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.
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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
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.
