How to Make Wiser Decisions Using the Science of Behavior ......decisions make good stories.” If...

How to Make Wiser Decisions Using the Scienceof Behavior Analysis

By Dr. Edmund Fantino and Dr. Darnell Lattal

ntroductory Note from Edmund Fantino: Current research inthe laboratory at the University of San Diego, California,conducted with Dr. Stephanie Stolarz-Fantino, centers on

human decision-making, especially non-optimal, illogical andimpulsive decisions. We also study choices involving the dis-tribution of resources including an experimental analog ofaltruism as well as human problem-solving and reasoning. Wefind that all of these decisions may be best understood by athorough appreciation of the historical context to which thedecision-maker has been exposed.

Sometimes I wonderwhether the world is beingrun by smart people who are putting us on, orby imbeciles who reallymean it.

– Mark Twain

Aubrey Daniels International

I

When companies take a nosedive, oftendue to a series of executive decisions thatin retrospect seem obviously detrimental,conversations around the office ofteninclude the question, “What were theythinking?” Monday morning quarterback-ing isn’t limited to the sports arena, andin the past few years, upheaval in the cor-porate ranks of major industries has sup-plied plenty of fodder for second-guessing.

Not all decisions at the executive levelare flawed, of course, and not all bad deci-sions are made by executives, but evensome of the best decisions seem to havebeen made by happenstance, luck, or whatsome people call “instinct.” Many peoplebelieve that the ability to make good deci-sions in a leadership role is not shaped somuch by the environment but hardwiredinto the brains of those who end up lead-ing our corporations. In a somewhatshortsighted approach many authors whowrite about leadership and decision mak-ing assume that a history of making gooddecisions (even a very brief history) andthe events that occur as a result of such“good decisions” actually predict that gooddecisions will continue in the future.Therefore, once someone in a leadershiprole has made several successful decisions,then that person is imbued with the labelof good decision maker. In reality,research tells us that decisions should notbe judged as worthy until they are put tothe test of how they affect the decisionmaker’s future actions.

Shifts in social and economic fortune,the winds of war, or a change in our cul-ture are all results of decision making atsome level. Still, as one pundit said, “Baddecisions make good stories.” If we simplywatch the evening news we might observethat people have a tendency to make poor

decisions. Current research verifies thatobservation but also provides practicalimplications about poor decisions andtheir causes. In fact, behavioral scientistshave discovered that poor decision makingis often the result of the misapplication ofrules and principles that have led to effec-tive decisions in the past. For example, wemay think that always buying the large,“economy size” of a product is the bestbuy, or that a package option for a concertseries is a better buy than purchasing tick-ets separately for each event, when actual-ly neither is always the case. In otherwords, the principles that we haveacquired from a lifetime of experienceenable us to make rapid and efficient deci-sions, but when those experiences don’tactually apply, they lead us astray.

PROOF IN THE PUDDING

Decisions are also determined by a phe-nomenon that Hal R. Arkes and CatherineBlumer call the “sunk cost effect,” mean-ing that people are often more influenced

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DES I GN ING A COMPENSAT ION PROGRAM THAT MOT I VATES AND PRODUCES A PROF I T - DR I V EN WORKPL ACE

by what they have already invested thanby factors that should determine theappropriate action. This tendency can beattributed to ongoing lessons of “Waste

not; want not.” Interest-ingly, even economics stu-dents who are well-versedin the sunk-cost effectconcept fall into the sametrap. When confrontedwith a situation in whichthey have invested morein one choice than inanother, they opt for theirless-preferred choice ifthey have made more ofan investment (usuallyfinancial) in that choice.The takeaway lesson hereis that training does notnecessarily immunize one

from making irrational, illogical, or other-wise optimal decisions.

Under what conditions do people seekinformation? Surprisingly, humans are notthe enthusiastic information seekers thatmany of us might think. How well do weapply information after we have acquiredit? This question leads to the fas-cinating world of illogical falla-cies developed by specialists injudgment and decision making.A behavioral approach helps tounderstand these fallacies andhuman choice, enabling us togain a fuller understanding ofdecision making and the condi-tions that surround and predictthe likelihood or success or fail-ure. The science tells us a lotabout where good decisionscome from, whether we are goodor bad at decision making, and if

good decision making is a skill that can betaught and honed.

NO NEWS IS GOOD NEWS!

