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THE HIDDEN TRAPS IN DECISION MAKING

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Dtech Systems Co.

The way human brain works can sabotage the choices we make. But bad decisions can often be traced back to the point where the decisions were made. The key is how a problem is framed and how to develop the solution. Find more at: https://www.dtechsystems.co/resources/

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THE HIDDEN TRAPS IN DECISION MAKING
Research reveals a number of traps that affect how we make business decisions. Though we can’t get rid of them, we can become more aware of them, monitoring our decision making.
Traps of Decision Making • Anchoring • Status Quo • Sunk Cost • Confirming Evidence • Framing • Overconfidence • Prudence • Recallability
Anchoring 1 What we see or hear first feels most important. Which gives disproportionate weight to the information received.
WHAT TO DO ABOUT IT The Anchoring Trap • Take a different perspective • Think before asking • Seek input • Avoid anchoring others
Status Quo 2 We prefer things to stay the same even when better alternatives exist.
WHAT TO DO ABOUT IT The Status Quo Trap • Consider your objectives • Know you have options • Don’t exaggerate switching costs • Don’t settle
Sunk Cost 3 We make decisions that justify past choices even when they no longer seem valid.
WHAT TO DO ABOUT IT The Sunk Cost Trap • Involve outsiders • Accept that mistakes happen • Allow room for failure
Confirming Evidence We seek information that supports our existing point of view and reject anything that doesn’t. 4
• Consider all evidence • Find a devil’s advocate • Avoid people who don’t agree with you WHAT TO DO ABOUT IT The Confirming Evidence Trap
Framing 5 The way we state the problem influences what we decide. We misstate a problem by defining a choice as a gain or a loss, even when it’s really neither one.
WHAT TO DO ABOUT IT The Framing Trap • Always reframe • Think in neutral terms • Challenge other’s frames
Overconfidence 6 We tend to trust our own estimates too much. We put too much trust in the accuracy of our forecasts.
• Look at the extremes • Challenge those extremes • Question estimates WHAT TO DO ABOUT IT The Confirming Evidence Trap
Prudence 7 We adjust estimates to be “on the safe side.” We often use excessive caution when we try to predict uncertain events.
WHAT TO DO ABOUT IT The Prudence Trap • Aim for accuracy • Ask others to do the same
Recallability 8 We are overly influenced by our past experiences. Which prompts us to give undue weight to recent dramatic events.
• Examine assumptions • Check the facts WHAT TO DO ABOUT IT The Confirming Evidence Trap
Awareness Your Best Weapon The best protection against all psychological traps is awareness.
YOU CAN CONTACT US AT ThankYou 00966 56 100 4748 info@dtechsystems.co www.dtechsystems.co

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THE HIDDEN TRAPS IN DECISION MAKING

  • 1. THE HIDDEN TRAPS IN DECISION MAKING
  • 2. Research reveals a number of traps that affect how we make business decisions. Though we can’t get rid of them, we can become more aware of them, monitoring our decision making.
  • 3. Traps of Decision Making • Anchoring • Status Quo • Sunk Cost • Confirming Evidence • Framing • Overconfidence • Prudence • Recallability
  • 4. Anchoring 1 What we see or hear first feels most important. Which gives disproportionate weight to the information received.
  • 5. WHAT TO DO ABOUT IT The Anchoring Trap • Take a different perspective • Think before asking • Seek input • Avoid anchoring others
  • 6. Status Quo 2 We prefer things to stay the same even when better alternatives exist.
  • 7. WHAT TO DO ABOUT IT The Status Quo Trap • Consider your objectives • Know you have options • Don’t exaggerate switching costs • Don’t settle
  • 8. Sunk Cost 3 We make decisions that justify past choices even when they no longer seem valid.
  • 9. WHAT TO DO ABOUT IT The Sunk Cost Trap • Involve outsiders • Accept that mistakes happen • Allow room for failure
  • 10. Confirming Evidence We seek information that supports our existing point of view and reject anything that doesn’t. 4
  • 11. • Consider all evidence • Find a devil’s advocate • Avoid people who don’t agree with you WHAT TO DO ABOUT IT The Confirming Evidence Trap
  • 12. Framing 5 The way we state the problem influences what we decide. We misstate a problem by defining a choice as a gain or a loss, even when it’s really neither one.
  • 13. WHAT TO DO ABOUT IT The Framing Trap • Always reframe • Think in neutral terms • Challenge other’s frames
  • 14. Overconfidence 6 We tend to trust our own estimates too much. We put too much trust in the accuracy of our forecasts.
  • 15. • Look at the extremes • Challenge those extremes • Question estimates WHAT TO DO ABOUT IT The Confirming Evidence Trap
  • 16. Prudence 7 We adjust estimates to be “on the safe side.” We often use excessive caution when we try to predict uncertain events.
  • 17. WHAT TO DO ABOUT IT The Prudence Trap • Aim for accuracy • Ask others to do the same
  • 18. Recallability 8 We are overly influenced by our past experiences. Which prompts us to give undue weight to recent dramatic events.
  • 19. • Examine assumptions • Check the facts WHAT TO DO ABOUT IT The Confirming Evidence Trap
  • 20. Awareness Your Best Weapon The best protection against all psychological traps is awareness.
  • 21. YOU CAN CONTACT US AT ThankYou 00966 56 100 4748 info@dtechsystems.co www.dtechsystems.co