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It’s estimated that each of us makes about 35,000 decisions a day. That’s over 12 million per year. Combine those numbers with recent research by the Hay Group revealing that decision-making has twice the impact on performance as talent and skill, and it becomes clear that the ability to make wise decisions is a crucial leadership skill. Despite this actuality, many leaders allow strong emotions or mental biases to adversely impact the decision-making process. In this article, we examine the steps you can take to improve your decision-making skills.
Noticing that you’re experiencing strong emotions, such as fear, anger or excitement, is a sure sign that the quality of your decision-making may be at risk. It’s natural to respond emotionally to stressful circumstances. Severe stress typically activates a “fight or flight” response, temporarily disabling the logical part of your brain so essential to making intelligent decisions. When facing a stressful situation, it’s easy to overreact or respond illogically.
An effective method for discovering when you’re being emotional is to play the Freeze Game throughout the day. We recommend five or six times daily The Freeze Game is a powerful tool that increases self-awareness by helping you get a handle on what you’re thinking, how you’re feeling, and what’s happening with you physiologically. To implement:
1. Say “freeze” and pause.
2. Write down: what you’re thinking. What you’re feeling. What you are doing.
3. Ask yourself whether your feelings, thoughts and reactions are aligned.
4. Then ask yourself whether there is a better choice for action right now.
If you perceive that you’re emotional or stressed, focus on your breathing for a minute or two. Breathe slowly and deeply, following your breath as you inhale and exhale. As you feel calmer, you are opening up the blood flow to the logical thinking part of the brain which enables you to make better decisions. Then remind yourself that your initial emotional reaction to a challenging situation is not necessarily what should dictate your response.
A second barrier to wise decision-making stems from mental biases. Mental bias, also called cognitive bias, refers to the tendency to make decisions that are not logical, that is, not grounded in the particular facts of the current situation. Everyone has mental biases. And they’re not necessarily bad. They are shorthand principles that the brain uses to manage the thousands of decisions and actions you take in any given day. For instance, you may have a mental bias that “people are trustworthy.” This principle allows you to deal with people efficiently by assuming that you can trust them. For the most part, this mental bias is highly functional – even though it’s not entirely true.
On the other hand, there are many mental biases that are outright harmful. Racial bias, for example, is an incredibly toxic influence on decision-making. Therefore, you need to be aware of your biases to make wise decisions. Unrecognized mental biases create the illusion that you’re making an objective decision when, in fact, you’re not.
Mental biases can cause you to ignore important data, attach too much importance to certain data, or encourage you to make decisions based on misguided beliefs about yourself, your followers, or the situation you’re in. To factor in the impact of mental biases on your choices, it’s important to explore how biases can affect the accuracy of your decision-making. Exploring these mental biases is key to overcoming obstacles to flawed leadership decisions.
Overconfidence is a tendency to overestimate your knowledge, opinions, and skills. Numerous studies show that most people are overconfident. For instance, a recent survey found that 93% of Americans consider themselves to be better than average drivers, a statistical impossibility. It’s not much of a stretch to imagine that most leaders think of themselves as better-than-average leaders
Our successes often reinforce overconfidence in our leadership judgment. When things go well for us for a long time, we begin to think we’ll always be successful. We forget that success is fragile and usually requires significant effort. Overconfidence affects not only your own decision-making quality, but can have a profound impact on your organization’s culture, fostering a climate of overconfidence that permeates the entire organization.
When you are successful, other team or organization members are more likely to emulate your behavior, either because they admire you, or because your overconfidence sends the message that being overconfident is “the way we do things around here.” If overconfidence is so potentially damaging, why is it so persistent in individuals and organizations? Our work at think2perform, along with recent research, suggests that overconfidence is an asset—at least for a time. Self-confidence breeds success. The more consistently a leader is successful, the more they risk becoming overconfident. Success causes overconfidence, which generates more success. Until it doesn’t. That’s because overconfidence interferes with the openness to learning required for long-term growth. Overconfident leaders, and the overconfident organizations they create, risk becoming complacent, even arrogant. In such a climate, growth stalls and early successes are unsustainable.
1. Practice humility. Recognize that most people overestimate their abilities and accept that you are more fallible than you might like to think.
2. “Seek first to understand, then to be understood,” as Stephen Covey famously said. When others offer ideas, tap into your curiosity rather than rushing to judgment.
3. Proactively seek out feedback. Ask your co-workers and family members to share their views about your performance. That can help you identify blind spots and develop a more accurate picture of your capabilities.
Confirmation bias is a tendency to selectively pay attention to information that reinforces your beliefs, ignore information that conflicts with what you think, and interpret ambiguous information as supporting your views. Confirmation bias is most likely to affect you when dealing with highly charged emotional issues or deeply held beliefs. Though you can never fully eliminate confirmation bias, you can minimize its negative impact on your decision-making
1. Adopt a learning mindset. Assume you don’t know anything about the challenge you face. Read relevant articles, ask for input about your situation on a LinkedIn group, or sign up for a webinar on the subject.
2. Become your own “devil’s advocate.” Write down the assumptions you are making about your decision options and challenge each assumption with a counterargument.
3. Discuss your ideas with others, especially those who tend to see things differently from you. Concentrate on trying to understand their points of view, not poke holes in their ideas.
Overoptimism is the bias that can cause you to overestimate how frequently you will experience favorable outcomes and underestimate how often we will experience less desirable results. Roughly 80 percent of all people demonstrate overoptimism bias. Overoptimism leads people to distort data to the point at which their desire to make something happen far outweighs a realistic possibility of success. It’s especially hazardous for leaders. An excessively optimistic leader may influence those around them to buy into unrealistic expectations about the progress and outcome of a project or change initiative. Then, when things don’t go as advertised, followers feel frustrated or misled, undermining trust in leadership going forward.
If you’re a senior leader, it’s crucial that you guard against excessive optimism in yourself and at all levels of the organization. When things don’t go exactly as planned, excessive optimism can leave your organization under-resourced and woefully unprepared to change course.
1. Use quantitative data when planning and predicting the outcome of a decision. Benchmark your plan based on statistics such as average costs, time, or staffing required to implement decisions comparable to the ones you are considering.
2. Refine your plan by factoring in any specifics about your situation that would affect the timing or cost to achieve a particular outcome. For instance, be conservative in your estimates if the anticipated decision outcome has never been attempted before. Allow room in your plan for mistakes in estimating needed resources.
3. Practice the “premortem approach” created by the noted psychologist and economist Daniel Kahnemann: Imagine it’s a year after you’ve made a decision and that the outcome has been negative. Create a scenario about what went wrong and why. Then consider likely threats and steps you can take to prevent them.
As leader when you make wise decisions, the right people will follow you. Make poor decisions and good people will run the other way. Taking the time to recognize the emotional landmines and mental biases that affect your decision-making is a key skill that impacts your personal success and the overall success of your organization. When you use the tools described above to decide wisely, the benefits will be incalculable.
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