10 tips for avoiding poor decisions

Written by
Robert Kelsey

12 Feb 2016

12 Feb 2016 • by Robert Kelsey

Avoid making bad decisions, have a look these 10 decision-making errors, and how to avoid them. 

1. Assuming extreme outcomes

This is the “all or nothing” thinking typical of those with poor judgement and often due to the fact our emotions – such as fear and greed – have too much influence on decision-making. Most outcomes are incremental: favourable ones facilitating a step forward, while unfavourable ones generate a step back. Yet we tend to assume decisions are either life-changing or ruinous, which inflames our emotions and ups the ante. By creating plans containing small steps rather than giant leaps our emotions should hold less sway when making decisions. 

2. The self-fulfilling prophesy

Sociologist Robert K. Merton identified self-fulfilling prophesies as a “false definition of the situation evoking a new behaviour which makes the originally false conception come true”. In decision-making this is related to “confirmation bias” – a “heuristic” or rule of thumb based on reinforcing our prejudices or inner expectations when making judgements. Again, it’s our emotions playing havoc – making long-term plans essential as a counterweight to any irrational bias.

3. Availability bias

Another decision-making heuristic that harms balanced judgement – this time by making us overly-concerned by what’s in front of us at the expense of what’s out of sight. A decision between two equal job candidates, for instance, usually favours the last interviewee as they had the most recent influence. Something more attention-grabbing also wins out over more thoughtful consideration and, yet again, something with an emotional impact is stronger than something rational. That said, the simple awareness of availability bias is often its best antidote. 

4. False or flawed memories

Logical decision-making is flawed by mistakenly-assuming the circumstances match a previous – usually negative – experience. Sure, there are lessons to be learnt from our mistakes but each decision has a unique context, making concerns about repetition more an emotional barrier than a warning to be heeded. Of course, this can equally work the other way – assuming something will succeed simply because it worked previously. Yet the circumstances are unique, all of which goes to prove just how difficult good judgement can be.

5. Restricting the outcome

Many bad judgements come down to misunderstanding the full range of available options. This is a classic mistake of the young, as they too-often frame questions into “whether or not” decisions. Should they do this college course, or not; go to this party, or not. Yet there is always more than one available choice. Creating a list of nine possible college courses – with the tenth choice a gap-year in Botswana, say – helps frame decisions as positive options. That said, beware “sham options”, falsely offered to give the appearance of width.

6. Making decisions too quickly

“Between stimulus and response there is a space,” wrote philosopher Viktor Frankl. “In that space is our power to choose our response.” In other words, given time, we can choose our best reaction. Too often, we behave reactively when faced with a judgement or dilemma: coming to knee-jerk decisions that are, inevitably, overly-focused on our emotions.

7. Putting off decisions

Yet the opposite is also true. Spending too long musing over decisions smacks of procrastination. Here, we may fear the outcome from execution or even from having to favour one option over another. Stuck, we condemn ourselves to a creeping paralysis in which we become incapable of judgement. The answer – develop a process for decision making, evaluating it from various angles (most importantly our goals). And if that doesn’t work, examine why we’re stalling. 

8. Group-think.

Groups can make strong decisions – bringing different perspectives and removing some of those heuristics. Yet groups have their own traps, the most likely of which is the desire to avoid conflict. This results in consensus-seeking (often lowest common-denominator) decisions. The other is the perceived need to generate “fair” solutions. An alternative is a negotiated decision – basically horse-trading until all sides can live with the choice. 

9. Escalating sunk costs

Yet another emotional concern: if we’ve previously invested time/money/passion into something, we’re more willing to invest more of the same, even once we realise it’s failing to produce the desired results. Too often small failures are turned into major disasters by this “escalation of commitment” – what’s known as “throwing good money [or anything else] after bad”. Yet anything that’s been previously spent is a “sunk cost”, which is a poor justification for further spending.  

10. Superstition

And finally there’s the negative influence on rational decision-making that many, including myself, deny. Even if we avoid the extremes of, say, astrology in decision-making (the indulgence of a surprising number of world leaders) we can still find ourselves wondering whether a particular shirt is lucky or whether “fate” plays a hand in our decisions. It doesn’t, of course, but we’re frail human-beings trying to navigate complex judgements with limited knowledge and, ultimately, unknowable consequences. No wonder we’re tempted to recruit the Ouija board or tarot cards or even just our lucky socks.