Small Business Solutions: We Are All Biased Decision Makers

A global leader in management consulting, McKinsey & Company, recently published an article in their McKinsey Quarterly report that includes an extremely informative interview with one of the firm’s consultants and Stanford University’s Chip Heath, co-author of the new book, Decisive.

The piece, “Making great decisions,” covers the interviewees’ well-informed assertions regarding the ways in which leadership biases affect decision making. One of the key takeaways is that every decision maker is biased, but there are helpful, practical tools that will help us be aware of our biases as we make better decisions.

As a nice follow-up to my most-recently published blog post, “Agility, Wrong Decisions and the Software Industry,” I’ll share with you a few of my favorite quotes from the McKinsey interview:

“… The further up the hierarchy you go, the harder it becomes to say, ‘My judgment is fallible.’ Corporate cultures and incentives reward the kind of decision making where you take risks and show confidence and decisiveness, even if sometimes it’s really overconfidence. Recognizing uncertainty and doubt—it’s not the style many executives have when they get to the top.”

“The number of alternatives that leadership teams consider in 70 percent of all important strategic decisions is exactly one. Yet there’s evidence that if you get a second alternative, your decisions improve dramatically.”

“The trick is collecting information in the context of actual experience. At Intuit, founder Scott Cook developed what they call a culture of experimentation. As he put it, most decisions are based on ‘politics, persuasion, and PowerPoint,’ and none of these ‘three Ps’ are fully trustworthy.”

Those are just a small sample of the breadth of helpful insights you’ll gain by reading the interview in its entirety, which I encourage you to do.

As always, thanks for reading.

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