We make thousands of decisions each day, most unconsciously, some with more thought. The reality is, humans often make bad decisions, especially when it comes to the things that really matter to us: the future, money, relationships. This bad decision making also plagues our groups and organizations - communities, businesses, nonprofits and government.
I expect to publish my new book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, later this year. It will be an antidote for bad decision individual and organizational decision making.
Special pre-publication offer: Order now at half price, $9.95!
Let me tell you a bit about my new book...and how you can help me get it published and in the hands of decision makers whose decisions not only affect their lives but all of ours.
I'm Lee Crumbaugh. Starting with my studies at the University of Chicago and then as an organizational leader and strategy consultant, I've dedicated my career to helping people and organizations use planning to find a compelling vision of the future and to develop and implement powerful strategies to achieve that excellent future.
But I've found that what looks like a straightforward logical process - find your dream, figure out what you need to do to get there and execute your plan to attain it - often gets derailed.
That lack of planning and implementation success is the genesis of my new book.
I've researched why this blockage occurs, have blogged about it in Strategic Thinking & Strategic Action for nine years, have written a book about it, AHEAD: Strategy is the way to a better future, and delivered live presentations and webinars about it. I have gone as far as working as President of the Association for Strategic Planning to conceive and help launch World Strategy Week to get minds engaged globally on improving results from planning.
What I have found is that sometimes the problem is lack of commitment to the process or lack of belief in the process or lack of leadership. These and other barriers are hard enough to tackle.
BAD DECISIONS ARE WHY WE DON'T ACHIEVE BIG THINGS
But the biggest reason we don't get further in achieving the important things as people and organizations is that we make bad decisions.
And that's why I am now asking for your help as I complete my new book: Together, we can help ourselves and the people and organizations we care about make better decisions to make compelling visions real, to achieve dreams, better results and greater success.
What I have found is that psychologists, sociologists, anthropologists, other behavioral scientists, economists and philosophers have developed a deep body of knowledge on why people and organizations make bad decisions. And in total their work tells us much about how to make better decisions for greater success.
But nowhere has anyone put this depth of knowledge and understanding together in a complete way that all of us can access and use.
You may have read about some of this research in books such as Thinking, Fast and Slow by Nobel Prize winner Daniel Kahneman, The Black Swan by Nassim Nicholas Taleb, The Tipping Point and Blink by Malcom Gladwell, and Drive by Daniel Pink. These are all wonderful references and I urge you to read them.
But we need to go further in helping people understand why their and others' decision making often is faulty and how to make it better. As my book will show, there is much more to teach, learn and apply!
DO YOU KNOW THE 300+ REASONS WE DECIDE POORLY?
In my quest to understand how we make decisions and how we can do a better job of making the big decisions, I have identified 350 factors that research has shown contribute to bad decision making. These factors include mental effects, fallacies and errors such as:
Observer-expectancy effect. Persistence of commitment. Naive realism. Conjunction fallacy. Buyer's Stockholm Syndrome. Immune neglect Change blindness. The gambler's fallacy. Loss aversion. False causality. Paradox of choice.
I believe most factors leading to bad decisions are not well known to most of us, and we don't recognize how they are affecting our decision-making.
These factors help explain:
Why Custer lost the Battle of the Little Big Horn.
Why Yahoo turned down a chance to buy Google - twice!
Why NASA crashed a Mars orbiter.
Why British Petroleum executives downplayed potential risks associated with their oil well that exploded in the Gulf of Mexico.
Other situations I have analyzed that show the corrosive power of mental biases, traps and errors on very important decisions include:
The Confederate Army's stunning loss at Gettysburg.
Travis Kalanick's outrageous actions at Uber.
The new accounts scandal at Wells Fargo.
The refusal of the Hillary Clinton team to properly assess the possibility of her loss.
The French failure to complete the Panama Canal.
PricewaterhouseCoopers' partner and accountant Brian Cullinan handing presenter Warren Beatty the wrong envelope at the 2017 Oscars ceremony.
Samsung's introduction of an exploding phone.
Lehman Brothers spectacular failure when CEO Richard Fuld believed that the investment bank was adequately capitalized.
Kodak's inability to save itself through digital photography.
The failure of the Concorde SST, in which the British and French invested £654 million and recovered only £278 million through sales.
FedEx's ill-fated Zapmail service.
Galileo stubbornly believing that Saturn was three planets in close orbit.
The breath-taking and unexpected costs of the F-35 Joint Strike Fighter program: now projected to be nearly $1.5 trillion over its lifetime.
President Donald Trump's wrong belief about a 9-11 celebration that led to his Muslim ban.
The death of mountain climbers on Mount Everest when guide Rob Hall was sure he could get them up and down safely.
investors choosing to invest with Bernie Madoff.
Mylan not realizing that hiking the price of its Epi Pen two-pack from $57 to more than $600 posed serious reputational risks.
Volkswagen executives' and engineers' belief that manipulating emissions tests could enable VW to maintain leadership in diesel automobiles and profits.
My book will unpack the chain of events and traps and errors leading to these and other high-profile decision making disasters.
Mental biases and traps also explain the important every day mistakes we make, for instance in investing money, choosing jobs, and picking schools.
