Think Again – why good Leaders Make Bad Decisions and How to Keep It From Happening to You

Think-Again-bookThis book fundamentally changed my understanding of the decision making. The authors explained that even highly knowledgeable and very experienced decision makers can make obviously bad decisions. Though in some cases the decisions may not look ethical, there is a possibility that the decision maker could be unaware that he or she is not objective.

Based on the research described in the book, human evolution assured that we are equipped with the decision-making system that works well – most of the time. However, there are times, when our nature is working against our own interests. We can learn to identify these “red flag” situations and use “safeguards” to minimize “red flags” influence.

Red Flags

Misleading experiences (our subconscious search for pattern in the past – pattern could be found incorrectly, but the mistake won’t be clear to the conscious mind).
Example: a proposed acquisition looks similar to several successful acquisitions made in the past; however the situation is different, what is not recognized.

Misleading pre-judgments (previous decisions that mislead current decisions).
Example: a decision made several years earlier leads the decision maker to execute the long-planned strategy when he acquires needed power; the situation has changed and the strategy is no longer reasonable.

Inappropriate self-interest (self-interest that may not be recognized consciously by the designs maker as affecting his or her judgment).
Example: an incompetent employee remains in the organization because firing the employee could create short-term difficulties for the manager

Inappropriate attachments (decision makers can be attached to people, places, or things without realizing that this attachment can cloud their judgment).
Example: a business unit leader resists a new logo consistent with the corporate image because he was personally involved into creating the previous logo

SafeguardsThink-Again-book-safeguards

Experience, data, analysis
Example:
encourage the decision maker to do additional research on the area involved into the decision

Debate and challenge
Example:
introduce a person with necessary experience to the decision team who can challenge the decision maker (if the decision maker can be challenged)

Governance
Example: create a process of decision making that would involve other people without a particular bias (however, too much process can stall any decisions – the process needs to be appropriate)

Monitoring
Example: if the wrong decision is made the error should be identified quickly; in some cases people tend not to communicate “bad news” if they know that the leader is partial to the decision – this should be avoided.

Wonderful example of applying a safeguard to counterbalance possible pre-judgments:

In one company, the CEO was concerned that his managers appeared to be anchored to the status quo. So he started the planning process by asking each manager to compose an imaginary article to appear in the Financial Times in ten years’ time describing the adherents of the current management team over the “past” ten years. The goal was to get each individual to generate creative ideas of how the business might be developed, and so provide a good platform for a debate over a wide range of options. After the exercise, one member of the management team commented that the new plan was “the first time we have had a real strategy.”

More resources are available on the book’s web site.

Wonderful book – highly recommend.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s