Make Better Decisions, More Often

In a survey of top executives, the results showed that executives made “sound decisions” only 52% of the time.

That’s only 2% better than flipping a coin. So if you could improve just a few percent, you could be in an elite class of decision-makers.

Why only 2% better than flipping a coin? There are three reasons:

1. Their extensive industry knowledge and expertise.

2. Their reliance on analysis and critical thinking

3. Their limited perspective.

Industry knowledge and expertise

By the time you become the decision-maker, you have accumulated extensive knowledge and experience in your industry, market, products, and services.

You have talked to many customers.

You know how what works and what doesn’t work.

You have established patterns and processes and probably have established a culture of how we do it here.

Don’t limit yourself  to your expertise and your built-in biases

While all of this is necessary, it has also established automatic patterns of thought, which you can refer to quickly.

And at the same time, it limits your ability to think outside of your industry and market to understand how other markets and industries think about the problem or opportunity.

So they decide based on past thinking rather than exploring new ways to think about the problem or opportunity.

Hearing about how different markets do something can often give you additional ideas on how

you might also use this idea or process to solve a problem or improve their strategy, product, or service.  

Overreliance on analysis and critical thinking

Most people were taught that if you gather enough information and analyze the data thoroughly,

you will develop “the way” to solve the problem or create a better way forward.

Ufortuanlly, this does not often work because the data you are analyzing is all about the past, not the future.

So, if you need to move forward into the future, all those old solutions and ideas will not work.   

The Critical Thinking Process

Critical thinking is a good process and should be used, but the object of critical thinking is to judge whether the information you have is correct or not.

It is undoubtedly important to understand the problem or opportunity,

but it will not help you look into the future to solve this new problem or exploit this unique opportunity.

Another view

Here’s an article from Forbes if you want another view.  

Here is the caution when dealing with averages and human behavior data.

As you know, there are many variations in personal values within that average.

So, if you are thinking about behavior, be sure to take into account all the possibilities that data includes.

Market segmentation and psychographies will help get your thinking started.

Here is a traditional view of critical thinking from the Critical Thinking Organization.

Limited perception

The first and maybe most important thing you need is to see the problem or opportunity. In other words, your perception.

It is your perception that will help you design a solution. One of the best ways to explain this is with an example.

Here’s an example from Edward de Bono.

A group of 12-year-old boys was always picking on Bobby, one of the boys. Because that is what they do at that age.

One day, they showed Bobby two coins, a larger one worth one dollar and a smaller one worth two dollars, and they told Bobby he could pick one of the coins and keep it.

Bobby picked the larger coin, and of course, the other boys laughed and talked about how dumb Bobby was.

They made this offer every time they wanted a good laugh at Bobby’s expense. 

One day an older man saw what they were doing and told Bobby that the smaller coin was worth twice as much as, the larger coin.

Bobby said he knew that. But if he took the two-dollar coin, they wouldn’t keep coming back and giving him additional coins.

There is a distinction between a perception and a concept.

Perception is a grouping of things realized when we look out at the world—for example, a mountain.

A concept is a grouping of things discovered when we look inwardly at our experience.

A concept has a purpose or benefit—for example, a takeout restaurant.

Also, a concept always consists of both the concept and its implementation.

Conclusion

I want everyone to make better decisions more often, me included.

Expertise and analysis are essential, but you have to look forward rather than just backward.

You may also have to broaden your perception if you want to move forward.

So, your perception of the situation, which is often not considered, is critical to what kinds of decisions you will make. 

PS.  If this information helped you with your decision-making, let me know how it helped (or did not help) so we can help others.