I’m currently studying quantitative and qualitative decision making, and discussing Campbell, Whitehead and Finklestein’s Why Good Leaders Make Bad Decisions and the red flag factors that influence poor decisions. In order to frame the discussion, I’ll point to An Introduction to Management Science: Quantitative Approaches to Decision Making, in which authors Anderson, Sweeney, Williams, Camm and Kipp Martin define decision making as the steps involved with the problem-solving process. The first step in the process is to identify and define the problem. The process then culminates with the choosing of an alternative, which is the act of making the decision (Anderson, Sweeney, Williams, Camm & Kipp Martin, 2011). In quantitative terms, it appears to be a straight-forward procedure. However, Campbell, Whitehead and Finklestein concede that the decision making process is often-times defective; that, “important decisions made by intelligent, responsible people with the best information and intentions are sometimes hopelessly flawed” (Campbell, Whitehead & Finklestein, 2009 pg. 60). The authors point to three factors in the decision-making process that are “red flags” for failure. These issues either alter leaders’ emotional tags or encourage them to see a false pattern. They include:
- The presence of inappropriate self-interest: the emotional bias one attaches to information, forcing us to see what we want to see.
- The presence of distorting attachments: the bonds we develop with people, places, and things and the way these bonds affect the judgments we form about the situation we face.
- The presence of misleading memories: referring to anamnesis which appears relevant at the time, but eventually lead to the wrong conclusions. (Campbell, Whitehead & Finklestein, 2009)
Of these biases, the Authors consider the presence of distorting, emotional attachments as one of the most powerful. “Personal attachments surround us and can have a major role in any decision,” they write, “sometimes to our extreme detriment “(Finklestein, Whitehead & Campbell, 2009 pg.84). The nature of these attachments can be complex: from intimate to detached, sinister to unthreatening, subtle to ingenuous. They include family and friends, communities and institutions, and objects. We can even become attached to emotional states and conditions, as Hammond, Keeney and Raiffa elucidate when referring to a similar bias in which decision makers exhibit a strong partiality toward alternatives that perpetuate the status quo. “Breaking from the status quo means taking action,” the Authors explain, “and when we take action, we take responsibility, thus opening ourselves to criticism and to regret” (Hammond, Keeney & Raiffa, 2006 p.121). I can think of numerous examples in which I have fallen victim to these somewhat irrational biases and the consequences associated with them. One example that comes to mind is my decision to retain a cleaning company to clean a certain number of our company’s facilities. I had employed the outfit personally in my home, was pleased with their efforts, and was aware that they were looking to branch out into office cleaning. Due to my personal relationship with the company, we endured their growing pains and learning curve for approximately a year before I made the difficult decision to employ a different vendor. So, not only did I make the wrong decision based on an emotional attachment, I chose not to act to deal with the problem in a timely manner. As Hammond, Keeney and Raiffa explain, in a situation in which “sins of commission (doing something) tend to be punished much more severely than sins of omission (doing nothing), the status quo holds a particularly strong attraction” (Hammond, Keeney & Raiffa, 2006 p.122). As a result, it was necessary to handle vendor contracts differently from that point on: I outline expectations as thoroughly as possible at the beginning of the contract, have frequent review periods, and build as many out-clauses into the contract as possible. Campbell and Whitehead’s analysis holds true in this case: “Flawed decisions will only result when the decision process that supports and challenges the key decision maker(s) also fails” (Whitehead & Campbell, 2010 p.8). Its been my experience that service companies that differentiate themselves through expertise in their field often carry this attitude toward the vendors they employ: “they’re the experts; they should know how to do the job”. It’s the same kind of faith organizations hope clients will put in them. I wonder if others that work in service-related fields have experienced similar bias in judgement?
Anderson, D. R., Sweeney, D. J., Williams, T. A., Camm, J. D., & Kipp Martin, R. (2011). An introduction to management science: quantitative approaches to decision making. (13th ed.). New York, NY:
Campbell, A., Whitehead, J., & Finklestein, S. (2009). Why good leaders make bad decisions. Harvard business review, 87(2), 60-6.
Finklestein, S., Whitehead, J., & Campbell, A. (2009). How inappropriate attachments can drive good leaders to make bad decisions. Organizational Dynamics, 38(2), 83–92.
Hammond, J. S., Keeney, R. L. & Raiffa, H. (2006, January). The hidden traps in decision making. harvard business review, Retrieved from http://hbr.org/2006/01/the-hidden-traps-in-decision-making/ar/1