Studies tell us our process for making important decisions could be improved, and sometimes in some significant ways. Many wrong choices could become better choices if we did a more disciplined job of handicapping true facts, and we learned to value largely irrelevant facts to tasks not at all.
A healthy exchange in which an opposite view is fully and artfully presented to the presumptive choice will enhance your decision-making skills despite what your ego and gut-feeling instincts may tell you. Confirmation bias runs rampant in lots of ways, but it often travels in your driver’s blind spot on the journey to better reasoned decisions.
Consider this: Based on a recent exhaustive study of buyouts of publicly traded companies, it was independently determined that the acquiring company paid a 41% premium. Distilled, this means that the acquiring company paid $141 for a company that is otherwise valued at $100 a share because the acquiring CEO thinks he can run the acquired company 41% more efficiently. Except the stubborn projected efficiency rarely happens, which seems like a pretty powerful disconnect, don’t you think?
So what is the solution when our nemeses, ego and hubris, take hold? The first choice among lots of near equals, thoughtful business writers observe, is to establish a decision-making process that encourages contrary views, and to interpret criticism as a noble and necessary function.
Understanding this common sense dynamic, the Roman Catholic Church for centuries made use of a “devil’s advocate” in canonization (who will be named a saint) decisions. The devil’s advocate had a noble name himself–promoter of the faith–promotor fidei. His job was to build a case against sainthood.
Pope John Paul II eliminated the position in 1983, ending 400 years of tradition. Since that time, revealingly, saints have been canonized at a rate of nearly 20 times faster than in the early part of the 20th Century.
Years ago an organization of which I was a part needed to fill a routine skilled position to help with a certain aspect of our body of work. The skills needed were pretty clear. A popular staff member had a friend she recommended. The friend had some past but long out-of-date experience that fit, but she had an uncalibrated advantage, too: she made a very nice appearance. She now had a management position, and a higher salary that came with it.
In a short amount of time the key job skills needed were minimized, and the process of figuring out how to fit the proverbial square peg in the round hole began. The original objective was quickly discarded, largely, and our organization was about to spend a much higher amount of money for a job skill—management—which we already had in place.
When another member of the management team not involved in the interview probed the significant weaknesses in the initial analysis, it became clear that the entire process had turned down a dead-end road because the heads of the interviewers were turned by largely irrelevant factors to tasks.
Here is a construct offered by some popular business writers about how to analyze the strength of an idea while avoiding sometimes sensitive egos: What would have to be true for a proposed plan to be the best plan? When the analysis becomes more collaborative in nature—finding the objective facts—rather than the sometimes-risky prospect of challenging the boss or other persons in the group, or pesky subjective feelings, you reach a better result. It gives everyone a chance to back away from their beliefs without feeling their personal idea has failed to carry the day.
What I’ve learned about life on the way to the courthouse is this: confirmation bias often leads us to structurally wobbly decisions. A thoughtfully designed construct that allows for an objective stress test of key assumptions is critical to crafting good decisions. If we do not have a more friendly way to analyze problems, and a healthy respect for the real value of the noble art of the artfully drawn other point of view, we are headed for some decisions which could be much stronger, and some which may be in fact poor and even costly decisions. A process that focuses on distilling collaboratively determined critical facts in which there are no perceived winners and losers in the process is in fact the winning way for all the parties.