9 Habits That Lead to Terrible Decisions

Jack Zenger

Jack Zenger

Here is an excerpt from an article written by Jack Zenger and Joseph Folkman for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of
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Several years ago we came up with a great idea for a new leadership-development offering we thought would be valuable to everyone. We had research demonstrating that when people embarked on a self-development program, their success increased dramatically when they received follow-up encouragement. We developed a software application to offer that sort of encouragement. People could enter their development goals, and the software would send them reminders every week or month asking how they were doing, to motivate them to keep on going. We invested a lot of time and money in this product.

Joe Folkman

Joe Folkman

But it turned out that people did not like receiving the e-mails and found them more annoying than motivating. Some of our users came up with a name for this type of software. They called it “nagware.” Needless to say, this product never reached the potential we had envisioned. Thinking about the decisions we had made to create this disappointing result led us to ask the question, “What causes well-meaning people to make poor decisions?”

Some possibilities came immediately to mind – people make poor decisions when under severe time pressure or when they don’t have access to all the important information (unless they are explaining the decision to their boss, and then it is often someone else’s fault).

But we wanted a more objective answer. In an effort to understand the root cause of poor decision making, we looked at 360-feedback data from more than 50,000 leaders and compared the behavior of those who were perceived to be making poor decisions with that of the people perceived to be making very good decisions. We did a factor analysis of the behaviors that made the most statistical difference between the best and worst decision makers. Nine factors emerged as the most common paths to poor decision making. Here they are in order from most to least significant.

[Actually, here are the first three of nine habits.]

o Laziness. This showed up as a failure to check facts, to take the initiative, to confirm assumptions, or to gather additional input. Basically, such people were perceived to be sloppy in their work and unwilling to put themselves out. They relied on past experience and expected results simply to be an extrapolation of the past.

o Not anticipating unexpected events. It is discouraging to consistently consider the possibility of negative events in our lives, and so most people assume the worst will not happen. Unfortunately, bad things happen fairly often. People die, get divorced, and have accidents. Markets crash, house prices go down, and friends are unreliable. There is excellent research demonstrating that if people just take the time to consider what might go wrong, they are actually very good at anticipating problems. But many people just get so excited about a decision they are making that they never take the time to do that simple due-diligence.

o Indecisiveness. At the other end of the scale, when faced with a complex decision that will be based on constantly changing data, it’s easy to continue to study the data, ask for one more report, or perform yet one more analysis before a decision gets made. When the reports and the analysis take much longer than expected, poor decision makers delay, and the opportunity is missed. It takes courage to look at the data, consider the consequences responsibly, and then move forward. Oftentimes indecision is worse than making the wrong decision. Those most paralyzed by fear are the ones who believe that one mistake will ruin their careers and so avoid any risk at all.

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Here is a direct link to the complete article.

Jack Zenger is the CEO of Zenger/Folkman, a leadership development consultancy. He is a co-author with Folkman of the October 2011 HBR article “Making Yourself Indispensable.” Connect with him at twitter.com/jhzenger. To learn more about him, please click here. Joseph Folkman is the president of Zenger/Folkman. Connect with him at twitter.com/joefolkman. To learn more abouyt him, please click here.

 

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