Access the essential membership for Modern Managers
The prospect of having to collate the amount of valid information necessary to make an important decision can be daunting. Information gathering is, however, a vital stage in the decision-making process. Moreover, it is a process that we could all benefit from improving. The tips listed below will help you realize the importance of gathering information before making a decision and to take steps to ensure you develop a rigorous information gathering process.
Bias
One of the main reasons why information gathering can be difficult for people is because their judgements and estimates are riddled with bias.
Bias is when we are motivated, even subconsciously, to see things in a certain light or when we bring certain expectations into a situation. It usually results in a clouded picture of the true situation, leading to major flaws in the decision-making process. Bear in mind that it is people who generate documents and articles, with the human interests and human failings inherent in us all. Thus, all information should be carefully screened for signs of bias. It is important to remember, too, that different people hold different biases. So, if you are working in a group of information gatherers or decision-makers, it is highly likely that everyone will approach the situation with different views and expectations. To counter bias, try to:1. approach each piece of information with a fresh pair of eyes2. question yourself each time you read something new. Ask yourself:
- In what ways does this information contradict or suggest something different to what I have read before?
- In what ways does this information support or complement what I have read before?
- Does anything I have just read surprise me?
- Is the information I have read objective? Does it sound like propaganda? Who wrote it? Who commissioned the research? Who gains from the findings of this study?, etc.
3. write down the answers to these questions4. ensure everyone working in a group is aware of bias and the problems it can cause5. ask group members to question everything they hear or read while gathering intelligence
Overconfidence
Psychologists have long highlighted overconfidence as the most prevalent and potentially catastrophic problem in decision-making. There are numerous famous examples of overconfidence throughout history, two of the most notable being the destruction of Pearl Harbor in World War 2 and the decision to launch the US space shuttle Challenger in 1987. In the first case, the management at Pearl Harbor felt invincible, not thinking any kind of attack was possible and leaving itself wide open to a devastating blow when the unexpected happened. In the second case, NASA ignored the warnings that were issued prior to the launch of Challenger, choosing to believe that the risks were unlikely to be realized. By our very nature we are overconfident. We think we know more than we do. The damaging consequence of this is that we tend to examine too little information rather than the most valuable. This is especially true when the information has been recently acquired or has resulted from a particularly vivid experience.
- In trying to combat overconfidence, we should ask ourselves:
- How much do we really know?
- Are the sources of our knowledge truly representative?
- Why might our judgment be wrong? List possible ways in which our judgment may be wrong and the reasons for this.
- Highlight certain decisions for special consideration if you fear overconfidence is an issue.
- If you feel overconfidence could be an issue with members of your team, ask them to include both a level and a degree of confidence. For example, if the objective is to have 500 boxes packed before Christmas, ask team members to state a range based on the number of boxes they believe they can pack (i.e., 350-450) and a degree of confidence in achieving this (i.e., 80% sure). This tactic has been proven to encourage and help people forecast more accurately.
- Ask yourself if there is any additional information which would allow you to predict a narrower range with a higher degree of confidence.
Anchoring and Adjustment
Anchoring occurs when we base our judgements and estimates on information we already hold. This often leads us to fail to adjust subsequent estimates and judgements appropriately. Hundreds of studies on this aspect of decision-making have been carried out over the years. One such study involved people being stopped on the street and asked to pick a number out of a hat. They were then asked whether the percentage of African countries in the U N was more or less than the number they randomly picked. After answering, they were then asked to give the exact percentage of African countries in the UN. For example:
- number chosen randomly = 65
- % of African countries in UN is more or less than 65 = less
- exact % of African countries in the UN = 45%
The same process was carried out on another person but this time the number chosen at random was 10. The person was asked the same questions as before and his results were as follows:
- number chosen randomly = 10
- % of African countries in UN is more or less than 10 = more
- exact % of African countries in the UN = 25%
These two examples demonstrate anchoring and adjustment. That is the insufficient adjustment up or down from an original starting point. Studies invariably point to the conclusion that people adjust insufficiently from anchor values whether the decision involves nuclear catastrophe, the value of a house or the percentage of African countries in the UN. Anchors are extremely difficult to disregard, but in trying to counter the phenomenon of anchoring and adjustment we should:
- ask whether our estimates and judgements are sound or if we have we relied excessively on an easily available anchor
- consider whether any of the suggested values seem unusually high or low
- generate an alternate anchor that is equally extreme in the opposite direction and imagine how things would seem if this were the case
- consider multiple anchors before making a final decision
