What are the most common decision-making traps for leaders?

Although information is plentiful and easily accessible, it’s worthless if you don’t harness it to your advantage. The key is to scrutinize information — evaluating it for accuracy, honesty, objectivity, timeliness, and thoroughness. It also requires you to broaden your horizons, remain open to other peoples’ thoughts and opinions, view things fairly, and objectively, and encourage folks to challenge your thinking. If you’re like most people, you’re careful about what you put into your body. If you’re that careful about consuming healthy food, shouldn’t you be equally prudent about how you feed your mind? You are what you eat AND the information that you digest.

O viés de confirmação pode levar uma liderança a cometer erros que impactam a carreira (e a vida) de seus liderados em situações de contratação, promoção e até mesmo demissão. Por essa razão é tão importante que as organizações ofereçam treinamentos de vieses inconscientes aos times de liderança. Todos temos vieses, somente quando tomamos consciência deles é que podemos agir de maneira diferente. Isso pode ser muito positivo na construção de times mais diversos e também para alcançar resultados de alta performance e soluções inovadoras.

El sesgo de confirmación es como ese amigo que te dice "te lo dije" solo cuando las cosas salen como él decía, ignorando todas las veces que no acertó. Es humano buscar razones para estar en lo correcto, pero eso a veces no juga a nuestro favor, sobre todo en el trabajo.

Many leaders are pressured both by external and internal expectations. This pressure often results in rushing to a conclusion and trying to find evidence that supports it. This is often the base for confirmation bias. When analyzed further, we see that the root cause is often not being prone to having biases or not aware of them, but forcing yourself to make a quick decision or build an opinion faster than anyone else. This "rush" makes even experienced leaders impacted by their biases and make less effective decisions.

My first experience with leadership was when I became a store manager for a computer repair franchise, rather unceremoniously. (due to COVID). I always WANTED to be in the lead, until it happened. Confirmation Bias is a BIG one for me. I truly must say I struggled with this one growing up. Through my possition, I learned a lot about being a 'leader, not a boss'. Being in touch with those your leading, is important, and confirmation bias can be a big hurdle. Practice listening, and having an open mind to trying solutions that work for your team, rather than how you believe things should be done. I learned more from the people I led, then they learned from me, and still have strong bonds with them.

Anchoring effect, in varying degrees, is present in all our decisions. Every time we decide based on previous events and experiences, it is anchored in the results we got from those decisions. The more positive encouragement that the decision gave, the stronger the anchoring effect. One way of keeping this in check is to have a trigger to force an objective evaluation. For me, this is the phrase "what is the next step ..." I use this phrase at the decision point in all meetings and discussions. This triggers me to pause and ask more and different questions. Someone on the team or I can often point to an anchoring effect.

Overconfidence bias often occurs when the leader believes their responsibility is to have all the answers. The best leaders understand that their job is to ensure the best answer is found-- regardless of where it might reside in the organization. That requires maturity, humility, and the ability to park your ego in service of your team/organization. I am astonished at how often I have seen leaders unable to do that.

You have a choice to pretend that you’re perfect or to face up to the reality that you’re human. Personal growth won’t occur if you shoot the messenger, bury your head in the sand, or surround yourself with like-minded people. In fact, surrounding yourself with “yes” people is like talking to yourself. The only way to make yourself better is to try. That means striving for continuous improvement in everything you do. Don’t let your ego get the better of you. The only thing standing between you and greatness may be yourself.

A wise leader knows they do not have all the answers and have individuals on their team that complement their knowledge and skills.

EGO, the 'Achilles heel' of many leaders, in many industries. No one likes a braggart. Humility and empathy, are great things to practice. Your team will be more fulfilled, when you allow them to shine, and in-turn will result in happier clients, customer and employee retention, and ultimately less stress for you in the long run.

I believe this is heavily influence by social, country and company culture. However, often high-performing behaviors are connected to being confident and having a strong and clear posture. This can easily become bravado and lack substance and real value. Something we see in Western countries and American-owned companies. Where being humble is often taken for weakness and under-performance. Great leaders lead by strength and find their team's strength to amplify. Confidence and strength with good leadership prevent overconfidence in individuals and, eventually, in teams.

It helps here to ask ourselves the question - if we left today and a new team came in and assessed the situation what decision would they make? When we disconnect ourselves from the situation, it helps us isolate the sunk cost fallacy (driven by our attachment to the situation).

