Strategy. Innovation. Brand.

why decisions fail

Deciding Decisively

I want more options.

I want more options.

Last week. I wrote about Chip Heath’s presentation skills. Today, let’s talk about his cognitive skills. Chip, with his brother Dan, has written three books: Switch, Made to Stick, and Decisive.

I’ve written about Decisive before and I expect to write about it again. Today, I’ll give an overview of the four major parts of the Decisive paradigm. I hope this will be useful in itself and it should also serve to introduce future articles that delve more deeply into each of the four elements.

Heath suggests that the path to better decision making is summarized in a simple acronym: WRAP. Here’s a thumbnail description of each.

Widen Your Options – too often, our decisions come in the form of “whether or not”. For instance: “We need to decide whether or not we’re going to acquire Company Z.” Much better to say, “What’s the best way to invest our capital to increase our market share?” Heath reports on one study that suggests that multiple-choice decisions are six times more likely to result in good decisions than are whether-or-not decisions. (This is very similar to Paul Nutt’s concept of premature commitment or to a doctor’s narrow framing based on your medical record.)

Reality-test Your Assumptions – I’ve written about confirmation bias before; Heath says that it’s much more pervasive in business than we might realize. The boss wants to do something, so all of us underlings look for evidence that she’s right. Moral: don’t surround yourself with yes-people. Before making a big decision, hold a trial with two well-prepared groups arguing the pros and cons. Also, remember the base rates. If nine out of ten start-ups fail, there’s a 90% chance that your start-up will fail. Really, there is – you can learn more here.

Attain Distance Before Deciding – My Mom used to say, “It’s easier to avoid temptation than to resist it.” In essence, that’s Heath’s advice, too. Making a big decision stirs up emotions ranging from fear to greed and most everything in between. So, get some distance. Time can be a form of distance; putting off a decision may help you think more clearly. (But not always). You can also ask yourself a simple question: “If my best friend asked for my advice in a similar situation, what would I say?”

Prepare to Be Wrong – when I climbed in the Andes, my buddies and I would often create a go/no go decision like this: “If we don’t reach such-and-such point by such-and-such time, we need to abandon the climb and return to camp.” Heath calls these tripwires. They’re agreed upon milestones or events that will jolt us out of autopilot. Without tripwires, we may just go merrily on our way, assuming that our original decision was correct. Tripwires help us focus on unfolding events and take corrective action.

Is that all there is to decision making? Not at all, Heath tells some great stories along the way and I’ll write about them in the future. For today, however, that about WRAPs it up.

How Does It Feel To Commit Prematurely?

Is it too soon to get married?

Is it too soon to get married?

In February, I wrote about premature commitment. According to Paul Nutt in his book, Why Decisions Fail, premature commitments all too often lead to debacles — decisions gone spectacularly and publicly wrong. The process is fairly simple: 1) we have a problem; 2) a beguiling solution is proposed; 3) we jump on the solution with undue haste and without considering our options or searching for alternatives. After all, we have a solution, don’t we? Why bother looking for another one?

As we read Nutt’s book in my classes, I can tell that students are grasping the general concept intellectually. It’s clear — intellectually and academically — that you shouldn’t commit too soon. Step back, look around, ask questions, survey the possibilities — then make a decision.

That’s all well and good in the classroom but will my students actually be patient when the pressure is on and everyone wants to be a hero? I’m not so sure. So, I’ve been looking for ways to show students what it feels like to make a premature commitment. By experiencing the process — rather than just reading about it — I’m hoping to imprint something on them. When you’re under pressure and a crisis is looming, it’s hard to think clearly. It’s easier to remember an experience than it is to organize your thoughts and respond to a novel situation.

I’ve discovered a video that helps students make the connection. Actually, I’ve known about the video for some time but I used to use it for a different purpose. Then it dawned on me that the video provides a good demonstration of a premature commitment. So, I’m re-purposing the way I teach it. Perhaps that’s an example of mashup thinking.

