All too often when we make important decisions (in our lives as well as in business), we allow our judgment to bias our final answers. Essentially we subconsciously seek answers that merely confirm the conclusions we had already come to. It’s the ‘I knew it” or “I told you so” way of thinking. There is a way to avoid that biased way of thinking and improve your sensible decision making skills. Consider this article, written by Ken Tysiac for CMGA Magazine, where he outlines five key decision making skills.
Sensible Decision Making Skills
Many faulty business decisions can be traced to “confirmation bias” that leads people to unwittingly seek information that bolsters what they want to believe, says Brigham Young University accounting professor Doug Prawitt…
Prawitt identified confirmation bias and a phenomenon the white paper calls judgment “triggers” as two particularly damaging “traps” that lead to poor judgment and decisions. He said considering other points of view is essential to avoiding confirmation bias and making good decisions…
“As you evaluate information, always sit back and take time to make the opposing case,” Prawitt said. “… If I’m [a lawyer who’s] going to go into the courtroom, I want to know my opposing attorney’s case better than he knows it.”
Judgment triggers often result from a possible solution’s being misidentified as a problem that needs to be overcome, the white paper says. When a problem is improperly defined, decision makers sometimes move forward without considering other, better alternatives.
Prawitt said that, about 2½ years ago, he and co-author Steven Glover, also an accounting professor at Brigham Young, began working with KPMG to create a professional application for their research on business judgment and decision making. What emerged was a professional judgment framework put into practice by KPMG, which also co-authored the COSO white paper. The framework describes a five-step process for decision making:
- Define the problem and identify fundamental objectives.
- Consider alternatives.
- Gather and evaluate information.
- Reach a conclusion.
- Articulate and document rationale.
The five sensible decision making skills presented in this article are extremely basic. In fact, they are too basic to imagine executive teams or executive boards would take them seriously. When writing an academic paper I could see using these tips, but for business and important decisions in life, I think much more strategic information would be needed.