This is honestly one of the greatest challenges I see, and is also tied to the anchoring effect. Pride can be a big stumbling block for some. Also, many leaders feel that their value is tied to their technical competence. Great leaders always strive toward the best outcome, and in many case the underpinning idea or even the best breakthroughs do not come from them. Their value is in creating a high functioning team and enabling them to succeed. If you focus on this it can help you avoid too much investment or ownership to one direction or idea. Likewise, challenge your team to embrace that mindset. Create a diverse team where members are comfortable challenging you and each other.

Ego strikes yet again. It's crucial to be able to admit and own your mistakes, for your growth as a leader depends on this. One thing that has stuck with me. My mentor, explained to me that failure is nothing more than pavers on the roadway to success. Ben Franklin attempted innumerable times to make a light bulb, yet he only succeed the 1 time, but without the previous failures he may have never identified the correct way make a light bulb

This is where we need to apply the principle of necessary endings. In his book of the same name, Henry Cloud shares that in order to get the best fruits, a farmer knows they have to do some pruning. To avoid sunk cost fallacy, we need to do regular pruning and identify what are our necessary endings.

When used effectively this is a powerful selling and convincing method. It is not necessarily a bad thing. However, you need to have methods for detecting and handling this. For example, a trigger that helps you to ask different questions. I often try bring in a stakeholder not involved. For example, a leader from customer service, can help you to see things outside of the frame by speaking of after-market sales, returns policy, backorder issues etc. Topics often negative and purposefully left outside of the frame.

Do you: • Get information secondhand or secure it from its original source? • Subscribe to information that reinforces your existing beliefs or seek a fresh perspective? • Accept everything at face value or view it with a healthy dose of skepticism? • Listen to people because you like them or because they’re respected and reputable? • Determine whether the information is opinion or fact? • Believe something is true because it’s well presented or based on its merit? • Determine whether the message is one-sided or presents both sides of the issue? • Attack opposing viewpoints or try to see the merit in others’ opinions? • Accept advice blindly or ask how the conclusion was drawn? • Assume others know better or trust your own instincts?

The more people you have involved in the discussion, the more likely you will avoid the pitfalls of framing effect-- since more people in the mix are more likely to bring different views/perspectives, feelings, and options to the table. Another useful heuristic is to assign a "Devil's Advocate" role to one member of the team-- whose assignment is to argue (by design) against positions taken (regardless of their own view.) The term, by the way, comes from the formal role once assigned by the Catholic Church to a priest whose responsibility was to argue against the canonization (sainthood) of a candidate.

Leaders, like everyone else, can fall into various decision-making traps that may hinder their ability to make sound judgments. Another decision-making traps that leaders should be aware of are Groupthink which seeks the consensus within a group to maintain harmony, often at the expense of critical evaluation. This suppresses dissenting opinions and leads to poor decision-making.

10 decision-making mistakes: 1. Yesterday’s news. Basing decisions on outdated information. 2. Define the problem. Losing sight of the key objectives. 3. To-do versus must-do. Addressing low-priority activities just to check off items. 4. Emotions get the better of you. Making important decisions in a poor frame of mind. 5. Frame of reference. Making decisions in a vacuum. 6. Analysis paralysis. Waiting for every piece of information before making a decision. 7. Band-aid solutions. Making a quick fix rather than addressing the root cause. 8. Piecemeal. Optimizing a single component at the expense of the whole. 9. Silver bullet. Doing what’s easy rather than what’s best. 10. It’s the details. Giving inadequate thought to implementation.

The role of leaders is to ensure the most effective direction and efficiently execute it - but fails more or less evenly throughout that process. They may misunderstand the map due availability bias, come up with a poor design mostly due confirmation bias, fail to allocate resources due overconfidence bias or get it the job done due emotional bias like status quo - and even if they make it past all of that the world may change and their loss aversion bias will not allow them to pivot in time. So it is not one bias - it is the process step that defines the worst risk - and good process is therefore 6x more important than good analysis.

Leaders are well served to consider: 1) who will be impacted by the decision and 2) who is the most knowledgable with respect to the issue, 3) how time sensitive is it, and 4) who is going to be ultimately responsible for implementing what is decided. If there is smoke coming out of the vent, that is not the time to pull the team together to discuss options-- the most responsible decision is to tell everyone to evacuate the building. Unfortunately, in my experience, many leaders fall into the trap of believing this is the case way TOO often, and underestimate the importance of having the whole team on board with a course of action-- especially true when the decision is critical (strategically speaking) to the business.