In a series of experiments involving anumber of species—including humans—behavioral scientists observed that manyspecies will seek information despite thefact that doing so produces no immediatechange for the subject, in terms of imme-diate reinforcement. This, of course, leadsto the basic question of “Why does thisoccur?” Several theories were formed toanswer that question, roughly stated asfollows:

• Information serves as its own reward,because the information may proveprofitable for future use.

• Seeking out information is sometimesassociated with positive outcomes anda higher likelihood for faster reward. Itis this occasional good news that sup-ports information seeking.

In 1972, Robert Bloomfield capturedthe critical difference between the two the-ories when he noted that, according to the


DES I GN ING A COMPENSAT ION PROGRAM THAT MOT I VATES AND PRODUCES A PROF I T - DR I V EN WORKPL ACE

People prefer “nonews” to bad newswhen the latter can-not be utilized. It isunlikely that manyof us would want to

know somethingdreadful was about

to happen if wecould do nothing to

forestall it.

first view, a subject would pay attention toboth “good news” and “bad news” (sinceboth are informative), while according tothe second view, only “good news” associ-ated with a positive outcome would main-tain a subject’s attention. As it turns out,the preponderance of the evidence sug-gests that people attend to bad news onlywhen the bad news has some usefulness, afinding that supports the second view.However, people prefer “no news” to badnews when the latter cannot be utilized. Inother words, it is unlikely that many of uswould want to know something dreadfulwas about to happen if we could do noth-ing to forestall it.

The “take-home message” here is thatwe cannot assume that individuals willabsorb, or even pay attention to informa-tion that might prove valuable in presentor future decision making. Instead, weappear to treat bad news as something tobe avoided. Apparently, compared to “badnews,” “no news is good news”—a phenom-enon that also may clarify the historicalsuccess of “Yes Men!”

USING INFORMATION LOGICALLY...OR NOT!

If humans appear to be more interested inthe favorable affect of “news” than in itsinformative value, how do they behavewhen confronted with conflicting informa-tion? Several types of “fallacy problems”

that negatively impactoptimal decision mak-ing have been identi-fied: (1) our responseto compound state-ments called the con-junction fallacy; (2) aconcept called base-

rate neglect; (3) a problem-solving tenden-cy called probability matching or learning;and (4) the previously discussed sunk-costeffect.

Repeated studies by behavioral scien-tists Amos Tversky and Daniel Kahnemanrevealed that when people were suppliedwith a compound statement, they madedecisions based more on personal intu-ition than on fact. For example, in certaincontexts subjects judged the separatestatements “Bill is an accountant” and“Bill plays jazz for a hobby” as less likelyto be true than the compound statement“Bill is an accountant and plays jazz for ahobby.” Many such examples demonstratethat people make intuitive decisions basedon the very form in which facts are pre-sented.

Scores of subsequent and similar stud-ies in which clear instructions were givento make judgments in terms of probabilityand not simply in terms of intuitiveappeal, actually resulted in a larger pro-portion of subjects exhibiting this tenden-cy, called the conjunction fallacy. Even


HOW TO MAKE W I SER DEC I S I ONS US ING THE SC I ENCE O F BEHAV IOR ANALYS I S

He who asks is a foolfor five minutes, but he

who does not askremains a fool forever.

–Chinese Proverb

high-achieving students with explicit train-ing in logic demonstrated the fallacy!

Why does the conjunction fallacy occur?One possibility considered was that thesubjects studied were not sufficiently moti-vated to take the experiments seriously.Consequently, researchers provided feed-back regarding the logical correctness ofsubjects’ responses, and offered a hand-some monetary reward just for answeringcorrectly. Neither the feedback nor imme-diate monetary reward improved perform-ance, a finding that might appear ironic inview of some of the exorbitant salaries andbonuses offered to corporate executives.

A second possibility for making deci-sions that reflect the conjunction fallacy isthat subjects may respond to compoundstatements by assessing the reasonable-ness of each part of the sentence, averag-ing the assessments, and coming up withthe likelihood of the compound. Researchshows that this averaging is a commonlyused tool for integrating multiple pieces ofinformation in decision making.

Overall, research on the conjunction fal-lacy suggests that it is a robust phenome-non, as mentioned previously even occur-ring in highly educated subjects, includingthose with training in logic. It is likelythat the fallacy depends, at least in part,on a tendency to average the likelihood ofpossible outcomes we need to incorporateour decisions. This tendency to averageoften serves us well in integrating infor-mation when we are making judgments.However, this averaging of compoundinformation is inappropriate for someproblems and therefore can persuade us tomisapply learned rules that lead to badand incorrect decisions.

