Business Leaders Make Sound Business Decisions

Thanks for joining me today.  My topic is EARLY DECISIONS AND BIAS.  We’ll discuss what happens when we get too ingrained in what we thought or believed.  The bottom line is this:  DON’T MAKE DECISIONS EARLY!  Make decisions and form opinions when they are necessary, but only after all relevant information has been gathered.

To illustrate my point, look at it this way--- we acquire information all the time related to various decisions.  It could be about a marketing decision, which direction to go, which school to attend, which course of study or major to pursue, or which path to take inside a company.  As we gather information and learn, we are pointed to a simple “yes” or “no” decision.  We may “count” the votes and have 34 for yes and 26 for no.  That sounds simple, right?  We may follow the votes because we KNOW which way to go and what we believe.  But, what happens over time?  Additional information comes in one piece at a time, and it may point in the OPPOSITE direction from what we’ve already decided and the opinion we’ve already formulated.  What now?  Most likely we will push THAT one piece of information aside which doesn't agree with the conclusion or decision already made. In six months or a year down the road, we may find if we were accurately keeping score that it may have been 47 for no and 38 for yes.  A different decision would have been made in the end, but we decided too early and pushed the subsequent piece meal information aside.

Think of friends you meet and people you know.  Have you ever met someone who CAN’T or WON’T change their mind, no matter what arguments or information you present?  What happens is that they have made decisions too early, and then have to become defensive about their decisions.

Aside from business and other things about success in life, look at this principle regarding politics:

No matter what happens, a certain group of people will ALWAYS vote for one party or the other—regardless.

Most people are on one side or the other, with a very small number in the “middle.”  Therefore, a small number of people actually influence the election.

Even though dramatic changes have occurred in BOTH parties over the last 30-40 years, some people made a decision long ago, became defensive about it, and refused to change—NO MATTER WHAT!

These people may or may not like the candidate from their own party, but they would NEVER vote for a person in the other party, simply based on a decision made long ago.

If you aren’t careful, you can develop the same bias in business and become inflexible in your decisions.  If your decision and opinion are “cast in stone” then you are less likely to consider any new information.  Have you ever encountered a boss who is stubborn?  Most of us probably have at some point.

 The solution to Not become that biased person is based on the following:

Don’t make decisions until you absolutely have to make them.

Don’t make and develop opinions until necessary for the direction you want to go.

I can give a person example from a situation that I encountered back in college.  I wasn’t sure whether to go to law school or graduate school.  I investigated and gathered information.  A quick decision would have been for law school, mainly because of the lawyers I saw on TV shows.  I knew I needed to attend the best school possible, so I decided to await the results of the LSAT and GRE tests, to see which was better.  I performed well on both tests, so I took a closer look at what lawyers actually did—and not just the nice stuff you see on TV.  I figured out I didn’t really like doing what lawyers did with most of their time, so this helped me make my decision.  I’ve had to employ this technique over and over in my career.

As an example from my life today, I’m often called upon to make recommendations to firms or give advice to people.  Rather than formulate an opinion ahead of time based on w...