Why Smart People Make Stupid Decisions?

(From Secrets to Winning at Office Politics by Marie G. McIntyre, Ph.D.)
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One of the primary reasons that managers exist is to make decisions. But since managers are just human beings, their decisions are often influenced by certain personality traits or flaws in thinking. Assess yourself on the decision-making biases listed below, then try using the balancing strategies to make better decisions.

Decision Flaw Definition Self Assessment Balancing Strategy
1. Unbridled optimism
Seeing only benefits & overlooking risks I tend to have a very optimistic temperament and expect everything to work out for the best.
 Yes  No  Somewhat
Ask someone else to be the “devil’s advocate” and try to find the flaws in your decisions. Gather data to explore possible problems.
2. Short-term focus Failing to see long-term consequences I tend to be very aware of the need to solve immediate problems and seldom think too far ahead.
 Yes  No  Somewhat
Before taking action, try to imagine all possible consequences of the decision. Partner with someone who is a more natural long-range thinker. (You can help balance them, too)
3. Hot button reactions Acting on strong emotional biases I have strong feelings about certain things and may not be open to much disagreement or debate in those areas.
 Yes  No  Somewhat
Ask others to tell you what they think your hot buttons are. When you feel a “hot button reaction” coming on, don’t say anything until you have heard from those with a different opinion.
4. False consensus
Assuming that everyone agrees I express my views very strongly and will actively debate anyone who expresses a different viewpoint.
 Yes  No  Somewhat
Get the opinions of others before expressing your own. Do not talk at length when presenting your views. Listen when others are speaking.
5. Status quo bias Fear of making the wrong decision I am uncomfortable taking risks and tend to worry about the possible negative consequences of making a change.
 Yes  No  Somewhat
Thoroughly explore the potential benefits of a change. Recognize that staying with the status quo is also a risk. Learn to recognize and manage your feelings of anxiety. Use pilot projects to minimize risk.

6. Herding instincts
Copying the actions of others I like to stay aware of current trends and adopt practices that are being used by others.
 Yes  No  Somewhat
Do not adopt new approaches until you have independently evaluated their benefits and risks. Assess them in light of your own organizational goals and culture.

7. Sunk cost effect
Sticking with a bad decision for too long I am reluctant to abandon a project or strategy if it means wasting time or money that I have already invested in it.
 Yes  No  Somewhat
Use pilot projects to avoid making large initial investments. Evaluate existing projects, policies, or programs based on future risks, costs, and benefits, not past investment.

8. Too much gut
Failing to consider relevant data I trust my intuition and will often follow my “gut instincts” when making decisions.
 Yes  No  Somewhat
Check out your gut reactions by collecting facts and data to evaluate the situation. Appoint a “devil’s advocate” to look for valid arguments against your decision.

9. Lone ranger tendencies
Failing to get important input I have a great deal of faith in my decision-making ability and am very comfortable making decisions independently.
 Yes  No  Somewhat
Identify those who may have useful knowledge to contribute or who will be greatly affected by your decision. Discuss the decision with them and get their input.
10. Self-serving attributions Refusing to see your own mistakes I generally find it easier to see how others contributed to a problem than to recognize the part that I played in it.
 Yes  No  Somewhat
When problems occur, ask yourself “what could I have done differently in this situation?” Avoid the tendency to blame others for mistakes. Use problems as learning opportunities.