Making good decisions requires avoiding common pitfalls like rushing to judgment, misusing resources, and repeating past mistakes. This leads to traps like seizing the first idea, ignoring potential problems, lacking clear objectives, being unwilling to consider better ideas, selectively analyzing information, minimizing ethical concerns, and not learning from errors. Humans often rely on flawed tactics that feel right but fail frequently. Simply replacing these knee-jerk approaches with more conscious, open-minded ones can significantly improve outcomes. Research indicates at least half of major organizational decisions disappoint, so increasing decision quality through deliberate best practices is essential for performance.
Making poor decisions is very common in business. An analysis of 400 business decisions made over 20 years found that half of them were bad decisions. The analysis was limited to publicly discussed decisions, so the actual number of poor decisions is likely even higher. There are three main pitfalls that lead to these poor choices: using decision-making tactics that have failed in the past, committing resources prematurely before having all the necessary information, and spending too much time and money trying to justify a bad decision rather than moving on to a better option. Many managers remember their past successes but do not systematically study their failures to understand why certain decisions did not work out. As a result, they do not spend enough time considering how to make good decisions. Best practices for decision-making are not widely known or discussed. So when a new decision needs to be made, managers do not consciously choose tactics and processes that have worked well previously. Another common trap is rushing to move forward with the first idea that comes to mind without properly evaluating other options. As the pressure to deliver results increases, decision-makers take shortcuts or copy what has worked in completely different contexts. Then they have to spend far more resources later to fix problems that would have been avoidable with a more thoughtful upfront approach. Some managers go too far in the other direction. They spend so much time analyzing a situation that they never get around to acting. This often happens when someone is trying to justify moving forward with their own pet project. Expensive evaluations will be conducted to show that their idea could work and be profitable. In these cases, the analysis becomes more important than actual results. To avoid these poor decision-making pitfalls, managers should adhere to proven, best-practice tactics at each stage of the process. Debacles are more likely when unreliable or risky practices are used. Instead, good decision-makers actively search for new ideas aligned with their goals and evaluate options impartially. They also treat failures as learning experiences to improve future decisions. And they manage potential roadblocks proactively so that plans can actually be implemented. It is also important to stay focused on the key issues rather than rushing to move forward. Allowing adequate time upfront for thoughtful analysis generally leads to better outcomes than having to spend much more time and money later fixing problems. When there is pressure to act quickly, smart decisions rarely result. It is more effective to invest time developing a solid solution that addresses critical issues before moving forward. In many debacles, more resources were spent trying to justify a quick fix than were originally used to make the decision. Being preoccupied with defending a desired course of action takes attention away from fully investigating alternatives and reconciling differing viewpoints. Typically, the best decisions involve substantial upfront investment to thoroughly analyze issues, identify all viable options, and develop solutions that meet stakeholder needs. Allocating resources to secure necessary cooperation is also key for successful execution. In summary, poor decisions often follow a chain of events stemming from using unreliable tactics, prematurely committing resources, and throwing good money after bad to justify the chosen course of action. These blunders lead managers into traps like failing to reconcile differing perspectives, not addressing stakeholder interests, providing vague direction, limiting exploration of remedies, misusing analysis, ignoring ethical concerns, and failing to reflect on and learn from past experiences. When caught in any of these traps, a bad decision can turn into a much larger debacle. The chances of success greatly improve when managers uncover hidden issues, manage barriers, define desired outcomes, widely search for and encourage innovative ideas, and estimate benefits and risks of options tied to expected results. Creating win-win environments and incentives is critical so that organizations can learn from failures rather than repeating mistakes.
book.moreChapters
