How to Make Better Decisions By Don Peppers

“It’s not what we don’t know that gives us trouble, it’s what we know that ain’t so.” - Will Rogers  
Human beings are marvelously intelligent creatures. Unfortunately, however, rationality and scientific reasoning do not come naturally, so our decision-making is often flawed. You’re probably familiar with things like the “confirmation bias” and the “illusion of control,” but the list of cognitive biases, prejudices, and other obstacles to rational thinking is long and rich.
So the next time you’re trying to make any sort of important decision – what kind of car to get, or whether to take that job, or how your company should deal with some new technology or regulatory requirement – spend some time trying to step back from the decision itself and focus on your decision-making method, in order to get the best possible result.
In Chip and Dan Heath’s book Decisive: How to Make Better Choices in Life and Work, they’ve compiled a great deal of advice for how to overcome the natural biases and prejudices we all have. Some of the suggestions they make for getting better decisions:

• Actively search for any evidence that your current view is wrong. The best way to prove the worth of any idea is not finding more evidence the idea is right, but trying to find evidence that it’s wrong. So look for contrary ideas, or simply ask yourself what the implications would be if the exact opposite were true.
• Stand back from the decision and try to de-personalize it. For instance, if it weren’t you, personally, choosing which college to attend, or which school to choose for your children – if, instead, you were advising a friend – what would your advice be? If a colleague asked you about a business decision for their own company, rather than yours, what you suggest?
• Do a “premortem” on your decision. Imagine it’s the future and the decision you are considering has turned out to be wrong. What would explain this? What is the story? How did the situation go bad?
• Focus on process rather than analysis. Pay particular attention to your evidence-gathering methods, carefully discussing anything still uncertain, and considering perspectives that contradict senior executive’s views. In one research survey sponsored by McKinsey, better decision-making processes were found to be six times more effective than better analytical tools or financial models!

Perfecting the decision-making process is the subject of J. Edward Russo and Paul J. H. Schoemaker’s book Winning Decisions: Getting It Right the First Time. They argue that four stages are involved in making any decision, whether it involves your personal life or your business’s future: framing, gathering intelligence, coming to conclusions, and learning from experience. All decisions go through these stages, and their excellent book provides detailed guidance for improving each stage.
Importantly, Russo and Schoemaker argue that simply gathering more information doesn’t usually improve a decision. Too much data, in fact, can confuse matters or (worse) make you over-confident. And while intuition and common sense are always important, supplementing your intuition with one or two rules of thumb or guidelines is critical.
The bottom line is that the human mind is emotional and self-justifying, and for purely evolutionary reasons we are biologically incapable of ever taking a truly objective point of view on any issue whatsoever. But in recent years we’ve learned a great deal about how our brains work and how minds perceive the world. If you’re interested in reading more about these issues, I’d recommend these books:

• Seeing What Others Don't: The Remarkable Ways We Gain Insights by Gary Klein,
• Influence: The Psychology of Persuasion, by Robert Cialdini,
• A Mind of Its Own: How Your Brain Distorts and Deceives, by Cordelia Fine, and
• The Accidental Mind: How Brain Evolution Has Given Us Love, Memory, Dreams, and God, by David Linden.

KINGSMITH.