adequate breadth and depth, the quality improves and the risk declines.

4. Am I completely confident that the data we are depending on is accurate?

Accuracy of information is one of the underpinnings of any decision. If inputs are not accurate, then decisions will be faulty regardless of the quality of the ensuing decision-making process. We may fail to appreciate the difference between unverified information and fact. Or we may naturally tend to believe our thoughts are accurate because they are ours, and therefore the thoughts of those who disagree are wrong. Some may see and believe in patterns or connections in random or meaningless data when none exist. Others may reject new facts because they contradict entrenched rules and norms, or they may favor data because it supports what they strongly desire. Decisions are improved when they are based on clearly defined, reliable, factual, precise and fair information.

5. Should I continue with this decision if my answer is no to any of the first four questions?

Despite the fact that most decisions involve alternatives and that all decision processes involve problem structuring and evaluation, decisions differ in important ways. Most obviously, decisions differ enormously in difficulty. Most, in fact, are trivial and will not require further attention. But it’s the ones that do warrant attention that you can’t afford to miss. This “Five Question Scan” will substantially reduce risk for any decision you are about to make, and it will cultivate higher quality thinking. It does, however, require regular practice and commitment as mind-bugs will present themselves advising that this is a waste of time.

Larry J. Bloom spent 30-plus years helping to grow a small family business to over $700 million in revenue. He is the author of “The Cure for Corporate Stupidity: Avoid the Mind-Bugs that Cause Smart People to Make Bad Decisions,” private adviser to several business leaders, a board member, and an owner of a startup media and software company that promotes better thinking. For more information, please visit www.curecorporatestupidity.com.

 

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