Decision-making traps

No one is completely safe from bad decisions, regardless of their experience or wisdom. This is the edifying conclusion drawn by experts on decision-making.

Every one of us has encountered many examples of decisions which seem absolutely preposterous after the fact. The 2008 financial market crisis hit particularly hard because people continued to invest even as analysts warned that the bubble was about to burst. How many mergers and acquisitions, like that of Chrysler and GM, proved to be patent failures, just as the experts had predicted? And what can be said about the decision to launch the Columbia space shuttle in 2003, despite very tangible warning signs, or Monsanto’s decision to ignore manifestly hostile public opinion and move forward with launching GMO in the European market? How could so many respected and highly qualified leaders make such serious mistakes?

While, in hindsight, it’s easy to identify poor decisions – both with regard to their disastrous consequences and flaws in the decision-making process – being aware of these errors in the heat of the moment is much more difficult. Indeed, the higher the stakes, the more subject we are to various influences and pressures which can cloud our judgment. The greater the number of decisions to be made, the more short-cuts we use to help us think and decide faster, but which may also cause us to make mistakes. And the more rational and logical we try to be, the less we can control the influence of our intuitions and emotions, etc.

Are we thus doomed to make bad decisions? In part, yes. Even so, we can minimize the risks by understanding common decision-making traps and staying constantly on our toes.