Posts tagged: decision making

Blinded By Certainty

blindfoldedIn reality, very little in our lives is absolutely certain. We can be certain the sun will rise in the east and set in the west. We can be certain death will follow life. And we can be pretty darn certain Steve Jobs will wear a black turtleneck and jeans at his next public appearance.

But we’re certain about a lot more things than we should be.

A recent University of Michigan study by Brendan Nylan and Jason Reifler shows that the more certain we are about particular ideas or situations the more we become blind to facts that discredit our certainty. In fact, in many cases opposing facts are not just ignored but actually strengthen our prior beliefs.  A recent Boston Globe article provides an excellent summary of the research.

From the article:

Most of us like to believe that our opinions have been formed over time by careful, rational consideration of facts and ideas, and that the decisions based on those opinions, therefore, have the ring of soundness and intelligence. In reality, we often base our opinions on our beliefs, which can have an uneasy relationship with facts. And rather than facts driving beliefs, our beliefs can dictate the facts we chose to accept. They can cause us to twist facts so they fit better with our preconceived notions. Worst of all, they can lead us to uncritically accept bad information just because it reinforces our beliefs. This reinforcement makes us more confident we’re right, and even less likely to listen to any new information.

Both the research and the article focus primarily on our political viewpoints, but while reading I couldn’t help but think of people I’ve come across in the business world who were unbelievably certain about their viewpoints based on information or experiences that seemed less than obvious to me. I immediately thought of dozens of people, and I bet you’re thinking of many such people now.

In fact, it was so easy for me to think of other people that fit the bill that I couldn’t help but think the man in the mirror was not immune to this universal human fallacy.

In my experience in the business world, we often assume with undue certainty that past experiences will reflect future possibilities. We say things like, “We tried that before and it didn’t work” or “I know what our customers want.” While our past experiences are extremely valuable and are very important for informing future decisions, we simply don’t have enough of them to blindly ignore changes in circumstances, timing and other variables that could significantly alter results for a new effort.

So how do we overcome our natural instincts in order to make better business decisions?

  1. Be aware of the problems with certainty
    You’ve read this far, so maybe you’re awareness is already active. I know that I am reassessing all the things I “know” to try to truly separate what is fact and what is assumption. I very much value all my experience, and I know I make better decisions because of what I’ve seen and heard along the way. But I want to make doubly sure that assumptions I make based on past experiences are tested and validated before I turn them into absolute fact.
  2. Actively seek alternate points-of-view
    In my experience, the combination of multiple experiences provides a much more solid foundation for decision making than basing decisions on singular past experiences. Techniques I’ve used, like The Monkey Cage Sessions, are based on the incorporating viewpoints from people in different functional areas and levels of the organization. While it’s acceptable to discount data or opinions that are in opposition to a decision I might make, I want to be sure I’m not simply rationalizing opposing information or viewpoints solely because they are different from my biases.
  3. Envision alternate scenarios
    I addressed this some in a previous post, “Obscure and pregnant with conflicting meanings”, where I discussed a technique I called “Scenario Imagination.” I’ve since read an excellent interview with Daniel Kahneman and Gary Klein where they detail a similar and better technique they call “pre-mortem” (which is also a better name than mine). Whenever we make decisions, we have a tendency to assume our decisions are going to produce the best possible results. These pre-mortem techniques have us imagine worst case scenarios to try to dissect potential problems before they occur.
  4. Be flexible and plan for contingencies
    Once we admit we’re not 100% certain, we can move forward with plans that are flexible and able to react to changing conditions. To be clear, I’m not saying we should just be wishy-washy and not make clear decisions. What I’m saying is that we should be open to new facts and be sure we have created an environment that allows us to change course when warranted.

If we’re aware of our certainty biases and take active steps to address them, I believe we can significantly improve our decision-making in our businesses.

What do you think? Upon self-examination, have you turned beliefs into facts in your mind? How would you suggest addressing these biases? Or, do you think is all a load of hooey?

The immense value of “slop time”

Lately, I’ve been thinking a lot about thinking. We spend such a large portion of our days reacting to issues flying at us from all directions that we can easily lose sight of where we’re headed and why we’re going there. We’re so busy that we don’t have time to think, and failing to allot time to think is ultimately counterproductive. Taking time (and even scheduling time) to reflect on past actions and consider future courses of action is more important than we often realize.

