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Heath Offers a Path to Better Decision-Making

By Bill Leonard  6/19/2013
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One day, Dan Heath said, he realized that although business success hinges on the decisions that leaders make, there is no training or education on decision-making. He and his brother then began to write the best-selling book Decisive: How to Make Better Choices in Life and Work (Crown Publishing, 2013).

“Bad decisions can have a major economic impact,” Heath said during the June 19 afternoon Masters Series session at the Society for Human Resource Management (SHRM) Annual Conference & Exposition. “Research has shown that 80 percent of mergers and acquisitions create no value. How can this happen when we are talking about decisions that business leaders obsess over and look at from every angle?”

Heath told the audience that there are four “villains” when it comes to decisions that can put a decision-maker on the wrong path:

1. Narrow framing, or putting on blinders and limiting options.

2. Confirmation bias, or using preconceived notions to make a decision.

3. Short-term emotions.

4. Overconfidence.

“Being aware of these villains won’t help us from making bad decisions,” he said. “So, we must have a process in place to ensure that we counteract” them.

Heath said HR professionals are uniquely positioned to help their organizations put a process in place to make better decisions. Four steps that can help organizations avoid bad decision-making, according to Heath, are:

1. Widen your options.

2. Reality-test your assumptions.

3. Get distance before deciding.

4. Prepare to be wrong.

Heath pointed to research conducted by Carnegie Mellon University examining the decision-making processes of teenagers. The research found that teenagers tend to be blind to their options and boil their decisions down to a whether-or-not proposition of only one option. He said researchers found that teenagers only considered more than one alternative 30 percent of the time.

Surprisingly, another study, conducted by Ohio State and Mississippi State universities, found that out of 168 business decisions, the CEOs thought about more than one option only 29 percent of the time.

“So, essentially what the study found is that business leaders are pretty much using the same decision-making process as a teenager,” Heath said. “And that’s a pretty frightening thought, isn’t it?”

Research has shown, according to Heath, that adding just one more option to the decision process boosts the chances for success significantly.

“And if we can realistically boost our success rate by following these processes and suggestions, why wouldn’t you want to do so?” he concluded.

Bill Leonard is senior writer for HR News.

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