The recallability decision-making trap prompts us to give undue weight to recent dramatic events.
Illustration: We were at the beach recently, and my son got stung by a jellyfish. And to be fair, this was no minor sting.It was one of the worst stings I’ve ever seen, with the burns all over his arms, legs, and side. Needless to say, my son(who is 5 years old) informed me that he would never swim in the ocean again. I told him son, you’re falling into the recallability decision making trap. I’m kidding… but he was definitely giving undue weight to recent dramatic events.
In business, I have made this decision-making error most often in the area of sales calls or activity. There have been times where an appointment will just go really badly. I can think of one time where a 30 minute sales call turned into a 2 hour ordeal and of another time where we literally couldn’t get to an important appointment due to traffic in downtown Nashville because of the NFL draft preparation.
Sometimes right after failures like that, it’s hard to shake it off and move on to the next one. The recent dramatic events loom large in your mind.
This trap is overcome by discipline and determination. Sometimes you will dramatically fail. And sometimes you will dramatically win. The key is to not give undue weight to either event. Keep plugging away and know that each new day presents new opportunities and challenges. With that mindset, you’ll be back in that ocean water sooner than you know. Oh, and my son was back in the water the next day.
Prudence leads us to be overly cautious when we make estimates about uncertain events.
Illustration: You’ve invited 100 guests to a backyard barbeque party. You don’t think you’ll have more than 25-35 attend. So you only prepare enough food and arrangements for 30 or so people. 60 end up coming, and prudence has caused you a serious headache.
Prudence is the other side of the coin of overconfidence.
Pessimism and optimism are closely related. Just as unbridled optimism can get you in trouble at times, so too can unnecessary pessimism.
In business, accuracy in estimation and forecasting requires you to rely on data and maybe a little intuition mixed in there. It can’t be purely gut feeling or emotion.
The prudence decision making trap can cause you to be unprepared to capitalize on real potential opportunity. As leaders and managers, we must avoid the error of being overly prudent and cautious so that we can confidently take the next steps needed to achieve growth.
Framing occurs when we misidentify the problem, undermining the entire decision-making process.
Illustration: There is a small fire in your kitchen over your stove. You make the decision to put it out with a glass of water you had close by. Unfortunately, it was a grease fire, so the water only helped to take the fire to the next level. You misidentified the problem. And so your solution didn’t work because it was made to solve a different problem.
In work this can happen on the regular. Our employees or co-workers will come to us for help to address a situation. They’ll present the issue, and we’ll develop a solution to solve that problem.
If we’ve made a framing error, then often times it’s a little later down the road that we realize that our solution — though maybe a good one for a different problem — didn’t fix the actual problem.
The vast majority of the time, this decision making trap is completely innocent. If you’ve got a good team, you can count on them to not intentionally withhold information from you while we develop a solution. The trap happens though, because often times we don’t see the whole picture. We’re looking at one frame, and it’s the wrong frame.
Best solution here. When being asked to help solve a problem, make sure you get in some good questions. Don’t take it for granted that your team has already correctly identified the root problem. Do a bit of digging and after some more dialogue, you’ll be well on your way to avoid this decision making trap.
So what are some good questions? I’m going to give you 2 that will get you started down the question path.
The Why question. Simply ask, why do you think this has happened? A lot of times when trying to solve a problem, we’re quick to ask the who, what, when and how questions so that we can grasp the situation at hand. While those are necessary questions, they won’t help insulate you from the potential framing error. When someone answers a why question, they will reveal their presuppositions and beliefs about the problem at hand. This normally opens up opportunity for additional questions.
These are simple but effective questions. It’s key to realize that both of these questions will inevitably lead to more questions, and that is part of why they’re effective.
Give these a try, and hopefully you can steer clear of the framing decision making trap.
Overconfidence makes us overestimate the accuracy of our forecasts.
Illustration: You just started a fitness routine and you dropped 3 lbs in 3 days. That means if you keep this up for 15 days then you’ll lose 15 lbs. Overconfidence.
Picture this at work: the first 10 days of your sales month have been really strong, forecasting to an all time high for the month. You’re confident your forecast is accurate so you get distracted and divert your attention elsewhere. It’s easy to do, and I say that from personal experience.
Best practice to temper overconfidence? As my dad always says: not too high, not too low. Just keep plugging away. Extend the scope of the data you reviewed.. let’s not just look at July. Let’s look at the whole quarter. Let’s not look at last year’s sales, but let’s look at the average of the last 3 years.
The best medicine for overconfidence is a steady dose of humility and hard work ethic. Doesn’t hurt to have a seasoned veteran in the office to help keep everyone grounded. Let’s focus on today and take care of what needs to be done, today. Tomorrow will come soon enough.
Confirmation Bias leads us to seek out information supporting an existing predilection and to discount opposing information.
Illustration: You’ve just had a heated discussion with a friend about which musician is better between Adele and Justin Timberlake. You, being wise, know that JT is one of the bests of all time. So you pull your phone out and do a quick Google search. “Why Justin Timberlake is the best musician of all time.” Congratulations, you just committed Confirmation Bias. A google search without confirmation bias would have been more like “who are the best musicians of our time and why?”
At work it might play out like this. A sales rep managing an account is concerned about the trajectory of a major client. They just got out of discussions with a key decision maker where he was informed of a new wrinkle in the purchasing process that could really affect our position with them if we don’t adjust, and he just can’t stop the feeling.