Consider this quote from former Intel exec Dov Frohman in his book Leadership the Hard Way and also discussed on this Practice of Leadership blog posting:

“Every leader should routinely keep a substantial portion of his or her time—I would say as much as 50 percent—unscheduled. Until you do so, you will never be able to develop the detachment required to identify long-term threats to the organization or the flexibility to move quickly to take advantage of random opportunities as they emerge. Only when you
have substantial ’slop’ in your schedule—unscheduled time—will you have the space to reflect on what  you are doing, learn from experience, and recover from your inevitable mistakes. Leaders without such  free time end up tackling issues only when there is an immediate or visible problem.”

Frohman makes some excellent points about the need to learn from experience and pull the value from the mistakes we make. Truly understanding the pros and cons of past decisions, ideally with the benefit that hindsight and new learning gives us, helps us better prepare for future decisions.

But there’s so much going on every day, and with staff cuts we have more work than ever. How can we possibly afford to time to think?
Well, Frohman has a ready answer:

“Managers’ typical response to my argument about free time is, ‘That’s all well and good, but there are  things I have to do.’ Yet we waste so much time in unproductive activity—it takes an enormous effort on  the part of the leader to keep free time for the truly important things.”

Of course, that’s easy to say and considerably harder to do. But it’s so important. Without taking the time to focus on the most important issues, tactics and strategies, we end up constantly fighting fires and ultimately working our way into a death spiral.

I find that if I give my think time enough priority, I can find a way to get it in. For me, actually scheduling time on my calendar makes all the difference. It also forces me to put some of the daily issues into perspective and postpone or even cancel meetings that don’t rate highly enough on the prioritization scale.

So, what do we do with this newly scheduled time to think?

Reflect on past decisions
I’ve recently started spending some time actively thinking through the decisions I made during the previous week or so. It’s amazing how hard it was at first to think of many decisions I made, particularly the numerous small decisions that happen every day. They came and went so fast that I didn’t really immediately retain them and their effects. Where they good decisions or bad decisions? It made me wonder if I could make better decisions in the future just by doing a better job of examining past decisions.

Open up to new ideas and learn something new
I am constantly hungry for new ideas. I love to read interesting new books, and I try to read as many blogs as I can. Of course, all of that reading takes time, so I look for my opportunities wherever I can. I try to read for at least a half hour every night, and I’m always looking for books that will expand my thinking.

I’m currently reading a very interesting book called How We Decide by Jonah Lehrer. It’s essentially about behavioral economics (a fascinating field with all sorts of retail implications) but the twist is that he actually examines the inner mechanics of the brain to explain why we do what we do. He’s a good story teller and it doesn’t get to “scienc-y.” (Is that a word?)

Fooled by randomness Another book that has me thinking more than any book I’ve read in a very long time is Fooled By Randomness by Nassim Nicholas Taleb. How much time have we mis-spent reacting to data that lacks statistical significance? Could some focused learning on the events that fool us time and again prevent us from making bad decisions in the future?

I use Google Reader to follow many thought provoking blogs, including those listed on the right column here. I also use the Newsstand application on my iPhone, which syncs with Google Reader and allows me to take in a blog or two at all sorts of random moments when I have a little bit of time on my hands. In fact, during my blog reading recently I even came upon a list of new an “out-of-the-box” ways to inject thinking in your business from Mitch Joel.

Anticipate the future
After analyzing past decisions and opening up my mind to new ideas, I try taking some time to start anticipating the future. Here, I think it’s definitely important to imagine large strategic shifts in the marketplace, but it’s also important to consider daily issues that come up with staff, marketing tactics, etc. as well. How are different types of decisions made in the organization, and who makes them? Is decision making authority matched with accountability? Are decision makers aware of their boundaries? Are the boundaries appropriate? Is the business strategy correct and clearly communicated? Are we working towards the right objectives? Should I consider a different approach when working with a particular person? Should I go with the ham or the turkey for lunch. 🙂

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You’re clearly reading at least one blog today, so it’s good that you’ve already made some time in your day. Good news! I hope you’ll be back, and I hope you’re also taking some time to read more of the really great content that’s available out there in both book and blog form. I hope you’ll come across something so mind-blowingly thought provoking that it changes the way you think about something. I hope you’ll be so open to new ideas that you won’t be afraid to change your mind about past decisions and direction. (Side note pet peeve of mine: Why do we criticize leaders and politicians who change their minds? Would you rather work with someone who can change his or her mind in the face of new information or someone who stubbornly sticks to convictions no matter what?)

And, if you haven’t already, I hope you’ll consider adding some “slop time” to your schedule to allow you to reflect on past decisions, open up to new ideas and new learning, and anticipate the future.

Now it’s your turn. I’d love to hear how you find time to think. What are your sources of expanded thinking? Will you share any great books or blogs that you’ve read? What’s changed your thinking recently?



Retail: Shaken Not Stirred by Kevin Ertell


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