Strategic decision making is not easy and comes with a number of fallacies that blind us to the actuality of the world around us. Executives should be aware of their bias and how this impacts their strategic decision-making. Using a few critical thinking tools helps to guard the mind from bias and ensure that decisions are more likely to be successful and have the largest impact.
Executives are faced with all types of different types of pressures that range from investors to employees. Each person comes with their own influence and opinion. At times a presiding opinion forms and this puts pressure on everyone else to accept the premises of those opinions without providing critical thought. When you are at the top and your decisions impact a large group of people you don't have the luxury of making momentous mistakes.
The mind is seen as a manufacturing unit that results in the product of thoughts. These thoughts help us to reach conclusions about varying topics, beliefs, debates, and strategies. Like a factory your mind has inputs that come through the senses, previous understandings, and others opinions that make their way into the production process.
Strategic decisions are well thought out and often tested conclusions about how a business should proceed. The best business decisions are something more than opinion and based upon a level of fact that reflects the environment in which the business succeeds. Executives are required to provide the rationale and then the supporting evidence to their decisions.
From a philosophical vantage point few people can step outside
themselves to formulate a true opinion based upon actual observation and fact. The same process applies in many
ways to forming a strategic opinion without the bias of ones past.
Nietzsche once said,
individual has always had to struggle to keep from being overwhelmed by
the tribe. If you try it, you will be lonely often, and sometimes
frightened. But no price is too high to pay for the privilege of owning
The mind is full of fallacies that we pick up from the world around us and social networks in which we exist. Our thoughts are constructed from previous thoughts and ideas based in our childhood experiences, parents beliefs, friends, family and social networks. We are embedded in our social world around us.
Strategic decisions should free itself from these biases as much as possible. This is where the concept of guardians of the mind come into play. By using a few tips it is possible to help avoid disastrous mistakes that cost companies millions of dollars in poor decision making and strategy implementation. Before making an important decision try and consider the following guardians:
-Scientific Management: Use literature, science, and the scientific method to help make your decisions. Look at what has been discovered and what other studies have concluded before finalizing your decision. Basing your decision on sound scientific findings helps to ensure a higher likelihood of success.
-Listen to Your Stakeholders: To be successful a strategy will need a wide group of supporters. This means understanding stakeholders opinions will be important to ensuring that the strategy is designed in a way that is most likely to lead to a successful outcome. The more you listen the more you can create win-win situations.
-Review Your Bias: It is important for the executive to understand the bias he/she has and ensure that those bias are not making their way into the decision-making process. Every person has some level bias based on their background and it is important to ensure the strategy isn't damaged by limited thinking.
-Avoid Group Think: The worst decisions are often made from group think where people in the same social group reaffirm each others beliefs even though these beliefs are no longer rational. Step outside your social group and look for alternative opinions to make sure you are not simply just pleasing your friends and colleagues.
-Rearrange the Data: Sound decisions are based upon data. However, people often take data and jam it together in a way that confirms their pr-existing beliefs. Rearrange the data to find alternative explanations and explore those explanations to ensure they are not more logical and sound.
-Create Feedback Loops: Once a strategy has been implemented it is important to have feedback loops to ensure it is fulfilling its objectives. Feedback loops will help adjust and change the strategy before major damage is sustained. Most strategies will need to be changed at some point.