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Business and Finance

The elusive art of decision making

Liz Copeland
Six ingenious tips on making the right decision - and how to get others on board

It was only recently that we stopped basing entire economic models on rational decision making, even though experience tells us people don’t behave that way.

In the 1960s psychologists Daniel Kahneman and Amos Tversky looked at how real people made decisions. They showed that even extremely clever people, like economists, were bad at working out the maths behind decision making and tended to guess incorrectly. When I guessed at maths problems in school, I didn’t try to solve the problem using my slow, logical brain, which takes focus, effort and concentration. I used my fast, intuitive, ‘best guess’ brain, which was quite happy with an answer that was vaguely right.

Of course, I knew I hadn’t got the right answer. But as Kahneman points out beautifully in his book Thinking Fast and Slow, the fast, intuitive brain often gives us answers that are wrong, but because they feel right we’re convinced they are right.

In practice we should be using both our logical slow brain and our fast, best-guess brain all the time. Being aware of some of the biases in decision making can help us refine our decision making process.

1. Look out for fast brain biases

One well known bias is the halo effect. If you know a person is competent in one area, you think they’re competent in another area, even when you have no evidence of their expertise. Think of a celebrity endorsement of a slimming product. Because you regard the celebrity as an expert in one area, say light entertainment, you also think they know about slimming products. You may scoff and feel that only others would be taken in by this, but celebrity endorsements work.

Another bias is endowment, which means you value something more because you have it. It’s why it’s so difficult to sell your goods and feel you get a good price for them. Anyone who’s sold a property knows that feeling of disappointment when buyers, seeing potential or real problems, don’t value the house as much as you do. This works with intangible possessions too: we always think our ideas are the greatest because they come from our own brilliant brains. Right?

2. Be wary of second opinions

When you seek feedback, be aware that some people might have an agreement bias because:

  1. You’re the boss
  2. They don’t want to come out with an opposite view (they’re scared or they’re just being tactful)
  3. They don’t want to get into a discussion about it (they’re too busy, don’t care or they’re lazy)

If you really do want a second opinion from someone else, Stone & Heen, of the Harvard Negotiation Project suggests you should be clear what you’re looking for. Do you want advice? Or do you secretly want someone to rubberstamp your choice?

3. Don’t apply the pressure

If you want to get people to support your decision, try not to pressure them, no matter how enthusiastic you are. If other people feel pushed into a corner, they might agree with you, but only because they have to. You then run the risk of having them sabotage your decision with passive aggressive fault-finding or manipulation. Or they’ll push back and deliberately go for the opposite of what you’ve chosen.

4. Don’t mistake a discussion for an agreement

I once had a chat with my husband over dinner about cars. He talked about getting a people carrier. I wasn’t too keen and made some vague grunts of interest.

Two weeks later he’d bought the car. What I’d thought was a general chat had been a decision-making exercise. Sometimes, people say “yes” or nod or give some verbal indication that they’re listening, but these are “tell me more” signals. If you’re the one coming up with the novel decision idea you may have to ask explicitly “What do you think?” Don’t rely on nods and grunts.

5. Have a conversation

Involve the other person in discussion after you’ve presented your idea. Ask “Can you see any snags in that?” If they disagree with your decision they’ll give you a lot of snags. This allows you to find out what they really object to.

6. Accept that some decisions will bring fear

Some decisions will always be painful no matter how you present them. Asking for a divorce would come into this category. Here the aim is to get the other person to accept that you’ve made the decision, even if they don’t agree with your decision. You have a right to do this – it’s nice to get people to agree with your choices but not always possible.

Decisions are slippery and complex things, and often the only way you’ll know you’ve made the right one is with hindsight. But by bringing both our fast and slow thinking to the task, and figuring out how we can get others on board with our conclusion, we can raise the odds of making the decision that’s the right one, at that time.

Liz started her career with Price Waterhouse and CAP Scientific and left the corporate world when her husband was transferred overseas. On his return, Liz started a complementary therapy practice and ran this successfully for many years. During this time, Liz developed a process that would enable her clients to make emotional and practical change, and has coached over 200 people through difficult waters.

lizcopeland.co.uk; image credit: cc Caleb Ronigk

 

 

Being aware of some of the biases in decision making can help us refine our decision-making process

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