Why Good Leaders Make Bad Decisions

 

Why do good leaders make bad decisions? This question is at the heart of Sydney Finkelstein, Jo Whitehead and Andrew Campbell’s book, Think Again.

The authors begin their analysis with the notorious 2005 hurricane Katrina disaster. As the retelling of the events are explained, you might even find yourself compelled to stop waving your placard, change your t-shirt, pull up a chair and listen for understanding. A series of understandable mistakes—errors of judgment—were made by very competent people. The same kinds of errors of judgment that we all make.

A bad decision starts with at least one influential person making an error of judgment. But normally, the decision process will save the day: facts will be brought to the table that challenge the flawed thinking, or other people with different views will influence the outcome. So the second factor that contributes to a bad decision is the way the decision is managed: for whatever reason, as the decision is being discussed, the erroneous views are not exposed and corrected.

Drawing on the findings of brain research, they conclude that “our brains use two processes that enable us to cope with the complexities we face: pattern recognition and emotional tagging.” Neither of these is inherently bad, in fact they are quite helpful and necessary much of the time. The problem is when we are faced with new types of input that do not match up with our previous experiences. This most often leads to flawed thinking.

They describe four conditions under which flawed thinking is most likely to happen. The first two are pattern recognition problems and the latter are emotional tagging issues.

• Misleading Experiences: If we are faced with unfamiliar inputs—especially if the unfamiliar inputs appear familiar—we can think we recognize something when we do not.
• Misleading Pre-Judgments: When we connect previous judgments or decisions that are inappropriate or inaccurate with our current situation, they disrupt our pattern recognition processes causing us to misjudge the information we are receiving.
• Inappropriate Self-Interest: “The reason why self-interest is such a pervasive influence is that it is particularly difficult for decision makers to be self-aware about how their personal interests are affecting their choices….We are particularly prone to screening the effects of self-interest from our conscious mind.”
• Inappropriate Attachments: While attachments add greatly to our lives, they can also trap us without realizing it. This includes inappropriate attachments to colleagues when cuts must be made or to a strategy we have an emotional investment in.

How do we avoid these traps? Good judgment is not enough. It is important to take the steps necessary “to guard against the inevitable distortions and biases that can lead to a flawed decision.” The authors offer four safeguards:

• Provide decision makers with new experience or data and analysis to reduce the risk of failure at source.
• Introduce processes that challenge entrenched views.
• Include a governance team to stand in the way of any flawed judgments that make it past the decision team.
• Put in place a special ongoing monitoring and reporting process from the beginning of the decision-making process.

You can’t eliminate bad decisions, but Think Again offers a fresh and readable method to reduce the risk of them. 

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