Untangling Your Organization’s Decision Making

Any organization can improve the speed and quality of its decisions by paying more attention to what it’s deciding.

The Effective Decision

Effective executives do not make a great many decisions. They concentrate on what is important. They try to make the few important decisions on the highest level of conceptual understanding. They try to find the constants in a situation, to think through what is strategic and generic rather than to “solve problems.” They are, therefore, not overly impressed by speed in decision making; rather, they … [ Read more ]

Helen Mayhew, Tamim Saleh, Simon Williams

Just because information may be incomplete, based on conjecture, or notably biased does not mean that it should be treated as “garbage.” Soft information does have value. Sometimes, it may even be essential, especially when people try to “connect the dots” between more exact inputs or make a best guess for the emerging future.

To optimize available information in an intelligent, nuanced way, companies should strive … [ Read more ]

Ken Favaro, Cass R. Sunstein, Reid Hastie

Leaders also have to understand that group decision making falls into two distinct steps, which require different approaches. In the first step — identifying solutions — divergence is necessary. The group has to be encouraged to explore boundaries, search broadly, and expand its thinking in order to find the best options for the problem at hand. But the second step, in which the group selects … [ Read more ]

How Our Company Learned to Make Better Predictions About Everything

our approach to prediction seems stuck in the past. Most business forecasts fail to include measurable outcomes and are not recorded, so it is hard to know if we are even getting better at them.

Research from organizational psychologist Philip Tetlock, the co-author of Superforecasting, suggests an alternative. Studying forecasting tournaments where anonymous experts predicted future events, Tetlock found that some forecasters could … [ Read more ]

Tool: Use Unbiasing Checklists

Research suggests that checklists can help reduce the influence of unconscious bias in decision making. Google has tested checklists like these to highlight and remind people of common unconscious biases and provide employees with targeted unbiasing strategies.

Adam Grant

Charlan Nemeth at Berkeley […] finds is that people aren’t actually persuaded by devil’s advocates most of the time. One, they don’t argue forcefully enough because they don’t really believe the position: it’s “All right, I’m going to play a role here. I’ve checked the box, and now I can go right back to the majority view.”

And then, second, even if they do argue with … [ Read more ]

Adam Grant

There’s an amazing study by Justin Berg, a Stanford Graduate School of Business professor. He looks at circus performances—think Cirque du Soleil—and collects all these original acts done by different kinds of circus artists: jugglers, dancers, acrobats. He asks people to evaluate their own performances, and then he asks managers to evaluate them as well, and then he has performers judge each other’s videos.

Finally, he … [ Read more ]

Michael Lewis

The question is why, having identified these cognitive illusions or whatever you want to call them, they persist. We don’t pay more attention to them. […] It’s very hard for a person to self correct. What you can do, Amos [Tversky] would say, is change your environment in which you make decisions, so people are more likely to point out to you if you’re making … [ Read more ]

Michael Lewis

Although life constantly puts you in these probabilistic situations, these situations that might lend themselves to statistical analysis, we don’t do that. People aren’t natural statisticians. They do something else. What they do is tell stories. They find patterns. Danny [Kahneman ] and Amos [Tversky] were showing the way the mind, when it’s telling stories to resolve uncertainty, makes mistakes.

Mark Chussil

We narrow our decision-making frame when we believe we know what the future will look like. We implicitly assert that everything is locked in except for what we will do, and so we ask this simple, efficient question: “What should we do?”

Should asks people to spot and advocate the one right decision. It treats decision making as a debate. It drives toward closure. We need … [ Read more ]

Wouter Aghina, Aaron De Smet, Kirsten Weerda

The idea behind agile governance is to establish both stable and dynamic elements in making decisions, which typically come in three types. We call big decisions where the stakes are high Type I; frequent decisions that require cross-unit dialogue and collaboration, Type II; and decisions that should be parsed into smaller ones and delegated as far down as possible, often to people with clear accountability, … [ Read more ]

David Brooks

We don’t decide about life; we’re captured by life. In the major spheres, decision-making, when it happens at all, is downstream from curiosity and engagement. If we really want to understand and shape behavior, maybe we should look less at decision-making and more at curiosity. Why are you interested in the things you are interested in? Why are some people zealously seized, manically attentive and … [ Read more ]

Francesca Gino

When evaluating others’ actions, most people focus more on the outcome of decisions than on intentions, a phenomenon that psychologists call outcome bias. A decision […] is often judged to be lower in quality when it leads to a poor, rather than a good, outcome. The outcome bias is costly to organizations. It causes employees and leaders to be blamed for negative outcomes even when … [ Read more ]

Art Kleiner

Any decision made in business is a bet about the way the world works. And until you understand the theory you’re betting on, you can’t really test the decision or improve it.

Neill Occhiogrosso

For every “make decisions quickly” there is an equally compelling “make decisions carefully” directive. In The Halo Effect, one of the best books I’ve ever read on business, and on critical thinking more generally — author Phil Rosenzweig talks about how the same business decision can be described as “decisive” or “impulsive”, a strategy can be considered “innovative” or “straying from the core.” There are very few, … [ Read more ]

Daniel Kahneman

Intuition is very good — provided that you have [first] gone through the exercise of systematically and independently evaluating, the constituents of the problem. Then when you close your eyes and generate an intuitive, comprehensive image of the case, you will actually add information.

Carl Spetzler, Hannah Winter, Jennifer Meyer

Conventional thinking […] confuses a good decision with a good outcome. Most will say, “We cannot know how good a decision is until we’ve seen the results.” That makes no sense in a world of uncertainty and unforeseeable events that decision makers cannot control. A good decision, for example, might be undermined by poor implementation. Or events on the far side of the world may … [ Read more ]

Adam Grant

A lot of people attribute groupthink to cohesion. They think that if we’re too close, if we trust each other too much […] then we’re not going to challenge each other. That turns out to be false. Cohesive groups often make the best decisions. People frequently when they trust each other are willing to challenge each other and say, “I know this person is not … [ Read more ]

Erin Meyer

At a deep level, no matter where we come from, we are driven by common physiological and psychological needs and motivations. Yet the culture in which we grow up in has a significant bearing on the ways we see communication patterns as effective or undesirable, to find certain arguments persuasive or lacking merit, to consider certain ways of making decisions or measuring time “natural” or … [ Read more ]