In episode 3 of the current series of Young Apprentice, the candidate Hannah Richards lost her place in the competition because of her poor decision making in the boardroom.
In Hannah’s case, she let personal loyalties and enmities over-ride good judgement, but this is not the only reason for failed boardroom decisions. In fact there is a whole array of decision-making traps available to us. Let’s look at a small sample:
1. The Anchoring Trap
In a discussion at a board meeting, if the first speaker has a strong opinion, they can sway the whole tone of the debate, focusing not on what is right, but on the extent to which the first speaker is right. This “first speaker advantage” can lead to poor decisions, when the first speaker takes an extreme position.
2. The Confirming Evidence Trap
When a Board approaches a consensus view it will rarely discuss information that conflicts with this view, focusing rather on evidence that confirms it.
3. The Sunk Cost Trap
Board members invest a lot of political and social capital in key decisions that can make those decisions hard to reverse if the situation changes or new information comes to light. Errors can be perpetuated and good money thrown after bad.
4. The Seduction of Appearances Trap
Beautifully and eloquently presented evidence often carries more weight than more robust but less attractively presented evidence. This is one of the reasons why PowerPoint-style presentations are a dangerous component of any board meeting.
5. The Prudence Trap
Caution is wise. Risk is dangerous. Uncertainty is risky. Prudence is called for. But risk can be managed and the status quo is also a dangerous strategy in fast-changing times. Risk-taking is neither good nor bad, but a strategy to discuss and evaluate in the light of all options and all mitigating strategies.
Good Decision Making is an Art
… and a science too. There are a lot of tools you can draw upon and it is also important to understand the vital role of intuition, when you are operating in complex environments, where you have substantial relevant experience.
Management Pocketbooks you Might Enjoy
The Decision-Making Pocketbook is filled with practical tools to support decision making.