10 Common Decision-Making Mistakes
Avoiding the Pitfalls
The senior management team of a well-established organization has decided to relocate the business.
Without consulting any key stakeholders within the company, it has found a new office on the other side of the city that it believes fits the organization's needs better, and has signed the lease. But the team hasn't sufficiently taken into account whether the move is suitable for employees, and it becomes apparent after the decision is made that it's not.
The office has been at its current location for many years – most of the staff are local and have a short commute to work. As the new site is far away, with no decent public transport links, many people decide to leave. This causes a lot of disruption, and productivity and morale plummet among the remaining employees.
This example shows how overlooking one element of making an important decision can have huge consequences for a business. In this article, we look at 10 common decision-making mistakes, in no particular order, and we provide some insights and tools to help you improve your skills.
Mistake 1: Procrastinating
When you push your decision to the back of your mind and do other, less important tasks, or seek distractions such as making cups of coffee, you're probably procrastinating. Putting off making a decision can worsen your situation, and burying your head in the sand won't make it go away!
One strategy is to give yourself a small "window" of time in which to start working on your problem. Procrastinators often don't know where to start, and find decisions overwhelming, but breaking them down into manageable blocks of time reduces the pressure for you to "do it all." The Pomodoro Technique® is an easy method to help you concentrate on a task, and to be more productive.
Take our procrastination quiz to assess whether procrastination is a challenge for you.
Mistake 2: Believing It's "Make or Break"
Can you think back to an important decision where you felt like the weight of the world was on your shoulders, and that making the wrong choice might make or break you?
We've all been there, whether it's deciding to take a new job, launch a new product, or buy a new house. But while it may have seemed like the biggest decision of your life at the time, ask yourself how you feel about it now. By re-framing the way we look at our decisions, we can gain new perspectives about the choices we have to make.
One approach is to think about the worst thing that could happen if you make the "wrong" choice. In some cases, when human life or large sums of money are involved, for example, a poor decision can be genuinely disastrous – in these scenarios, you will have to explore risks and possible consequences very carefully. But in many situations, the worst case is actually not as bad as you think; and even if the decision turns out to be a bad one, you'll likely learn some valuable lessons along the way.
Mistake 3: Not Being Systematic
When you need to make an important decision, such as whether to launch a new product or develop an existing one, do you go on "gut feel," or do you weigh up each option's merits in a methodical, calculated way?
Making a decision can be exciting and stressful, so to help you deal with these emotions objectively, you need to use a structured approach. A logical and ordered process can help you address all of the critical elements needed for a successful outcome, and reduce the likelihood of overlooking important factors.
Our seven-step, decision-making approach looks at how you can create a constructive environment, investigate the situation, and generate good alternatives. It also includes how to explore your options to select the right one, how to evaluate your plans, and what to consider when communicating your decisions.
Mistake 4: Not Considering Different Perspectives
Many of us are guilty of rushing decisions, particularly when there's a deadline looming and we're under pressure. But rather than making a snap decision, make sure you consider a range of perspectives.
Before you try to solve an important problem, use the CATWOE checklist to brainstorm the various people and elements that are affected, so that you get a rounded view of your decision. By considering the situation from six, very different perspectives (customers, actors, transformation process, world view, owner, and environmental constraints), your decision making should be much more comprehensive.
Once you have a good overview of your problem, tools such as ORAPAPA and Perceptual Positions can help you to look at it from various points of view, so you can identify factors that you may not have otherwise considered.
Mistake 5: Not Involving Stakeholders
When making an important decision that affects other people, you need to involve key stakeholders. They will have insights and information that will affect the choices you make, and this will help you make better decisions. Furthermore, it pays for you to gain their buy-in as you often have to rely on them to implement your decisions.
Make sure that these key stakeholders are well represented within your decision-making group, so that you build their commitment to your decision. Ask them for their ideas and encourage them to think creatively. Tools such as The Charette Procedure and Round-Robin Brainstorming are great ways to generate new ideas.
Mistake 6: Not Avoiding Groupthink and Psychological Bias
While it's essential to involve other people in your decisions, particularly when what you decide will affect them, you need to be aware of Groupthink. This is when the desire for group consensus overrides people's common-sense desire to present alternatives, criticize a position, or express an unpopular opinion.
