How to avoid mistakes in decision making as a leader

Today we will talk about errors leaders make in a DECISION-MAKING. A leader has a difficult task to integrate  AMBIGUITY, UNCERTAINTY, AND INFORMATION OVERLOAD INTO A DECISION in order to ensure action.

Decision-making is the fundamental requirement in strategic planning and execution. No one, including great strategic leaders, have complete mastery over their environment. They must make decisions in time that are flexible but not indecisive, objective but not dismissive and rigorous but not interminable. What helps or hinders quality decision leaders make? The answer is errors in social perception – the process by which people come to understand one another and social situations.  Here are some typical errors people make in the process.

These errors can be eliminated or controlled only with a rigorous training. We are going to present the ones that in our experience are the most important for leaders:

FUNDAMENTAL ATTRIBUTION ERROR – The tendency to underestimate the impact of situations on other people’s behavior and to overestimate the role of personal causes. “He did it because is evil”.

THE ACTOR-OBSERVER EFFECT – The tendency to attribute our own behavior to situational causes and others’ behavior to personal causes. “I could not arrive on time the bus was late” but “He is always tardy”.

FALSE-CONSENSUS EFFECT – The tendency for leaders to overestimate the consensus for their own opinions, attributes, and behavior. “They will support my idea in the meeting”.

DEFENSIVE ATTRIBUTION – The tendency to hold victims responsible for their fate when they are similar to us and when consequences are severe. “We women should not provoke with clothing style. She had an extra provoking dress and it should not come as a surprise to anyone that she was raped”.

BELIEF IN A JUST WORLD – The belief that the world is a just place where individuals get what they deserve, and deserve what they get. “He was ignoring the advice of his accountant and now he is broke”.

PERSON POSITIVITY BIAS  – The tendency to evaluate individual human beings more favorably than groups or impersonal objects. “She is more intelligent than other cheerleaders”.

PRIMING – The tendency for recently used words or ideas to come to mind easily and influence the interpretation of new information. “Mate Rimac and his Concept two cars are the fastest in the world”.

PRIMACY EFFECT – The information presented early in a sequence has a greater impact on impressions than information presented later on. “It was midnight when they killed her but police filled a report next day at noon”.

TRAIT NEGATIVITY BIAS – The finding that negative traits weigh more heavily in impression formation than positive traits do. “She is an intelligent, beautiful, educated, rich, and cold person”.

CONFIRMATION BIAS – Leader’s tendency to seek, interpret and create information that verifies their existing beliefs. “I think they will compete with us in the auction. Their lawyer has bought bonbons to clear his throat and mouth”.

BELIEFS PERSEVERANCE – The tendency to maintain beliefs even after they have been discredited. “Even if he was released by the court we all know that they have bribed the judge”.

SELF-FULFILLING PROPHECY – The process by which a leader’s expectations about a person can eventually lead that person to behave in ways that confirm those expectations. “ I knew he is a great leader, influencer and motivator so we hired him. No wonder he gave a solid presentation”.

OUTGROUP HOMOGENEITY BIAS  – The tendency to assume that there is greater similarity among members within outgroups than within ingroups. “Our competitors are evil and unethical”.

CONTRAST EFFECT – The tendency to perceive stimuli that differ from expectations as even more different than they really are. “We knew they are inferior to us but they won effortlessly”.

STEREOTYPES –   Beliefs that associate a group of people with certain traits often with only “a grain of truth”. “Leaders are egocentric, intelligent, manipulative sociopaths misusing the position”.

PREJUDICE – Negative feeling toward persons based solely on their membership in certain groups. “All managers are pretending they care in order to fulfill the annual plan and I can not stand them”.

INGROUP FAVORITISM   – The tendency to discriminate in favor of ingroups over outgroups. “We will appoint our treasurer to the new position and ignore their candidate”.

SOCIAL-COMPARISON JEALOUSY – Negative feelings aroused when others in a leader’s comparison group exceed that leader’s level of success. “They won this time and got the trophy that was ours for years”.

HINDSIGHT BIAS -Leader’s tendency, once the event has occurred, to overestimate his/her ability to have foreseen the occurrence. “I told you we will win. I can not miss in assessing the situation”.

EGOCENTRIC BIAS – Bias toward perceiving and recalling yourself as a central actor in various kinds of events. “My strategy was crucial in winning the game”.

OVERJUSTIFICATION EFFECT – The tendency for internal intrinsic motivation to diminish for actions that have been rewarded externally. “We wanted to win the match and get recognized. Now we got 100.000 € prize money and we are looking forward to more prize money in the future”.

MISATTRIBUTION EFFECT – An inaccurate explanation a leader makes that shift the cause for arousal from the true source to another one. “You are excited over 100 000 € prize money, That is what made you shine after the game was won”.

HAWTHORNE EFFECT – The finding that workers who were observed increased their productivity regardless of what actual changes in the work setting were made. “They observe us, manipulate the lights and noise, but we will not give in and decrease production.

THE ILLUSION OF CONTROL – The perception a leader has that chance events are more controllable than they actually are. “We had a great year and I guarantee you the next one will be even better”.

BUFFER EFFECT – The effect whereby a protective factor like social support shields a leader from the adverse effects of high stress. “Thank you for your team support when I was attacked by the shareholders”.

THE REPRESENTATIVE HEURISTICS – A mental shortcut that involves comparing a current situation to our prototype of an event thus arriving at a decision with the least amount of effort. “We have planned the event and we are ready to act smoothly as soon as we get the signal”.

AVAILABILITY HEURISTICS  – A tendency to encourage leaders to base their decisions on how easily they can remember similar events in the past. “We will use the same strategy we have used last year when I won the trophy with you”.

FRAMING THE PROBLEM – Words used to describe an issue can influence how we interpret events. “They are our enemies. They are sneaky, they are pushy, they are cowards, they will destroy our homes, they are heartless, they are not to be trusted. Do we have any other choice but to attack them?

SOURCES: 

  1. Petar Turčinović, Joyful Leadership Manual
Joyful Leadership
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