Even experienced leaders can make terrible decisions with catastrophic results. Flawed thinking happens when leaders have past experiences that seem applicable but aren't, when they incorrectly apply previous decisions, when personal interests cloud their judgment, or when emotions unbalance their thinking. To avoid this, insist decisions be fact-based, encourage group debate to counter biases, set up a separate governance team to approve proposals, and monitor and publicize results. Safeguards tailored to potential distortions can dramatically reduce bad calls. Standard processes often create bureaucracy and disrespect. Keep the base process simple and light, adding customized safeguards only as needed, to cut costs and build respect.
Experienced leaders often make decisions based more on intuition, imagination, and prior experience rather than through deliberate analysis of situations. In general, leaders tend to select a course of action that resembles what they have done in similar past situations, then imagine how applying that same approach to the current circumstances might play out. This process relies heavily on pattern recognition and memory rather than carefully weighing multiple alternatives. When facing a decision, most people evaluate just one potential plan at a time instead of comparing several options. The thought process typically goes: first, we take in sensory information about the situation. Our brain then scans our memories to find comparable experiences, while also recalling the emotions associated with the outcome of taking a certain action in the past. Next, we assess what type of response the current situation calls for based on this pattern recognition process. We look for cues to check if our initial assessment seems accurate. Then, we consider the plan of action that surfaces from our recollection of that past situation, including the emotional tags we have linked to the results of that plan. In other words, if taking that action in the past yielded positive emotions, we view repeating it more favorably now. However, if negative emotions arose last time, we may seek an alternative plan. We imagine applying this potential plan to the current circumstances, using our knowledge of how things generally operate in the world. If we foresee any problems arising, we cycle back to select a different course of action to evaluate in the same manner. In general, experienced people rarely contemplate more than one plan at once. While efficient when our experiences reliably point us toward successful outcomes, this one-plan-at-a-time approach has significant drawbacks: Past experiences can mislead when circumstances have changed substantially. Poor prejudgements distort our ability to forecast results accurately across different options. Personal incentives may steer us toward suboptimal plans that serve our own interests over the organization's. Relying predominantly on intuition works well for quick decisions in familiar territory, but breaks down with unfamiliar, ambiguous situations open to various interpretations. It prevents thoroughly exploring and comparing all alternatives based on clear, objective criteria. With only one plan under consideration driven by the leader's preference, subordinates are unlikely to rigorously analyze potential flaws since overriding the boss seems doubtful. In essence, the one-plan-at-a-time decision-making process most leaders utilize does not sufficiently safeguard against errors in judgment. It efficiently leverages experience, knowledge and emotions to choose a path forward when those factors point toward the right solution. However, it lacks checks and balances to question and vet the leader's proposed course of action when conditions exist that could lead to poor decisions. Without steps deliberately designed to challenge the leader's thinking, hidden flaws often go undetected. When facing uncertainty or incentives potentially skewing the leader’s judgment, supplementary practices must support more rigorous examination of multiple options to avoid missteps. In summary, while leaders generally rely on familiar approaches that have worked well in the past, this instinctive process leaves them vulnerable to oversights when the current situation differs substantially from prior experiences. A more balanced methodology explores multiple alternatives using clear decision criteria rather than defaulting reflexively to the leader’s preferred plan without thorough scrutiny. Embedding practices to consciously stress-test initial assessments and surface hidden risks better equips leaders to navigate unfamiliar terrain.
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