No doubt, the research of Tversky and

Kahneman is highly complex, but theyneatly summarize the problem that it pres-ents as follows:

Uncertainty is an unavoidable aspectof the human condition. Many signif-icant choices must be based on be-liefs about the likelihood of suchuncertain events as the guilt of a de-fendant, the result of an election, thefuture value of the dollar, the out-come of a medical operation, or theresponse of a friend. Because wenormally do not have adequate for-mal models for computing the prob-abilities of such events, intuitivejudgment is often the only practicalmethod for assessing uncertainty . .. Because individuals who hold dif-ferent knowledge or hold differentbeliefs must be allowed to assign dif-ferent probabilities to the sameevent, no single value can be correctfor all people. Furthermore, a cor-rect probability cannot always be de-termined even for a single person . .. We do not share Dennis Lindley’soptimistic opinion that “inside everyincoherent person there is a coher-ent one trying to get out,” and wesuspect that incoherence is morethan skin deep.

Gary N. Curtis, Ph.D., on his Web site,www.fallacyfiles.org, explains the conjunc-tion fallacy as follows:

The probability of a conjunction isnever greater than the probability ofits conjuncts. In other words, theprobability of two things being truecan never be greater than the prob-ability of one of them being true,since in order for both to be true,each must be true. However, when



people are asked to compare theprobabilities of a conjunction andone of its conjuncts, they sometimesjudge that the conjunction is morelikely than one of its conjuncts. Thisseems to happen when the conjunc-tion suggests a scenario that is moreeasily imagined than the conjunctalone.

Interestingly, psychologists Kahnemanand Tversky discovered in their experi-

ments that statisticalsophistication made lit-tle difference in therates at which peoplecommitted the conjunc-tion fallacy. This sug-gests that it is notenough to teach proba-bility theory alone, butthat people need tolearn directly about theconjunction fallacy in

order to counteract the strong psychologi-cal effect of imaginability.

In other words, simply being aware ofthe human tendency to commit conjunc-tion fallacy may help us consider its impli-cations before rushing into snap decisions.As Charlie Chan said at the racetrack,“Hasty conclusion like toy balloon: easyblow up, easy pop.”

Base-Rate Neglect and ProbabilityMatching: Pay No Attention to that ManBehind the Curtain!

A series of complex studies on judg-ment and decision making point to anoth-er, apparently very human phenomenonwhich scientists call base-rate neglect. Thedetails of such experiments are highlyintricate, but the outcome basically statesthat when assessing the probability of a

future event, people often ignore back-ground information in favor of case-specif-ic information. Comparison studies usingpigeons and humans indicate that thispropensity to apply rules, often learnedsince childhood, could be a completelyhuman tendency. In other words, becauseof our learning histories, we apply thosehistories to problem solving even whensome facts indicate otherwise.

For example, from early childhood onwe learn to match like shapes and colorsat home, in school, and at play (in picturebooks and in playing with blocks and puz-zles), to the extent that we may displayinsensitivity to changes in the reward con-tingencies of our present environment. Anold adage teaches “You can’t fit a squarepeg into a round hole” and many of usmay have learned that lesson too well, alesson that undermines novel behavior (ornovel decision making) even when warrant-ed. It appears, then, that humans havelearned to attend to case-specific cues suchas witness testimony and diagnostic tests,because they are more compelling thanless prominent evidence. Thus we may neg-lect less conspicuous evidence and go withthe “tried and true” or so we think.



You have to havedoubts. I have col-laborators I workwith. I listen andthen I decide.

That's how it works.

– Giorgio Armani

As with the conjunction fallacy,research on the base-rate neglect phenom-enon points to our histories as the culpritsin our sometimes poor decision making.We acquire rules and strategies for copingeffectively with our environments. But wethen apply these strategies somewhatrigidly to novel situations where they maybe inappropriate. Perhaps this tendency isexacerbated by our willingness to overlookcritical pieces of information, becausemaking a from-the-gut-decision is so mucheasier, and may pay off more times thannot. Unfortunately, such ill-formed deci-sions may also come with substantial cost.