Groupthink drives out good decision making and problem solving, because you might not consider all your options thoroughly. To avoid it, you need to have a process in place for checking the fundamental assumptions behind group decisions. For example, the Ladder of Inference can help you identify the thinking process you went through to arrive at group decisions, to make sure they're well founded.
There are many other psychological biases that we are all susceptible to in decision making, which can cause us to act in an illogical way. These include having a tendency to jump to conclusions (anchoring), expecting past events to influence the future (the gambler's fallacy), and blaming others when things go wrong, rather than objectively looking at the situation (fundamental attribution error). For more information about how to avoid these, and others, see our article.
Mistake 7: Being Overconfident
Many of us think of ourselves as objective and fair-minded, and we consider all the information available to us to come to a sound conclusion about a problem. However, it's easy to make poor decisions if you become overconfident in your own knowledge, particularly if people think of you as an "expert."
People often make their reputations for expertise and good judgment by being careful and methodical in their decision making. However, they can let this slip as they get more confident, relying less on analysis and more on "gut feel" – this is where sloppiness, mistakes and "hubris" can slip in.
If you over-rely on your own opinions, you might be guilty of confirmation bias. This is when you look for information that supports your existing beliefs, and reject data that goes against what you think is true. This can lead you to make bad decisions, because you don't factor in all of the relevant information.
While "going with your gut" can feel like the right thing to do sometimes, you need to make sure your hunch is based on information that you've gathered systematically. To improve your decision making, consider the sources that you tend to rely on when you make decisions and actively look for new ones.
Mistake 8: Not Thinking About the Consequences
We can sometimes find decisions difficult to make because we worry about their long-term consequences. However, some people forget to consider how their choices might affect the future, and focus on the "here and now" instead.
One way of laying out your options and investigating their possible outcomes is by creating a decision tree. Constructing a decision tree means that you thoroughly explore the potential impact of a decision, and you calculate the risks and potential rewards of your alternatives in a way that makes it easy to interpret the results.
You can also carry out a scenario analysis, which helps you think about how circumstances may change in the future. This allows you to make decisions in the context of different possible futures, and identify the ones that are either most likely to come about or have the greatest impact on your decision. By making your plans and decisions based on the most likely scenarios, you can be confident that they are sound, even if circumstances change.
Mistake 9: Not Communicating Effectively
It may sound obvious but, once you've made a decision that affects others, you need to tell them about it. One of the worst mistakes people make is not communicating their decisions in a timely or appropriate way, and this can cause rumors to spread among your team or throughout the organization.
Look at the people that your decision impacts. What information do they need, and what is the most engaging and interesting way you can communicate it? If the decision is going to have a significant impact, or if you're in a crisis, the best way to tell people about it is probably in person.
Take a different approach for people who aren't directly affected by your decision, but who still have an interest in its outcome. For this broader audience, you might provide a summary of your decision, perhaps in an email. They may need less detail than the key stakeholders but you'll still need to give them some background information, such as how you arrived at the decision and how it will affect them. Our article on stakeholder management will help you think about this.
Mistake 10: Carrying on Regardless
No one likes admitting to making the wrong decisions, particularly when you've battled to get your way, or when there are political, emotional, moral, or financial implications to changing direction. Unfortunately, one of the traps that some people fall into is to "escalate" their commitment, far more than a rational decision maker would.
People do this largely because they cling to an over-optimistic view of the future, hoping that their original decision will eventually come right. It tends to happen when they've already got a strong emotional investment in the hard work they've put into the project, and they may feel that "cutting their losses" means they are admitting that they're no good at their job.
When weighing up whether to go ahead with a decision, you have to realize that the time and money you've already spent on the project are "sunk costs" that you can never recover, and that you need to put them behind you for decision-making purposes. You need to remain objective, consider the facts before you, and try to keep your emotions out of it.
You can find more strategies and tools in our How to Make Decisions article.
There are a number of common mistakes that people make when it comes to decision making. When you have to make a complicated decision, don't put it off! Take a systematic approach and involve key stakeholders, so you can consider different perspectives.
Be aware of issues such as Groupthink, consider the long-term consequences of your actions, and make sure you communicate your decisions to everyone that they affect. And don't be afraid to admit it if your decision turns out to be wrong.