You’re an optimist, and also prone to committing confirmation bias, so you pull up recent sales year over year and inform your rep that, “Man, you’ve been crushing it! All sales are trending upward and there’s no reason to overreact.” What goes around comes around. You’ve confirmed your bias, and you’ve discounted his real time information that opposes that bias. The same could be true on the flip side. Sales have been stagnant or non-existent with a prospect, but your rep has a real opportunity at their fingertips to grow the account if we act now. “No, they don’t buy from us and they’ve dangled carrots in front of us like this before. Don’t get tunnel vision.”
Confirmation Bias is ultimately a decision making trap that preys on ego. We hate to be wrong and often times we look in mirrors to other biased sources or irrelevant information to confirm our positions. First step in moving past this one is recognizing that you don’t have all the answers, and that situations change constantly. Keep your eyes open and listen to trusted advisors. Those suits and ties are worth listening to, especially when they’re telling you you’re wrong.
The Sunk Cost decision making trap inclines us to perpetuate the mistakes of the past.
Illustration: Dating relationships. We’ve all seen it. A couple that is clearly terrible for one another. The relationship is toxic, and if it’s a friend, they might even be candid enough to tell you how hard it is being in the relationship. When you ask the obvious question: “Why are you guys still together?” The answer that you get will mostly likely be some version of the sunk cost decision making process.
At work, you’ve got an employee that is just not cutting it. You know it. He/She knows it. Your team members know it. Pulling the plug and cutting your losses is a hard thing to do at times, but one that is vital for you as you lead your team or go about your work.
I’ve found that most of the time, the Sunk Cost trap really has little to do with actual cost, at least in the monetary sense. Most of the time it’s emotional or mental investment on a project or idea that you’ve been pumping time and energy into.
Solutions? Typically hearing from your peers and those close to you is always a wise idea, and it could be here as well. But with Sunk Cost, it’s a completely fresh set of eyes that can quickly identify where your resources are being drained. Often times because the issue is an emotional or mental one, having someone from outside of the situation speak into it (in other words, someone with no dog in the hunt, no emotional or mental attachment), might be the key.
Once you cut ties with that anchor dragging you back, you’ll be smooth sailing in no time.
The basic explanation of this trap is that we are biased towards maintaining the current situation, even when better alternatives exist.
Illustration: We have a team production meeting every morning in our office. There was a time that everyone on our staff was considered a production worker or was directly related to the production process. As the team grew, the conference room was getting more and more crowded, and truthfully there were some team members attending that meeting that just didn’t need to be there for efficiency’s sake. In time, this was brought to our attention and we agreed and now we’ve streamlined how those meetings are run and who needs to be in attendance. We were just doing what we had always done. The status quo was that everyone needed to be in that morning meeting.
The trick with status quo, as a decision making trap, is that you might not even realize that you are making a decision.
Best way to avoid this is get regular feedback from your team. Invite them to speak into your processes and operations and I’ll bet there is a good chance that you’ll be encouraged and challenged by some of the things they bring to light.
As we’re looking through the 8 psychological decision making traps, we’re starting off with what we call anchoring. Anchoring is what we do when we give disproportionate weight to the first information we receive. It’s a human trait. It’s hard not to do.
Illustration: Say your spouse has only good things to say about a restaurant. The information you received first is that this place is going to be perfect for date night. So you sit down at the table, the service is excellent. The food is wonderful. And the price is great. Everything you experienced is in keeping with your anchored position.. you’re none the wiser. Flip the example.. your spouse told you this place was awful. You go there with some friends after work, and the service is excellent. The food is wonderful. And the price is great. Yet there’s a rub. In example 1, the dining experience was great. In example 2, the dining experience was ok.
We like to think that we can be completely objective about the experience, but truth be told, it’s nearly impossible to NOT anchor. Because you had been told and were pretty sure that this place was terrible, you gave disproportionate weight to the first information you received.
We do this in business all the time. With vendors, particular members in the community, facts about a certain controversial situation… oftentimes what you hear first, and the perspective you hear first, becomes your default position. I have learned that this is a vital thing to be aware of in our roles of management. As a leader, as a manager, your words and opinion can serve as a heavy anchor in one of your team member’s minds.
I oversee the majority of our company’s sales efforts: If I’ve had bad experiences with a certain client or a particular business in the past, I have to be wise about the information I share and don’t share with a new sales rep or CSR interacting with that client or business. If I start by saying, “Oh, let me tell you about that business…” or “this situation,” there is a good chance I’m going to be anchoring something in their minds. It’s the first information they’ve heard about the client, so they will give a disproportionate weight to that information. You might have heard the saying. “I don’t want to poison the well.” Well, it’s easy to do accidentally.
Here’s the catch. You might be thinking, “I need to anchor their opinion about this situation,” and you might. Prudence might require that you tell them that story so that they don’t repeat the same mistake.
To overcome this psychological decision-making trap, there is no quick fix to make sure you don’t fall prey to it. Awareness is the main antidote. Just know, “this is how we think.” Your words weigh in people’s minds and other people’s words weigh in your mind. Your experience might not be their experience and vice versa. Keep your eyes open, and be aware, and you’re one step closer to making sure you don’t fall into this psychological decision-making trap.