HUMANS AS PROBLEM SOLVERS

When humans are presented with identi-cal choices, each associated with constantpayoff likelihood, they tend to match theirchoices to the arranged probabilitiesinstead of maximizing their payoffs byalways choosing the outcome with thehigher likelihood of reward. This meansthat even when people know that one out-come pays off 75 percent of the time (andthe other outcome, therefore, pays off 25percent of the time) they tend to choosethe superior outcome 75 to 80 percent ofthe time rather than every time.Researchers call this rather odd practiceprobability matching and speculate that itoccurs because human beings judge suchtasks as problems to be solved, maybeeven odds to be beaten. This gives insighton why probability matching occurs andhow it might even be eliminated.

It appears that humans, not contentwith being correct most of the time, asthey would be by choosing the more likelypayoff, have learned that there generallyis a “solution” that will always lead to a

payoff. Non-humans don’t have theseexpectations and perhaps that is why theychoose optimally: pigeons and rats alwaysselect the more likely payoff.

My colleague, Ali Esfandiari, and Ihypothesized that people in probability-matching tasks will typically seek a way tobe correct 100 percent of the time, so weinformed subjects that the best they coulddo on a series of trials was to be correct75 percent of the time. The experimentwas partially successful in reducing thelikelihood that the subjects would stillchoose the less than optimal choice inhopes of reaching 100 percent accuracy.This indicates that more optimal choicescan be eventually attained over a numberof trials without actually telling peoplethat they should choose the more likelyoutcome on every trial. However, in reallife, how many bad decisions does thatentail? The answer is quite a few! (But of



course, since everyone has been a parentand/or a child at one time, we know thateven telling people the choices they shouldmake often doesn’t make a differenceeither.)

Another treatment that enhanced deci-sion-making performance in probabilitymatching involved asking participants toadvise others on how to approach thetask. This had the effect of encouragingthe participants to reflect on the contin-gencies and once they articulated a moreeffective strategy for others to follow, theywere more likely to use the same strategythemselves.

The Web page www.wisegeek.com refer-ring to base-rate neglect and how humansmake the mistake of deviating from prob-ability theory, explains the problem as fol-lows:

These deviations occur because hu-mans are often forced to make quickjudgments based on scant informa-tion, and because the judgmentswhich are most adaptive or rapid arenot always the most correct. It ap-pears that our species was notcrafted by evolution to consistentlyproduce mathematically accurate in-ferences based on a set of observeddata.

For example, in one experiment, agroup was asked to assign probable gradepoint averages (GPAs) to a list of 10 stu-dents based on descriptions of each stu-dent’s habits and personalities. Poorhabit/personality descriptions coincidedwith predicted poor grade scores and vice-versa. Even though the group was alsogiven information on students’ academicperformance based on probability theory,that information did not appear to affect

the GPA judgments. Instead, the groupestimated GPAs according to their judg-ment of habits and personalities.Researchers concluded that “these skewedprobability estimates occur every day inbillions of human minds, with substantialimplications for the way our society isoperated.”

This discussion of decision makingbegan with the sunk-cost effect (alsoknown as persistenceof commitment and asthe investment trap).The sunk-cost effect isthe tendency to persistin achieving a goal dueto already committedexpenditure, evenwhen the prognosis ispoor. Other examplesof persistence of commitment can beunderstood in terms of the misapplicationof a rule such as “If at first you don’t suc-ceed, try, try again.” Consider anotherexample of the sunk-cost effect, developedby Arkes and Blumer:

As an airline company president, youhave invested $10 million of the com-pany’s money in a research projectwith the purpose of building a planethat cannot be detected by conven-tional radar—a radar-blank plane.When the project is 90 percent com-plete, however, another firm beginsmarketing a plane that cannot be de-tected by radar. Also, it is apparentthat their plane is much faster andfar more economical than the planeyour company is building. The ques-tion is, “Should you invest the last10 percent of the research funds tofinish your radar-blank plane?”



Insanity is doing thesame things againand again expectingdifferent results.

– Albert Einstein

Experimenters found that 85 percent ofparticipants in this hypothetical studyopted for completing the project eventhough the completed aircraft would beinferior to one already on the market.Among a corresponding group of researchparticipants given the same problem butwithout mention of the prior investment(that is without mentioning the “sunkcost”) only 17 percent opted to completethe project. The explicit sunk cost of tenmillion dollars made all the difference!

