5 Ways to Make Better Decisions

We recently wrote about decision-making and covered the decision-making process. We also dove into why good leaders need to be good decision-makers and tips to sharpen this essential skill. 

Here, we focus on one of the biggest roadblocks to sound decision-making: cognitive bias. 

Each person has cognitive biases as unique as they are. Becoming aware of these biases and overcoming them keeps the decisions you make fair, balanced, and rooted in fact. 

Keep reading to learn more about good decision-making, how cognitive bias gets in the way, and five skills to put into practice.

The Importance of Sound Decision-Making

When stepping into a leadership role, you assume the responsibility of making a wide variety of decisions. When decisions are made effectively, organizational processes run smoothly, morale stays high, and employees get more done. 

Let's take a look at what happens when good decisions are made: 

Productivity

When a leader masters effective decision-making, employee productivity increases. Timely decisions push projects forward, eliminating managerial bottlenecks. Critical tasks often get stalled when teams are stuck waiting for an answer from management. If a leader knows how to quickly come to the right decision, employees can move ahead.

Problem-Solving

Challenges within an organization require leaders to carve a path forward. Determining the right solution through efficient decision-making solves problems and creates positive outcomes. Operations run more smoothly when decisions are made both swiftly and effectively

Motivation

Through example, leaders who master the art of decision-making motivate managers and employees. Leaders who remain consistent with good decision-making empower other employees in their own decision-making development. When an organization's talent feels confident, they're more likely to take healthy risks and share new insights.

Save Time

Poor decision-making wastes time, especially when it stems from leaders.T oday's busy organizations have packed schedules and lots of teams to manage. Effective decision-making from the top down helps employees know exactly what to do and eliminates gray areas. Having clear direction from leadership saves the organization time (and money).

Now that we understand the benefits of good decision-making, let's explore how cognitive bias in decision-making can interfere.

How Do Cognitive Biases Influence Decision-Making

Cognitive biases are systematic patterns in thinking that can be irrational. There are many different types. In fact, scientists believe there could be more than 160 biases in existence!

Our unique biases serve as short-cuts for the mind to help us navigate our worlds. However, they can negatively impact decision-making and lead to undesired results. 

Here are just some of the ways cognitive bias impacts how we make decisions:

• Information Overload: When we have too much information to process, we tend to notice things related to what’s already stored in our memory. Additionally, bizarre or striking things stand out to us over the mundane, causing us to skip over information we may label as "ordinary." As a result, we may miss key information needed to make an appropriate decision.
  
  
• More to the Story: On the other hand, when we don't have enough information, we tend to find stories and patterns in whatever we do have. We combine available data with what we already know to try to put together a full story. However, this often means we're filling in gaps with guesses over facts.
  
  
• Pedal to the Metal: When we're under pressure to solve a problem quickly, our brains tend to favor immediate, relatable information over what happened in the past. We also tend to favor options that seem simple over those we perceive as complicated. Sure, we may choose the quick and dirty option to get things done, but it could come at a cost. Decision-making suffers when we don't slow down to look at the full picture. 
  
  
• Bandwagon Effect: This bias occurs when we adopt an idea or make a decision simply because others are doing the same. The desire to follow the crowd can overshadow our own judgment, making it harder to consider whether the popular choice is truly the best one. In decision-making, this leads us to make choices based on group opinion rather than our own independent thinking.
  
  
• Actor-Observer Bias: This bias causes us to interpret our own actions and others' actions differently. When we make decisions, we often give ourselves the benefit of the doubt, blaming outside factors if things go wrong. But when we observe others, we tend to blame their actions on personal traits. This bias can cloud our judgment, preventing us from making fair assessments of situations.
  
  
• Sunk Cost Fallacy: This occurs when we continue investing in a decision, project, or relationship because we've already spent time, money, or effort—even when it’s clear that moving forward isn't the best option. This bias leads us to throw good resources after bad, unable to let go because of what we've already invested, even if cutting our losses would lead to better decisions in the long run.
  
  

  When it comes to cognitive bias, no one is immune. When we become stressed, fatigued, or fall under pressure, we tend to let our biases take the wheel. 

  It's tough to make decisions based on careful reasoning when we don't feel mentally or physically at our best. However, through practicing the right skills, we can train our brains to make the most effective decisions no matter what.

Five Skills to Help Leaders Overcome Cognitive Bias

1. Write it down. When a problem arises, clearly define it in writing. Writing removes ambiguity and ensures everyone involved has the same understanding. It also helps you capture and organize facts, keeping any preconceived notions at bay.
   
   
2. Make it a group effort. In key decisions, involve others, especially those with diverse perspectives and viewpoints. Include stakeholders from each team involved to capture possible solutions from all angles. This will increase decision quality.
   
   
3. Slow down and review. If you have any immediate assumptions or biases that could influence your decision-making, document those assumptions and take time to review them. Over time, this increases your self-awareness and allows you to make the right decisions as quickly as possible.
   
   
4. Develop a growth mindset: When you commit to overcoming your own personal biases, you commit to becoming a better decision-maker. Build healthy bias-busting habits, like mindfulness meditation. In meditation, we strengthen our awareness, and focus, which over time can help make us less impulsive.
   
   
5. Know you won't always get it right. Separate good decisions from bad outcomes. Our world is uncertain and sometimes, good decision processes lead to bad results. Take such experiences as learning opportunities and choose differently in the future.
   
   

Unleashing the Potential of Your Organization

Sound decision-making isn't a quality we're born with. It takes time, effort, and practice to develop the effective skills we need as leaders. 

The good news? A willingness to explore and remove our cognitive biases allows us to make better decisions in the long run.

If you'd like to learn how to sharpen your leadership skills and become a better decision-maker for your organization, connect with us or consider attending one of our upcoming leadership events.