SIX CATEGORIES OF MENTAL TRAPS AND ERRORS
I have developed six useful categories to group the effects, errors, biases, shortcuts, fallacies and traps that lead to bad decision making:
Psychological - "Processing problems." Errors occurring as a result of our cognitive biases and mental shortcuts that can lead to systematic deviations from logic, probability or rational choice theory.
Perception - "Input problems." Effects and errors in the organization, identification, and interpretation of sensory information we use to represent and understand the environment around us.
Memory - "Storage and recall problems." Errors from the process in which information is encoded, stored, and retrieved from our brain.
Logic - "Reasoning problems." Errors arising from making fallacious arguments that are deductively invalid or inductively weak or that contain an unjustified premise or ignore relevant evidence.
Physiological - "Limbic system problems." Mental processing and judgment shortfalls caused by physical factors that affect the function of our brain, such as arousal, depression and fatigue.
Social - "Interpersonal problems." Biases and errors stemming from how we view and interact with the people around us, with causes including social categorization, in-group favoritism, prejudice, discrimination, and stereotyping.
WHAT ORGANIZATIONS DO...AND DON'T DO
A major part of my research has been to survey organizational leaders - for-profit and non-profit - to understand decision making, planning and implementation practices that they and their organizations use...or do not use.
Key findings from the strategic leaders' responses include:
Organizations too often skip using the power of group consensus in making strategic decisions: It is typically used just a third of the time.
An outside facilitator is rarely used to improve decision quality.
Few organizations take steps to avoid group biases in decision making.
Half of organizations skip proven techniques for generating and better assessing strategy options.
Just a third of organizations look at risk when making strategic decisions and fewer consider exposure to “Back Swans” – extreme events.
60% of organizations monitor the results of their decisions, but fewer are quick to change course when a decision is not working out.
Two-thirds of organizations do not use tools such as score cards, benchmarking, outside assessment and post-mortems to improve the quality of decision making.
A potent insight is that more successful organizations seem more likely to use decision-making “best practices.” They are a third more likely to use consensus, have large and challenging strategic goals and generate many decision options.
My book will tap the findings from the 2017 Strategic Leader Survey as well as the 2013 and 2014 surveys, which together provide a rich lode of information on how organizations and leaders make strategic decisions, how decision-making practices can be improved for better results, and the clear relationship between use of best practices and organizational success.
Special pre-publication offer: Order now at half price, $9.95!
THERE ARE WAYS WE CAN MAKE MUCH BETTER DECISIONS
Through both my original research and exploring the growing body of knowledge developed by social scientists and other researchers, I have identified many approaches and steps we can take to avoid or overcome the factors that lead us to make bad decisions and the best practices we can use to make much better decisions when it really counts.
Consider that if we learned anything formal about decision making in school - and many people did not! - it was likely to be the rational model of decision making.
But the rational model falls way short of being helpful because it takes into account neither the limits of our knowledge nor the mental traps and errors that plague us.
My guess is that you and most other people know little or nothing about improving decision making by using methods and tools such as introducing desirable difficulties, learning from simulations, seeking alternative explanations, using averaging, recognizing anchoring, looking for the base rate, categorizing "experts," ignoring sunk costs,considering opportunity costs, and much more.
My book will present these methods and tools in a clear and convincing manner; my intent is that we will learn to employ them routinely when presented with situations where we and our organizations need to make important decisions.
YOU CAN LEARN TO MAKE GOOD HIGH-STAKES DECISIONS
It's one thing to have a tool kit. But then, how do we use the tools to create the great decision we want want to make? My answer is the iDECIDE decision making system.
iDECIDE is crafted to get us away from automatic, involuntary decision making by kicking in System 2, what Nobel Prize winner Daniel Kahneman describes as "the conscious, reasoning self that has beliefs, makes choices and and decides what to think about and what to do."
iDECIDE will help us:
Navigate the biases and traps to which we are susceptible.
Look for, weigh and interpret evidence.
Make the best choice.
Implement and learn from the results of our decision.
WHERE TO SEE MORE OF "BIG DECISIONS"
I have been writing and posting parts and pieces of "Big Decisions: Why we make decisions that matter so poorly. How we can make them better" on this site for the past two and half years. Here are 20-plus posts that will give you more the flavor of the book and a taste of what it will deliver:
Even for a professionally trained, experienced writer and editor, producing a full-length book as substantial and meaningful as "Big Decisions" is a long, difficult and, yes, expensive task. You can see by what I have offered above how extensive the material I have developed is - and I have a lot more to tackle before a cogent, well-organized and compelling book emerges.
Then, I will need to design, format and publish the book using Createspace's self-publishing tools (which I successfully used for my first book, "AHEAD"). At the same time, I will need to market the book so that it gains maximum readership.
Please consider pre-ordering "Big Decisions" now. By pre-ordering:
You will get the paperback book (projected to be 300 pages) at half price, $9.95.
Your will receive a "pre-publication copy" hot off the press, ahead of anyone else besides me.
The sooner you read the book, the sooner you and the people and organizations with whom you are engaged can benefit from the unique insight, tools and processes it will deliver on making great decisions.
You will have the opportunity to review the book and offer content and editorial suggestions that I will eagerly consider in the final editing that will occur before first public release.
Your word-of-mouth and social media mentions of the book will create demand.
The small sum that will stay with me after printing and shipping your copy (around $4) will help underwrite the expense of full publication.
Special pre-publication offer: Order now at half price, $9.95!