Are You a Consistently Good Decision Maker?

The Answers

The answers to these 15 statements are based on the Seven Steps to the Anatomy of a Good Decision.

1. Once I make a final decision there’s no point considering the negatives and what might go wrong. I like to stay positive and focus on things going well.

This is precisely when you need to focus on the potential negatives so that you can prepare for the unexpected. If you see signs that things are not going according to plan, continuing along with a positive attitude is myopic thinking. You want to know, in advance, what has to happen for you to determine when corrective action is warranted so that you can react quickly and decisively. All too often nobody bothers to ask this critical question.

2. I like to rely on my own experiences, instincts and intuition when I’m searching for potential solutions to an important decision.

This is probably the worst way to begin a decision-making process because you’re under the spell of confirmation bias. Instincts and intuition have no place in a sound decision-making process when you first begin to look for “potential” solutions to a problem. Unless you’re honestly and openly evaluating several alternatives, and searching for new possibilities, you have eliminated any chance of making a “good” decision.

3. If I follow a sound decision-making process, one that considers a number of alternatives, then I feel as though I’ve made a good decision regardless of the outcome.

If you followed a sound decision-making process, and you considered a number of alternatives then yes indeed, you have made a good decision.

As noted in our introduction, some people think the outcome determines the quality of a decision, but that is simply not so, that’s known as “Outcome Bias”.  A good decision can turn out bad and a bad decision can turn out good.

For example, if you decide not to purchase home insurance, and at the end of the year you feel that it was a good decision because you went claim free and saved $2,000, that would hardly qualify as a good decision – although in this instance the final results were good. On the other hand suppose you’re a farmer who planted the right crop at the right time of year and then, just before harvest time, a tornado comes along and wipes out your entire crop. That would hardly qualify as a bad decision. You did everything right. You made a sound decision. In this case, you simply experienced a bad outcome due to factors beyond your control.

A “good” decision is always, always based on a sound decision-making process, and with rare exceptions, the outcome will also be good.

4. I try to begin the decision-making process with a strong view of the best solution, otherwise I feel like I’m just wasting a lot of time considering impractical alternatives.

The whole idea of a sound decision-making process is to be open to new ideas, new possibilities. Until you’ve gathered a great deal of relevant information and explored various possibilities, you can’t possibly know the “best” solution. Having a pre-determined agenda and a pre-determined solution to a problem is, unfortunately all too common in most people’s decision-making process. Anyone who thinks considering alternative solutions as being “a waste of time” is either inexperienced or inept at making decisions.

5. When making key decisions I sometimes get caught up in framing the problem rather than spending most of my time gathering information.

If this describes you when making an important decision, congratulations. Most people tend to rush through problem framing because they’re anxious to start solving the problem. However, without a proper frame and a clear understanding of what it is you wish to accomplish, you cannot fully address the real issue. Albert Einstein reportedly once said, “If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask, for once I knew the proper question, I could solve the problem in less than five minutes.”

6. Before I make a final decision I like to talk to experts – people who have experienced my problem and are knowledgeable about my area of concern.

Talking to experts before you make a final decision should be a prerequisite to making any important decision, because it is so much easier for others to see our biases and errors in judgment than for us to see it in ourselves. An expert can also help you recognize and understand base-rate information so you can get a clearer picture of everything you need to consider.

7. When confronting an important decision I like to size up the problem quickly so that I can spend as much time as possible working on the solution.

When confronting an important decision, accuracy and understanding is far more important than speed. If we don’t consider the possibility of several options and outcomes before we start working on a solution, then in all likelihood we’re wasting time and energy climbing the wrong wall. We’ve all witnessed people who are perpetually busy; they scurry about all day long but accomplish little or nothing at all. When you see such a person you can bet that he or she sizes up problems quickly in order to spend as much time as possible working on the solution.

8. When first confronting an important decision I like to reduce it to a simplified black and white choice. This makes it more manageable than considering a variety of options that merely cloud the issue at hand.

