Avoiding Common "Fatal Flaws" in Decision Making
Why is it that so many carefully researched decisions go wrong?
One reason is that the decision-maker failed to consider key factors – with often disastrous consequences.
We often say things like, "I've got a bit of a blindspot when it comes to Anna's designs," acknowledging that there's an area of our decision-making where we're not quite as rigorous as we'd like to be.
However, even if we're aware of one personal blindspot, we may not realize how many others we have.
But how can we identify this sporadic failure in our decision making, given that it is, by nature, "hidden" in a blindspot?
The answer is to use Blindspot Analysis. This technique leads you through a systematic audit of your decision making. One way of doing this is to check your decision-making against a list of common blindspots. One such list was first drawn up by Michael Porter in his 1980 book "Competitive Strategy," and further developed by Gilad, Gordon and Sudit in their 1993 article "Identifying Gaps and Blindspots in Competitive Intelligence."
Blindspot Analysis isn't a decision making tool in itself. Rather, it is a safety net that you can use to check the quality of your decisions.
Common Types of Blindspot
The original work on categorizing blindspots focused on blindspots in strategy formulation. However, many of the blindspots that are found in strategic decision-making can occur in other types of decision-making, and this is what we focus on here:
1. Invalid Assumptions
Many decisions involve making assumptions. But it's important that assumptions are based on facts, and are subject to sufficient scrutiny.
Invalid assumptions are often accepted because they are unchallenged. Sometimes this is because they have been assumed for so long that they've gained the status of a "non-negotiable" corporate myth or taboo: "Customers always go for the lowest price" or "Pink has to be one of the colors available in our blouse range."
To avoid the blindspot of invalid assumptions:
- List all of the assumptions used in your decision.
- Check, as far as you sensibly can, whether each one is valid, and see if you can find good data that will support or knock down the assumption. The 5 Whys technique can be useful in getting to the root of an assumption.
If you're part of a group involved in taking a decision, don't be afraid to speak out if you want to check the assumptions used. It is common for groupthink to occur, where other people may be avoiding challenging an assumption, even if they realize that that assumption may be invalid.
2. "Escalating Commitment"
This blindspot involves refusing to recognize that something you've been doing just isn't working, and you could better use your money or time doing something else, even if this means abandoning a project you've been pursuing.
Logically, the options you have in this situation are:
- Abandoning the initiative altogether.
- Switching your money, effort or time to another initiative.
- Investing more in the existing project to try and make it work.
People choose the third option, in which they "escalate" their commitment, far more often than rational decision-making would dictate.
This is partly because they tend to cling to an over-optimistic view of the future in the hope that their original decision will eventually be proved right. It can also occur because they already have a strong emotional investment in the hard work that's gone into the project so far.
In addition, they may consciously or subconsciously feel that "cutting their losses" is an admission of personal incompetence. As a result, this blindspot is more commonly found when an individual, rather than a team, is responsible for making the decision.
3. Tunnel Vision
When you're in a tunnel, you can see what's directly ahead of you, but you have no idea what's happening outside your area of focus. When you're suffering from this blindspot, (which the creators of blindspot analysis referred as "constrained perspective") you tend to weigh up your decision considering many fewer factors than you really should consider.
A typical example of suffering from the tunnel vision blindspot would be to assume that everything else will stay the same while you change.
Blindspots caused by over confidence often involve underestimating risks arising from "unknown unknowns" – issues people are not even aware of.
Typical blindspots which over-confident decision makers suffer from include:
- Treating guesstimates as facts (this can also be regarded as a particular type of unchallenged assumption, and should be avoided in the same way.)
- Only considering the most likely external situations, and ignoring less likely ones which could nevertheless totally derail the situation if they were to occur.
- Giving more weight to evidence that supports their gut instinct.
- Assuming that, if they've made a decision in the past that turned out well, they have a good enough "gut instinct" not to need to analyze the situation in detail.
- Assuming that, if one option has a larger amount of data supporting it than do other options, that that information is of higher quality than the data supporting other options.
You can try to reduce the risk of over-confidence blindspots by guarding against the negative effect of overconfidence in decision making, by involving others in your decision-making process, and by encouraging people to challenge your reasoning.
5. Leaping to Conclusions
When decision makers suffer from this blindspot, they make decisions that are backed up by faulty logic, or by inadequate data.
One common example of this is to confuse "correlations" and "causality." Correlations involve two things happening at the same time. For example, a survey might show that children raised by single parents do less well at school than the children of married parents. This may be a good example of a correlation, however it may not be a good example of causation – if single parents are, on average, poorer or have less time than married parents, this could be the underlying cause.
Another very common example of this blindspot is basing decisions on engaging or emotionally significant anecdotal evidence rather than on data from a representative sample.
This tendency to give inappropriate weight to some observed data is, in fact, yet another form of invalid assumption and can be avoided in the same way.
The first step in avoiding decision making blindspots is to acknowledge that they occur: you mustn't have a blindspot for blindspots!
In addition to the steps given for each specific blindspot, there are other, practical things you can do to avoid developing blindspots. Some of these would clearly take a lot of implementing, and so are more appropriate if you're involved in far-reaching strategic decision making; others are worth using for much smaller choices.
- Blindspots can easily multiply as research and short-lists of options pass up a corporate hierarchy. If this is likely to be a problem, consider decentralizing decision-making as much as possible.
- If someone has made a poor decision because of sloppy decision-making, give feedback as soon as possible. Work to make sure that decision making is well-considered, and based on thorough analysis.
- For particularly important decision, try to involve someone from outside your team who has no vested interest in the decision, and get them to challenge your assumptions and review your reasoning (this is where a technique like the Ladder of Inference can be useful.)
- Map out how your proposed course of action could go wrong. Doing this will help you identify gaps in your data and reduce over-confidence.
Also, download our free Blindspot-Busting Worksheet and use it to audit your decision-making at regular stages during the decision-making process each time you make a decision. (It's important not just to wait until the final stage to do this; if you do, you risk wasting time analyzing options suffering from blindspots such as invalid assumptions.)
In rapidly changing environments, you can spot your blindspots quickly, simply because their consequences quickly become obvious.
In more stable environments, you need to be particularly diligent about blindspots. Their consequences may take a long time to emerge, by which time a great deal of damage may have been done.
By our nature, we can all be prone to blindspots in our decision making. Sometimes these can lead us to draw the wrong conclusions and make the wrong decisions.
By being aware of common blindspots, by being thorough and professional in your decision-making, and by auditing your decision making process to look out for the most common errors, you can improve the quality of your decisions, thereby making your projects more successful.