Leaders need to know the difference between haste and speed, particularly when it comes to their thinking.
In modern business, we seem to be in the habit of needing to be ‘fast’ to just keep up. However, going too fast can get leaders stuck in a ‘speed trap’ that can get you and your business into trouble. Feeling pressured to make fast decisions – and even feeling that you have to make decisions for others when they can make them for themselves – can be critical leadership errors that can impact upon your leadership (and whole organisation) performance.
Decision making requires an appropriate amount of thinking. What we have learned through behavioural economics and psychology, is that there are common errors inherent in thinking. These errors, although well documented, are routinely made by almost everyone. Leaders, under pressure to take decisions, often fall foul of these errors, sometimes with catastrophic outcomes.
Great leaders do something different in their decision making.
As we process information, we can use two types of thinking approaches – fast (automatic) thinking and slow (conscious and considered) thinking. There is a powerful place for both in great leadership thinking, however the habit of speed often leads to short cuts that lead to errors and poor decisions.
Going too fast can put you into the ‘speed trap’ – you cause big problems and actually get to where you want to slower than if you didn’t rush in the first place.
The dangers of thinking too fast:
When we ‘think fast’, we often make cognitive errors and jump to conclusions that are false – or even dangerous. Examples of this thinking includes making cognitive errors, such as :
Cause effect error
It is a natural inclination to see a ‘story’ behind every piece of information. As humans, we are programmed to look for cause-effect links (X happened because of Y) and have difficulty processing correlation and randomness. If we rush to find meaning or story in information, it locks in that connection – which can be dangerous to the business moving forward. Many times a hastily derived -and incorrect -story has led to really bad decision making and business actions. (For example “Donald Trump would make a great president BECAUSE he was a successful businessman”, is a cause-effect pairing that may or may not be accurate, but can greatly skew decision making about that candidate.)
The ability to hold facts as separate and not rush to make a story from them takes effort. By being comfortable with ambiguity, not knowing (the story) and accepting correlation before determining causation, many false ‘trails’ of decision making can be avoided altogether.
We see things that we believe (thanks to our stories) as being certain, rather than open to doubt. If we strongly believe in a plan, then we are likely to see its outcome as ‘certain’. It is OK to sell it as certain, but we need to have an understanding of the uncertainties so that we can properly examine and deal with the risks and potential issues that could emerge.
Certainty error blinds leaders to risk. It is often derived from a ‘feeling’ – and it is som much more comfortable for leaders to sit with ‘certainty’ than the feeling of being uncertain or even out of control.
The ability to sit with a feeling regardless of how unpleasant it is, and base the decision making off fact is critical to making great decisions. Allowing your feelings to blind you to risk is a massive opportunity for calamity to occur.
Humans are intrinsically poor at estimating probabilities. We will overestimate the chance of success of a small percentage play, particularly if we have committed to it. This leads to highly risky actions often being chosen when there is little hope of a payoff. We often see this as leaders ‘double down’ or go for a ‘Hail Mary’ chance, on the belief that the probability is higher, and the potential loss is intolerable. This leads to so many bad decisions, and programs continuing when they are harmful and destructive to the business. The better option (and more difficult) is often choosing to cut your losses.
Low effort error (pattern matching)
We jump to conclusions as soon as we detect a pattern: for example, what comes next? Apple, Orange…… What if the correct answer was telephone? Because we have detected a pattern, we leap to the answer that we know that best suits that pattern.
Humans are pattern matching machines. We look for patterns (and stories!) everywhere. This is one of the most common errors made in decision making – leaping to a conclusion based on a wrong or incomplete pattern of information. This conclusion, when used in complex decision making, can introduce massive error.
To avoid this error, it is often useful to explore ‘what other answers match this pattern?’ and ‘what level of certainty to we need to know that this pattern is real?’ If 2 customers suddenly want red, there is to data points. If 100 want red, perhaps that is now a pattern or trend?
When we make a decision, we are great at finding things that support or confirm that decision, and even better at overlooking things that challenge it. This means that we often get stuck on a course of action, even if the evidence speaks against continuing. This leads to projects continuing well past their true use by date.
This is also why people get stuck in fixed positions in arguments, conversations and negotiations. They have absolute certainty that their position is correct. This certainty acts as a barrier to exploration and conciliation.
Great leaders continuously check those things that they are certain about, and are open to learning that their certainty may have been misplaced.
Most people are more likely to ‘trust their guts’, use their intuition or bring emotion into the equation, even when it stops quality rational thinking. Emotional reasoning – or acting and deciding because of how you feel – is fraught with error and danger. Most people do not have the emotional differentiation to truly understand what a feeling represents, or have the capacity and insight to understand how or why it was generated. In very unique circumstances (high experience), intuition is OK to use. Apart from this, it is often the worst way to make a decision (and completely illogical).
Great leaders accept the feelings that they have, then use logic, information and decision making processes to get the best possible outcome for a decision – regardless how they feel.
All at once?
These errors don’t just happen one at a time. Often, people are making some or all of these errors, simultaneously. They see a pattern and make a story, they feel good about it, they minimise risk, they overstate the probability of success, they like the way the certainty feels, they jump to conclusions and only see what agrees with their position. And that is all before they have had their first cup of coffee.
Self awareness is key
Leaders that are self-aware of their feelings, their thoughts and their decision processes have a massive advantage – they can use this knowledge to intervene and not let these biases ruin great decision making. Taking time to reflect on decisions and learning the traps that you fell into is a great process that brilliant leaders use to help continue to improve their decision making processes
What else can you do?
Decide how to decide. If you know how decisions will be made, it sets up a structure to slow thinking down, to meet minimum decision requirements, and avoid many of the thinking biases.
Know what is enough. On the other hand, knowing when enough is enough – when a decision can be made – is important. Not taking decisions that can reasonably be taken (knowing the risks involved) is often as dangerous as making decisions that should never be made.
Understand intuition. Knowing that intuition is valuable in fields of high expertise means that you can use short cut thinking where you have extensive experience, and the decision replicates other decisions taken before. Using your ‘intuition’ outside of this expertise frame is a recipe for cognitive error.
Slow down to speed up. Often taking time to slow down with the thinking can speed up getting to the right result. Take the time to think, don’t just rush.
Great leadership decision making takes effort and time.