Mostly, When we make decisions, we use unconscious routines, called heuristics (personal models), to cope with the complexity of decision-making. These routines serve us well in most situations.
Much decision-making is based on sensory perception, (“I can see/smell/hear/taste something and based on previous experience this is what I conclude) As magicians know, sensory perceptions can be used to fool people. (Hint: Do not just trust your eyes!)
Other decisions are based on biases or on irrational anomalies in our thinking. These anomalies are potentially dangerous and often they are invisible to us. They have become hardwired into our thinking, so we fail to even recognise we are using them.
Here are some of the most common decision-making traps and what you can do to overcome them.
Anchoring
When considering a decision, the mind gives disproportionate weight to the first information it receives. Initial impressions, estimates, or other data anchor subsequent thoughts and judgments. (Being the firstest with the mostest - as Civil Way General Nathan Bedford Forrest said)
In business, one of the most frequent "anchors" is a past event or trend. In attempting to project sales of a product for the coming year, a marketer often begins by looking at the sales volumes for past years. This approach tends to put too much weight on past history and not enough weight on other factors.
Reduce the impact of the effects of anchoring in these ways:
1. Be open minded. Seek information, other variables and opinions from a variety of people to widen your frame of reference, without dwelling disproportionately on what you heard first.
2. Offer objective information. In seeking advice from someone else, offer just the facts, without your opinion, so you don't inadvertently anchor the person with your thoughts. Then you can benefit from hearing diverse views on the situation without those views being coloured or anchored by yours.
3. Whoever most vividly characterizes the situation usually anchors the other's perception of it. Others literally see and discuss the situation while anchored from that most memorably stated perspective. The vivid communicator has literally created the playing field on which the game will be played.
The Status Quo
We instinctively stay with what seems familiar. Thus we look for decisions that involve the least change. To protect our egos from damage, we avoid changing the status quo, even in the face of early predictions that change will be safer. We look for reasons to do nothing.
Sins of Commission and Omission
In business, sins of commission (doing something) tend to be punished much more severely than sins of omission (doing nothing). In all parts of life, people want to avoid rocking the boat.
What can you do?
Think first of your goals when preparing to make a decision.
1. Review how these goals are served by the status quo as compared to a change.
2. Look at each possible change, one at a time, so as not to overwhelm yourself and instinctively want to stay "safe" and unchanged.
3. Never think of the status quo as your only alternative. Ask yourself whether you would choose the status quo if, in fact, it weren't the status quo.
4. Avoid the natural tendency to exaggerate the effort or cost or emotional reaction of yourself or others if you change from the status quo.
5. Remember that the desirability of the status quo might change over time. When considering a change, look at possible future situations.
6. If several alternatives are superior to the status quo, avoid the natural tendency to fall back on the status quo because you are having a hard time choosing among the other alternatives.
The Past-Actions Trap
The more actions you have already taken on behalf of a choice or direction, the more difficult you will find it to change direction or make a different choice. Whenever you invest time, money, or other resources, your personal reputation is at stake, you will find it more difficult to change your decision or course of action.
What to do?
1. For all decisions with a history, make a conscious effort to set aside your "past actions" -- investments of emotion, money or other resources -- as you consider whether to change direction.
2. Seek out and listen to people who were uninvolved with the earlier decisions.
3. Examine why admitting an earlier mistake distresses you. If the problem lies in your wounded ego, deal with it straight-away.
4. Don't cultivate a fear of failure culture in the people around you. In such an atmosphere, others will perpetuate mistakes rather than admitting them to you and changing course. When you set an example of admitting mistakes in your choices and self-correcting, others will believe they can do likewise without penalties from you.
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