Decision-making is not a piece of cake.
4 most common pitfalls in decision-making
Receiving all the information needed and working with deadlines in mind don’t exactly create an ideal atmosphere to foster correct decision-making. Managers, entrepreneurs and economists often feel embarrassed if an outsider points out that their actions follow the application of the principle that a solution should be considered only when the benefits exceed its costs.
This is a tricky business. It is as much science as it is an art.
Thus, the more complex a problem is, the more likely a pitfall to occur. The best way not to get caught between two stools is to examine the kinds of decisions that many people make incorrectly in their everyday lives.
1. The influence of anchor data
Anchors cloud judgment as they elaborate on an estimate or a predetermined set of already collected data. When such information meets the eye, it is rather hard to think out of the box and analyze the decision unbiasedly.
Choices are being forced to conform since the anchors left an impression of what is supposedly acceptable or not.
Solution: to remedy this situation, do not expose yourself to factors that can mislead your decision until you actually have a concrete idea of what you desire to achieve.
2. Back to the drawing board
Do not let your ego take the driving wheel.
Whether it is an employee that doesn’t cut it anymore or a venture that hasn’t been productive and you stood by them, it is time to let them go.
Past decisions belong to the past and admitting of failing will not make you look bad. Rather resources and time from sunk decisions will be finally free to be invested in a more methodically assessed plan that will aid in the new efforts.
Solution: if you are uncertain about being stuck in the past, seek out advice from employees and coworkers that aren’t involved in your project.
3. Sitting on the fence due to the status quo
Surely, as human beings, we tend to avoid risks and conflicts that could arise because of a certain option.
In organizations, we have to deal with the existing states and conformity. Otherwise, we would face criticism and extra responsibilities.
However, the status quo doesn’t last through time, and rapid changes nowadays call for drastic and dynamic decisions.
Ask yourself: Would I still make the same decision if there was a different status quo?
4. Opportunity costs
The consequences of taking most of the activities aren’t explicit.
If doing an activity A equals not being able to do activity B, then the value of doing B is an opportunity cost of doing A. Lack of identification of such forgone opportunities is one of the main reasons why people judge wrongly.
Again, you should ask yourself “Is A or B better?” than “Should I go for A?”.
Solution: examine the most highly valued alternatives.
Those are the most major hazards someone can meet in their way of assessing a problem and its solutions.
Making correct decisions will only come with practice, time and experience, so engage the stakeholders, understand the real issue and develop fresh, creative options and models to tackle complications. This shall render you ready for avoiding quite a few pitfalls in the near future.
What do you think? Are these tips helpful? How do make the right decisions? Share your thoughts with us below.