I just read a great report from Eric Olive on how and why we make decisions, especially bad ones. Here’s a summary of the report and the trouble we can get ourselves into:
- People don’t like uncertainty. It makes us uncomfortable. So we tend to ignore important information and either make a bad decision or don’t make any decision at all.
- People tend to make decisions that are in line with what they already believe. We filter information and just don’t let in data that conflicts with our view of the world.
- People are overly optimistic about the future. Even though we have experience with things going wrong, or taking longer than we think they will, we tend to look to the future with rose-colored glasses.
- People are influenced by confidence. If someone is confident then we believe them. And if/when we are confident that’s when we take action.
- We think we can fool people but we often end up fooling ourselves. Eric gives an interesting example of how an executive in a corporation thought he could make it look like he was consulting his staff about some important decisions in the company, when he was really trying to manipulate the decision to go his way.
