Path to better business decisions

We as leaders often fall to our own biases, we are human and we cannot ignore that we have these biases interacting with our decisions.  I first want to highlight a few of the biases and then map out some solutions to help us make better decisions as we navigate around these very biases that hinder our effectiveness in making decisions

5 Biases that hinder great decisions:

Confirmation Bias – We love to be right.  We go so far to look to confirm our own beliefs and easily ignore or discount those positions that are alternative to our beliefs. Many times, this bias sets us up to confirm regardless of failure or success that we were right!  Watch out for this Bias, we do this one so naturally that we almost always need to surround ourselves with a very capable strong-willed opposition that we respect to break the habit.

Availability Bias – Often we only search out what is readily available and therefore overweight our decisions on these factors.  What we saw or heard in recent history is easy to recall and therefore we give ourselves permission to skip steps because we remember something and therefore it must be right.  If we find data that supports a position, we start to become agreeable with it and start to not find any support of alternate positions.

Anchor Bias – We think what we know to be factual and therefore we usually stick pretty close to our current reality and have a tough time breaking out of our current state of mind.  The trouble is that our mind often Anchors on something that is not based in fact and we treat it as though it is.  We could simply been told something recently and without realizing it our mind took that as an Anchor.

Over Confidence Bias –  Yes, we have confidence, but be wary, sometimes it is our flaw. We cannot see any failure with our own ideas because we thought them up.  Many flawed decisions come from we were successful in a decision in the past and as such we believe we are immune to bad decisions.  This bias needs us to slow down, consult with our team, and consider how the decision can fail and why.

Speed Bias – This is in effect a multiplier of our biases. We want to solve something fast and as such we are likely to fall prey to our biases as we are in the fast lane.  Many decisions made in hast are full of biases.  We need to get to a decision and as such we start to skip any steps that can solve for these and the many other biases that we are likely to encounter.

5 STEPS TO PUT YOU ON THE PATH OF BETTER DECISIONS

1>See more perspectives at multiple levels

• Walk the walks of the customer – Live the Customer experience at least twice from the start to the finish, one of you and one or more with an industry competitor or competitive industry
• 4 inside corners – get feedback from 4 different internal perspectives (operations, sales, marketing, and finance)
• 6 outside views – get feedback from 6 folks from outside your company and industry.

2>Find more than one alternative

• same resources – what other alternatives could you spend the same resources on
• follow the same process and test each – don’t skip steps on any alternative, be true to the process
• really consider more than one – Decisions are better when you add at least a second alternative to the mix….but you really need to find and consider it.

3>Follow a decision-making process

• Do a GAP assessment – Look at today’s people and organizational competencies vs where they need to be for success
• Watch your questions – find and use expansive questions and watch out for the questions that are full of supporting our biases.
• Find the negative view – Give ownership to an opposing view that you must consider. This is tougher than it sounds as most will fall to another bias – agreeability bias where they will tend to agree with others around them.
• Consider Risks of incorrect assessment – What are the risks of failure of the alternatives being considered.  Build this into the process, it will ensure you are more ready to take on the challenges.

4>Test it with a minimum viable product – prototype it

• Pre-development of the final product – keep the initial investment small, test the market, test the idea, test the solution
• As soon and as often as possible – don’t wait till you are done development. Get testing as early as possible
• Capture, improve and retest – take what is learned out of tests and make the final product better. That way when you get to launch, you are already running with a solution that is better than your original idea.

5>Commit to the challenges beforehand

• Double to triple the time – Look at whether the team and the project survive if the time estimate was entirely wrong. How will you decide the projects fate when this happens.
• Double to triple the resources – Look at whether the team and the project survive if the cost estimate was entirely wrong. Will you commit to the additional resources and with what condition?
• When or why do you change the decision – identify today the factors before you get there. It will help you make a more informed decision today and have you or your team ready for future decisions that may happen in the future.

Derived from readings of Chip and Dan Heath (Decisive), Daniel Kahneman (Thinking Fast and Slow), Luc de Brabandere and Alan Iny (Thinking in New Boxes) and the “5 common unconscious Biases that lead to bad decisions” Stephanie Vozza article published on Fastcompany.com on 04 16 2015