What Was I Thinking? Top 3 Lessons I Learned To Make Better Decisions
The art of recognizing and handling bias for better thinking
I studied Latin at school for four years.
Interestingly, what felt like torture at the time, has helped me with writing, analytical, and even problem-solving skills.
Yet, I remember very little of it, except maybe that famous quote:
“Errare humanum est, perseverare autem diabolicum”
In other words: “To err is human, but to persevere (in error) is diabolical.”
It sums up nicely my most frustrating experiences with wrongful corporate leaders who persevered with their mistakes.
Leaders are not immune to mistakes. We all can be wrong despite good intentions. Yet, the higher you are on the corporate ladder, the more damaging these shortcuts or mental biases can be to your organization.
So, how can you recognize and avoid the most common errors in judgment to help you consistently make the right decisions?
Here are the top three traps I’ve learned to detect and address:
#1 – The immediate cause fallacy
When challenged with a missed revenue target, you might hear that you didn’t hit your number because inventory was too low!
That’s an immediate cause. But don’t stop there. Step back, dig deeper, and you’ll soon realize that the root cause of the issue was a failing forecasting system between operations and sales.
When things go wrong, it’s tempting to look no further than the most immediate cause and declare victory. Reality is often more complex and requires a more robust approach to get to the root of a problem.
We tend to celebrate the five-whys technique as an obvious solution. It can be very effective if handled adequately, but it also has severe limitations. If interested, you can read my 2020 article on the truth about the five whys and “How To Solve Any Business Problem in 5 Steps.”
#2 – The “correlated cause” illusion
Another issue I’ve witnessed in board rooms was with fancy graphics in Powerpoint presentations boldly showing an apparent correlation between two unrelated facts.
Growing ice cream sales might correlate with the number of shark attacks on a given summer day. But there’s no causal relationship.
That’s what we call a spurious correlation, a false relationship between two facts. Often the result of incorrect data or incomplete information.
Here again, whenever you see a correlation, put your critical thinking hat on and challenge the assumptions to gain the proper perspective.
#3 – The short-term lens
Should you maximize profit for the quarter or invest now in a promising technology that might be a game-changer in the future?
Like most leaders, I’ve always had to juggle the constant tension – sometimes conflict – between short-term and long-term outcomes.
Favoring the short term without much consideration for the long term can lead to devastating consequences and misses.
One way to avoid this is second-order thinking. It helps you crystallize the future implications of your decisions by thinking about their consequences.
So, as you explore a potential solution to a problem, ask yourself what risks are associated with it. How does it impact others? Why do you fundamentally believe it’s right?
A robust approach I’m also using is to ask myself how I’ll feel about a decision I’m about to make in ten hours, ten months, or ten years.
I’m just scratching the surface here. There are many other traps and cognitive biases leaders repeatedly fall into.
But apply these three rules in deliberate problem-solving, and you’ll become a stronger decision-maker and a better leader.
So, be bold and stop cutting your decisions short. Start focusing on root-cause instead of immediate ones, beware of spurious correlations and put your short-term into a larger perspective.
It might slow you down initially, but you’ll maximize your chances of longer-term success.
And, as my Latin teacher used to say: “Audentes fortuna iuvat.”