I started reading a Harvard Business Review book (I fear I do like it to see a well known university on the cover of a book – I just can’t help myself). It’s called Making Smart Decisions.
It’s nice to read and try to look at your own decisions. The book is split up into different sections. I’m just passed The Hidden Traps in Decision Making and I’m now at Delusions of Success: How Optimism Undermines Executives’ Decisions, from amongst others my favourite author Daniel Kahneman.
The hidden traps written in this book are many and numerous. I recognize quite a few and even grind my teeth as some of the most common ones made are visible in my daily work. How many of you haven’t seen the huge pit of the sunk-cost trap: hold on to decisions made in the past, because they did cost a fortune, although everybody knows this is not the way forwards. Or the status-quo trap: not making any decisions, which is a decision on itself too although it doesn’t feel that way and so it alludes us into thinking that we best can hold on to what we’ve got. The confirming-evidence trap I always use when making sure my clothes are nice; I always ask my closest friends who probably wouldn’t hesitate the slightest fraction of a second to tell me I look awesome, while deep down I do know that the over-washed and outlived sweater was already a no-go years ago. Some of the traps are more subtle: the anchoring trap that gives disproportionate weight to the first information we receive. The recallability trap provides more weight to recent, dramatic events then is logical. And the last one, the overconfidence trap: we’ve seen that happening far too often with merges. If we just put department A, B and C together, we can work so much more efficient that we will need half of the man power. Yeah, right…
They state that the best way to avoid getting into these traps traps is awareness. Good book!
- There are a lot of traps when we look at decision making:
- Sunk-cost trap: sticking to a decision because it did cost so much
- Status-quo trap: not making any decision
- Confirming evidence trap: asking the opinion of someone that is same minded as you are
- Anchoring trap: disproportionate weight to the first information
- Recallability trap: more weight to recent dramatic events
- Overconfidence trap: overconfident about the positive parts of the deciscion