Things are seldom black-and-white. If you begin with a narrow frame of reference, then in all likelihood you’re missing opportunities and alternatives. Studies have shown that the worst type of decisions early on are “either or” or “to-do” or “not-to-do” decisions. A famous study by Paul Nutt, which conducted a detailed analysis of 168 major decisions by various companies and organizations, found that “whether-or-not” decisions failed 52 percent of the time over the long term, versus only 32 percent of the decisions with two or more alternatives. Why? The study argues that a single option results in a focus on “How can I make this work? How can I get my colleagues behind me?” Meanwhile, other vital questions get neglected, such as “Is there a better way? What else could we do?” (1)

9. When I make a decision it’s final because I know my decision-making process is strong.

If you’ve developed a strong decision-making process, then you have every reason to feel confident. However, with that being said, any “good” decision-making process considers that things don’t always go according to Hoyle – there are always outside factors that can derail even the best-laid plans. Every “good” decision involving major issues should have some kind of a contingency plan in case things go awry.

10. When I have a major decision to make I like to begin “without” a predetermined direction as to where I’m going. In the early stages, I’m just searching for ideas, options and alternatives.

Good, because confronting a major decision without a predetermined direction is the only way to stay objective. Remaining neutral while you evaluate all the available information gives you a chance to consider new ideas. If you approach a major decision with a predetermined solution, then your mind is already closed, leaving you incapable of seeing fresh ideas or new opportunities.

11. To fully understand a problem and its potential outcome, I like to define what has to happen for the decision to be a huge success and what has to happen for it to be a total disaster.

This is a surprisingly powerful step toward making a good decision. Nothing will stimulate your imagination and open your eyes to all possible outcomes like this simple exercise. By carefully contemplating extreme possibilities – both “good” and “bad”– you will force yourself to consider things you would have otherwise never thought of. It’s a simple, but extremely effective strategy in the decision-making process.

12. When I’m going to make an important decision I usually have an intuitive sense of what I need to do.

Then I like to gather the facts to confirm my intuition. Unfortunately this “strategy” is all too common and it’s a clear indication of confirmation bias. Relying on intuition in the early stages of making an important decision eliminates objective, rational thought; it’s System 1 (short-term impulsive) thinking, and the only result will be a decision based on biases, heuristics and assumptions.

13. Before I tackle a tough decision, I like to write out the objectives that I wish to accomplish with my final choice.

This is a great strategy because it helps you to stay focused on the issue at hand. It doesn’t narrow your thinking; it simply prevents expending valuable time and energy on irrelevant factors.

14. I like to follow the “status quo” and the “tried and true” when making important decisions. “If something isn’t broken, don’t try to fix it” is the way I see it.

Following the status quo isn’t necessarily “good” or “bad,” but if you follow it automatically, without considering other options, then you’re not a decision-maker, you’re an automaton. A good decision is based on the honest search for the best choice. To avoid falling into the status quo bias, you should ask yourself several questions:

• What is my objective? Is the status quo the best choice? Am I choosing the status quo to avoid making a decision?

• Aside from the status quo, what are my other options, and what are the pros and cons of other choices?

• Am I exaggerating the real costs and efforts of switching from the status quo? Would I choose the status quo alternative if it wasn’t the status quo?

• If I stay with the status quo, what will it look like in the future?

15. When facing a key decision I like to consider simple, base-rate information, statistics and other facts that relate to the issue at hand.

Great, because looking at base-rate information, statistics and other related facts keep the influence of biases, heuristics and assumptions at bay. Intuition can play a part in a “good” decision-making process, but only after all the factual information has been thoroughly evaluated. For example, if you’ve gone through a decision-making process by evaluating a number of options and alternatives, and you’ve reduced your selection down to two possible choices, then this is where you might want to use your intuition to make the final decision.

1. Nutt, P. C., “Surprising but True: Half the Decisions in Organizations Fail,” Academy of Management Executive, 1999, 13:4