While admitting that biases impact decision-making and becoming more knowledgeable about biases is a good first step, that will not ensure a good decision-making process. But what can we do to improve our decision-making? In this blog, I want to discuss five strategies that I’ve been pondering that might help you.
None of these suggestions have anything to do with AI. After all, an effective AI approach depends on humans first. We can experiment with AI solutions, but they are far from perfect. On the other hand, we don’t need to be potted plants, waiting for AI to solve our decision-making challenges.
My suggestions stem from some research into human behavior and its impact on how businesses can and should operate. Much of it has been done by academics, such as Daniel Kahneman, Amos Tversky, Dan Lovallo, Olivier Sibony, and Dan Ariely. But in this blog, I have moved from an academic approach to a more pragmatic business approach.
1. Accept the limitations on our ability to self-analyze our own decisions.
Experts have been researching this for years. Most well-informed businesspeople know about biases by now. We’ve been able to study how investors and buyers behave in different markets and how biases impact that. Other experts have studied how biases impact the decisions of medical professionals.
We’ve also studied the brain using imaging studies. We better understand how decisions are made and how cognition is impacted by strongly held views and emotions. Game theory has taught us that people are often irrational. Using brain studies, we have watched people make decisions using the older parts of the brain, rather than the much more sophisticated parts of the brain.
We simply cannot evaluate how our own biases, and strongly held emotions and opinions shape our decision-making.
The risk for business owners is significant. We risk betting entire investments that we’ve held onto for years in ways that could impact our families and communities. We risk making decisions that could negatively impact our employees and our customer base for years.
The good news is that we’re very good at evaluating bias in others. And probably better at recognizing emotionally driven decisions in others. So, moving to a collaborative decision-making approach can improve your outcomes.