The video requires you to concentrate your attention for about 90 seconds and count the number of times a specific action happens. Here’s what I’d like you to do: Watch the video twice. The first time, focus intently on the task at hand (the video will explain what to do). Count the number of times the specified action happens and record the number. There is one (and only one) correct answer.  Then watch the video a second time and don’t bother to count. Just observe what goes on. Don’t read on until you’ve watched the video twice. You can find the video here.


Watch the video (twice) before proceeding


Did you miss anything the first time you watched the video? Did you notice it the second time? (I’m not going to give it away here but, if you find this confusing, send me an e-mail and I’ll explain it).

About two-thirds of the people who follow the instructions miss an important element of the video the first time they watch it. Perhaps the key phrase here is “people who follow the instructions”. Basically, I conned you into making a premature commitment. I convinced you that — to get the right answer — you needed to pay close attention to the action and count carefully. You decided that it was important to get the right answer, so you played by the rules I imposed. Because you played by the rules, you missed something important in the environment.

What’s the message here? It’s easy to get caught up in the situation. It’s easy to buy into the “rules” that a situation seems to impose on you. It’s easy to let other people rush you to judgment. It’s easy to con yourself. The next time you’re at work and a problem arises and everybody is rushing to find a solution, just ask yourself: “Am I missing the gorilla?”

Librarian, Farmer, Debacle

It's a quality issue.

It’s a quality issue.

In his book, Thinking Fast and Slow, Daniel Kahneman has an interesting example of a heuristic bias. Read the description, then answer the question.

Steve is very shy and withdrawn, invariably helpful but with little interest in people or in the world of reality. A meek and tidy soul, he has a need for order and structure, and a passion for detail.

Is Steve more likely to be a librarian or a farmer?

I used this example in my critical thinking class the other night. About two-thirds of the students guessed that Steve is a librarian; one-third said he’s a farmer. As we debated Steve’s profession, the class focused exclusively on the information in the simple description.

Kahneman’s example illustrates two problems with the rules of thumb (heuristics) that are often associated with our System 1 thinking. The first is simply stereotyping. The description fits our widely held stereotype of male librarians. It’s easy to  conclude that Steve fits the stereotype. Therefore, he must be a librarian.

The second problem is more subtle — what evidence do we use to draw a conclusion? In the class, no one asked for additional information. (This is partially because I encouraged them to reach a decision quickly. They did what their teacher asked them to do. Not always a good idea.) Rather they used the information that was available. This is often known as the availability bias — we make a decision based on the information that’s readily available to us. As it happens, male farmers in the United States outnumber male librarians by a ratio of about 20 to 1. If my students had asked about this, they might have concluded that Steve is probably a farmer — statistically at least.

The availability bias can get you into big trouble in business. To illustrate, I’ll draw on an example (somewhat paraphrased) from Paul Nutt’s book, Why Decisions Fail.

Peca Products is locked in a fierce competitive battle with its archrival, Frangro Enterprises. Peca has lost 4% market share over the past three quarters. Frangro has added 4% in the same period. A board member at Peca — a seasoned and respected business veteran — grows alarmed and concludes that Peca has a quality problem. She sends memos to the executive team saying, “We have to solve our quality problem and we have to do it now!” The executive team starts chasing down the quality issues.

The Peca Products executive team is falling into the availability trap. Because someone who is known to be smart and savvy and experienced says the company has a quality problem, the executives believe that the company has a quality problem. But what if it’s a customer service problem? Or a logistics problem? Peca’s executives may well be solving exactly the wrong problem. No one stopped to ask for additional information. Rather, they relied on the available information. After all, it came from a trusted source.

So, what to do? The first thing to remember in making any significant decision is to ask questions. It’s not enough to ask questions about the information you have. You also need to seek out additional information. Questioning also allows you to challenge a superior in a politically acceptable manner. Rather than saying “you’re wrong!” (and maybe getting fired), you can ask, “Why do you think that? What leads you to believe that we have a quality problem?” Proverbs says that “a gentle answer turneth away wrath”. So does an insightful question.



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