How can you avoid making bad decisions?

When it comes to decision-making, you should veer away from old habits — what you have done in the past, what’s comfortable. Etymologically, the word de-cision comprises the notion of cutting or severing.

Choosing means ceaselessly rejecting the person you are for the person you could be. It implies a spirit of adventure. Paul La Cour (Denmark)

Disruption makes us grow. Freud

To make healthy decisions, ensure you must remain receptive to your environment (including the international environment) at all times and take an interest in current events.

It’s better to toss a question about without making a decision than to make a decision without tossing the question about. Joubert

Decision makers rely on their intuition more than they realize. While intuition is needed to deal efficiently with the overwhelming number of decisions leaders face, it’s also associated with powerful cognitive biases. Those that try to overcome this problem by verifying their every intuition are likely to end up suffering from decision fatigue.

Challenge your initial impulses, because they are quite good. Attributed to Talleyrand

Careful, intuitive and impulsive decision-making isn’t entirely reliable! Common misconception: intuition can’t help you make rational decisions. Fact: perfect information doesn’t exist. It’s your ability to see the big picture, not the comprehensiveness or flawlessness of the information, that makes for a good decision. The accumulation of a wealth of experience (composed of both past mistakes and successes) enables leaders to intuit the smallest details, taking into account all facets of a problem. Intuition is not about premonition, divination, or mysticism. The power of intuition is to provide a global vision of a situation, while intellect makes it possible to set a course.

But, beware! Intuition is not foolproof. Once again, calling on your network to get multiple points of view is a great safeguard against poor decisions. Collective decision-making is truly a viable solution. Including more people in important decisions is the most effective way for leaders to overcome cognitive bias and avoid making the wrong calls, because, as 2002 Nobel Prize laureate Daniel Kahneman notes, “it is easier to recognize other people’s mistakes than our own.”

According to Daniel Kahneman, there are two important facts to know about the human mind: it’s often blind to the obvious and blind to its own blindness. In general, leaders are too trusting of their own judgment, convinced they have a rational basis for their decisions. And yet, in Kahneman’s studies, the judgment of decision-makers, including highly trained logicians and statisticians, was repeatedly compromised by cognitive bias. All leaders are vulnerable to cognitive bias and are better at identifying and overcoming the cognitive biases of others than their own. This is why collective, participative decision-making results in more sustainable outcomes.

Constantly remaining receptive to your environment also means asking other people for their opinions prior to decision-making, while still preserving the responsibility of the final choice.

There is an old proverb that says the gladiator should garner advice from the arena. Sénèque

Historically, the greatest triumphs and most important decisions have been attributed to individual leaders, who are followed by a large majority of mere “sheep.”

As Brook Manville and Thomas Davenport point out in Judgment Calls, the business world is endlessly creating “Great Men Fables” — narratives in praise of the decision-making genius of individuals, such as Jack Welch and Steve Jobs. Today, however, a shift is taking place, away from overly simplistic ideas of individual decision-making genius towards a more balanced and complex recognition of the contribution of all employees to company performance. This shift is reflected in the growing emphasis on tapping the wisdom of the crowd in organizational decisions via Web 2.0 and data analysis tools.

When a leader’s past experiences are connected with strong emotions, he might not be convinced by conflicting new information and data. Discuss and debate issues with third parties or a decision-making committee. The goal is to identify and avoid biases and cognitive traps and explore the pros and cons of alternative possibilities. This safeguard stems from the idea that the best solutions result from collaborative efforts. You reach more effective decisions when issues are discussed among people with divergent views.

Some leaders’ charisma, influence, and ego are so highly developed that it is extremely difficult to call their choices into question or incite them to reconsider their positions. In that case, create a governance unit to approve or veto the leader’s decisions. Ideally, such a team or committee is composed of independent, “trustworthy” people with no executive power. They can ensure decisions are made objectively and help to prevent bad choices from being executed.

Well, no, sometimes nothing can prevent a decision from going off the rails. “Collective decisions” don’t always work, partly because the most important decisions are often made behind closed doors. The takeaway lesson: decision is not what is said but what is actually done. In real life, things don’t always happen the way the big bosses imagine they will. Read “Execution as Strategy” by Mauro F. Guillén and Esteban Garcia-Canal, published in the Harvard Business Review in December 2012. Companies from emerging markets are dominating markets in which large multinationals have failed. These companies are proving themselves to be more reactive, flexible, agile, and daring—in short, savvier—than multinationals and all their multiple scenarios and option planning. Intelligence today lies more in setting directions collectively and self-organizing to execute in volatile and chaotic environments than in strategic decisions and insular planning for orderly execution. Don’t confuse collective intelligence with collective decisions!