Posted by Colin Weatherby 420 words
There have been a number of posts on decision making in a recent series. This post is a quick overview of further advice available from four Harvard Business Review articles in the September 2015 edition; ‘From ‘Economic Man” to behavioural Economics’ by Justin Fox; ‘Leaders as Decision Architects’ by John Beshears and Francesca Gino; ‘Fooled by Experience’ by Emre Soyer and Robin M. Hogarth; and ‘Outsmart Your Own Biases’ by Jack B. Soll, Katherine L. Milkman, and John W. Payne.
Read them if the ideas are relevant and potentially useful to you. I have simply cut the main tables from them and provided a brief overview of the context.
The first table is from the article ‘From ‘Economic Man” to behavioural Economics’ by Justin Fox. This article discusses the three main streams of thinking about human decision making; decision analysis; heuristics and biases; and ‘going with your gut’. He discusses the emergence of each stream and their relationships with each other. The table provides a comparison of the pro’s and con’s of each.
The second table is from ‘Leaders as Decision Architects’ by John Beshears and Francesca Gino. This article how the environment in which people make decisions can be ‘designed’ using the principles of behavioural economics to encourage good decision making. Their approach (described in detail) includes five steps:
- Understand the system errors in decision making that can occur.
- Determine whether behavioural issues are at the heart of the poor decisions in question.
- Pinpoint the specific underlying causes.
- Redesign the decision-making context to mitigate the negative impacts of biases and inadequate motivation.
- Rigorously test the solution.
The table describes some of the common biases that affect business decisions.
The third table comes from ‘Fooled by Experience’ by Emre Soyer and Robin M. Hogarth. They discuss the reliance placed on experience to make decisions and how, sometimes, experience fools us instead of helping us. They believe that we view the past through filters that distort our perception, and that we can use our knowledge of these filters to understand what our experience has to teach us.
The table lists biases arising from the main types of filters, their consequences and some remedies.
The last table comes from ‘Outsmart Your Own Biases’ by Jack B. Soll, Katherine L. Milkman, and John W. Payne. In a similar vein to the previous article, the authors discuss cognitive biases that influence our thinking, this time with reference to Daniel Kahneman’s System 1 and System 2 thinking.
The table provides advice on ways to manage our biases.
Beshears, John and Gino, Francesca 2015. ‘Leaders as Decision Architects’, Harvard Business Review, May.
Fox, Justin 2015. ‘From ‘Economic Man” to behavioural Economics’, Harvard Business Review, May.
Soll, Jack B., Milkman, Katherine L., and Payne, John W. 2015. ‘Outsmart Your Own Biases’, Harvard Business Review, May.
Soyer, Emre and Hogarth, Robin M. 2015. ‘Fooled by Experience’, Harvard Business Review, May.