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Training on bad decision making – are you serious?

May 3, 2017

You may think the last thing you need is training on what contributes to bad decisions. But in business, decision making is often done under time pressure without all the information required. Recognising some of the pitfalls allows us to challenge and improve decisions before they are implemented.

People are prone to all sorts of thinking and judgement errors including over confidence. We may take pride in our gut feeling, our intuitive understanding, our experience and skilful and insightful assessment of the current situation. Unfortunately we are often wrong. And that is before we start to think about how to get better at foresight – anticipating the future – for instance using Philip Tetlock and Dan Gardner’s work Superforecasting: The Art and Science of Prediction.

Academic work by psychologists such as Kahneman and Tversky has shown just how bad we can be at making good decisions. We naturally reject uncertainty – partly because it makes us uncomfortable and partly it is how our brains work. We suffer from various cognitive biases; over one hundred types have been identified. Here are a few and they make us feel more certain than we should.

  • We think we know what causes what and are confident we can see clear patterns when others see confusion. The danger is we attribute cause and effect to random events.
  • We tend to think that what we see and hear is all the information there is and act without further assessment; in our optimism we may ignore any information which suggests an action may be unwise.
  • When we do take note of other information we look for things which confirm our thinking and ignore anything that refutes it.
  • A focus on one thing may occupy so much of our attention we miss something in clear view in front of us. Check out this selective attention test where observers fail to see a man in a gorilla suit walking through a group of ball players.
  • When answering a complex question we may substitute a simpler one and answer that instead without being aware we have done it.
  • We are naturally poor at estimating probabilities. Groups tend to make more risky decisions than individuals and groups can go along with a course of action they don’t like because others seem to be going along with it. Diversity of people in a group and, more importantly, diversity of thinking should help reduce this particular bias.
  • Most of us, particularly experts, tend to be over confident. Our biases can also be reflected in our speech and writing and that may be a poor influence of other people’s decision making.
  • Finally, we also suffer from bias blind spot meaning we see ourselves as less biased than others and think we are more in control than we are.

In short we can make bad decisions more easily than we may realise and expose ourselves, teams and organisations we work with to unnecessary risk.

It is possible to reduce our susceptibility to these common errors in thinking through training. SAMI Fellow Professor Paul Moxey has developed workshops for business leaders. They cover:

  • The 12 key cognitive biases which cause bad decision making
  • The Columbia Shuttle Disaster and other failures affected by cognitive bias
  • How we can spot when a bias might cause a bad decision
  • New ways of thinking that reduce susceptibility to bias
  • Using bias free language
  • Being more comfortable with uncertainty and working with it
  • A practical process for eliminating bias errors
  • Ten tips for boards

They are a companion to the ‘Dealing with uncertainty’ Workshop, and can also be run in-house with an organisation. For further information contact Prof Paul Moxey at paul.moxey@samiconsulting.co.uk

Written by Paul Moxey, SAMI Fellow.

The views expressed are those of the author and not necessarily of SAMI Consulting.

If you enjoyed this blog from SAMI Consulting, the home of scenario planning, please sign up for our monthly newsletter at eSAMIsignup@samiconsulting.co.uk and/or browse our website at http://www.samiconsulting.co.uk

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