#477  from Innovative Leader Volume 9, Number 7          July 2000

Mistakes to Avoid in Decision Making
by Donald L. Caruth, Ph.D., SPHR and Gail D. Handlogten, SPHR

Dr. Caruth and Ms. Handlogten are principals, Human Resources Management Systems, in Rockwall, Texas (email: caruth@flash.net).  They have published Staffing the Contemporary Organization (Quorum Books, Westport, CT, 1997).

According to management expert Peter Drucker, managers do not generally spend a great deal of time making decisions.  Decision making is, however, the task that has the most far-reaching consequences. It’s imperative that managers recognize decision-making mistakes.  Eight of the most common errors follow.

Mistake #1:  Failure to Recognize a Problem

Managers usually operate on a frantic day-to-day basis without recognizing a problem that’s before their noses.  They seem resigned that things are the way they are because of the “system,” and someone else must take action. When schedules present obstacles, or operations aren’t running according to plan, a manager should suspect that a problem exists.  They should act to solve the problem.  Frequently, managers don’t recognize the problem as their responsibility due to lack of experience, or that they recognize the problem carries with it the obligation to do something.  Therefore, no recognition equates to no responsibility.

Mistake #2: Incorrect Problem Identification

Identifying the problem is the next step in effective decision making.  This step is also the most difficult because the more obvious consequences from a problem are often mistaken for the actual problem. Managers usually pay most attention to obvious irritations.  With their time pressures, they are less likely to dwell on what’s behind a problem. Other factors that keep from identifying the main problem include inaccurate perceptions and lack of experience.  A decision that fails to deal with the real problem is, in effect, a bad decision because it will most likely produce an unsatisfactory solution.  It will also result in further decisions having to be made to solve the problem.

Mistake #3:  Insufficient Consideration of Alternatives

For any problem, there are usually a number of alternative solutions.  Failure to think through the alternatives exposes a manager to the risk of overlooking the best decision.  Therefore, it’s essential that a manager should generate ideas--think outside the box--and also consider possible repercussions from each alternative.  Investigate beyond the obvious.  Reasons for not thinking through alternatives range from the pressures of time to misperceptions.  Decisions, when alternatives aren’t carefully considered, won’t be as effective as they should be and, more than likely, will result in someone else having to make another decision at a later time.

Mistake #4:  Inadequate Evaluation of Risk

Every decision should be evaluated in terms of costs and benefits, or in terms of the risks involved and the results to be obtained.  Failure to do so often produces high cost, complex solutions where the payoff is minimal.  Managers can avoid some risk by seeking lower-risk solutions, reducing risk by training employees, or insuring against risk through insurance or hedging.  If the decision maker evaluates risk systematically, there’s a good chance that the decision will be a good one.

Mistake #5:  Repetitive Decisions

Many managers handle the same problem over and over, making decisions in each instance on a case-by-case basis.  Recurring problems can be more efficiently and effectively resolved through the development of policies, procedures, rules, regulations and the like.  If a manager lacks authority to initiate plans of this nature, he or she should refer the recurrent problem to those who can develop such plans.  Situations which cause recurring problems will not, in most cases, go away.  Thus, continuing to treat the problem on a case-by-case basis is ineffective and inefficient management.

Mistake #6:  Unnecessary Decisions

“Fools rush in where angels fear to tread” is an old saying that offers sound advice.  Occasionally, the problem confronting a manager is of such a nature that the best action is to do nothing, to simply watch and wait.  While few problems are likely to improve on their own, there’s always the possibility that they will not further deteriorate.  To take action may only subject a manager to unnecessary risk--risk that could be avoided through “action in inaction.”  When the no-action approach is used, a manager must continue to observe the situation and take action if it is merited.

Mistake #7:  Delayed Decisions

There’s no evidence to support the contention that decisions improve with age, that the longer a decision is put off, the higher the quality of the eventual decision.  On the other hand, fast--but not snap--decisions have at least two advantages.  First, an expeditious decision gives a manager more time to correct a situation should the original decision prove to be wrong.  Second, a quick decision allows a manager to move on to other problem areas.

Mistake #8:  Lack of Follow-up

Each implementation should be followed through to see if it is producing the expected result.  Not every decision is going to be as effective as first believed.  Consequently, a manager must always monitor the situation to determine if things are working according to plan.  Many times, decision makers are so relieved to have made a decision, that they wish to forget it, and go on to other things; hence, they neglect effective follow through.

When a manager makes a “good” decision, it often seems that few people notice; on the other hand, a “bad” decision may be remembered years later.  Lunch-time tales frequently include someone’s poor decision.  And such tales may continue, even years after the individual has left.  Few managers, and their organizations, can tolerate such fame.  Therefore, it’s essential that you maximize your good, and minimize your poor, decisions.