While this result is consistent with thehypothesis that the participants are tryingto avoid “waste,” it is also consistent withan alternative hypothesis, known as “self-justification.” According to this view, wepersist in a failing action because we arejustifying our previous decision (for exam-ple to spend $10 million on developing theaircraft). To decide not to complete theproject might be construed as an admis-sion that we should not have embarked onthe project in the first place. Someresearch shows that the sunk-cost effect isjust as persistent in groups as it is in indi-viduals, leading to speculation about itscontribution to the downfall of pasthuman societies.

In fact, studies suggest that there aremany cases where self-justification pro-vides a more compelling account thanwaste avoidance. Anton D. Navarro’sresearch shows that sunk-cost effects areminimized when the nature of futuregains and losses are made more transpar-ent to the decision maker. However, in theworld of business, who will step up tomake such facts transparent? Keep inmind the previous findings that to mostpeople “no news is good news.” A wiseemployee might also remember a well-known phrase about killing the messenger.

KILLING THE MESSENGER

If self-justification is implicated in partic-ular cases of the sunk-cost effect then wemight expect that the effect would be exac-erbated if the situation emphasizes thepersonal responsibility of the decision-maker. Two studies support this view.First, a series of studies by Sonia Goltzand her colleagues has demonstrated per-sistence-of-commitment in a task involvinginvestment decisions. In one experimentGoltz compared the degree of maladaptivepersistence in participants who believedthat they alone were responsible for mak-ing the company’s investment decisionswith the degree of maladaptive persist-ence in participants who believed thattheir advice was pooled with that of otheradvisors in arriving at the final decision.Those who felt individually responsiblepersisted significantly longer. A secondstudy, one of several conducted by Navar-ro, illuminated the factors governing sunk-cost behavior. Navarro found that whenparticipants had chosen to engender thecosts, they persisted significantly morethan did participants for whom the costshad been imposed. Thus if you increasepersonal responsibility, you increase sus-ceptibility to the sunk-cost effect.



“Before you go any further, let me reiterate that I, for one, see nothing wrong with

killing the messenger.”

The ubiquity of sunk cost effects in ourworld was perhaps best captured in thebook Acceptable Risk in which the authorsnote: “The fact that no major dam in theUnited States has been left unfinishedonce begun shows how far a little concretecan go in defining a problem.”

ESCALATION OF COMMITMENT GONE WILDExpo 86 – A World’s Fair held in Van-couver, British Columbia, Canada. Theprovincial government continued to decidein favor of holding the event despite rap-idly accelerating budget deficits. In 1978the deficit was slated at $6 million, by1985 this deficit had ballooned to over$300 million.

Taurus IT Project – An attempt by Lon-don’s Stock Exchange to implement anelectronic share settlement process. Theproject started in 1986 and was expectedto take three years and 6 million poundsto complete. The project was finallyscrapped in 1993 at a loss of nearly 500million pounds.

This effect occurs in a variety of tasksand such studies provide evidence thatpast reward history may influence deci-sion-makers' persistence under failure con-ditions. Goltz, for example, tested persist-ence in a simulated investment task inwhich she manipulated subjects' past expe-rience of the success or failure of theirinvestments. Subjects received returns ontheir investments (success) in one of twoinvestment alternatives per one of the fol-lowing schedules: (1) on every trial; (2) onevery other trial; or (3) unpredictably, butaveraging out to be on one of every twotrials. When conditions were later alteredsuch that the investment alternative con-tinuously failed to pay off, those subjectswho were exposed to the least predictableschedule persisted in investing significant-ly longer than those in the two other con-ditions. Goltz also found increases in per-sistence if subjects' past histories includedhigher rates and greater magnitudes ofreward. All of these results are consistentwith a behavioral view of the importanceof reward history for understanding per-sistence of commitment.

It is important tonote, however, that thesunk-cost effect isn’talways about money. Thecost may also be per-ceived as investment intime and personal effortas in sticking with acareer that you hatebecause you put forth somuch effort in your stud-ies at college or you can’tlet a bad relationship gobecause you’ve investedyears of your life tryingto make it work.



1986 World’s Fair - Source: Colin Rose - originally posted to Flickr as Expo 86

To know that moving on is an option,to consider actively your patterns of per-sistence in doing something because ofthe already expended effort, to start overin the moment—all those things are goodadvice. To act differently requires a differ-ent set of sustainable reinforcers—a differ-ent habit to build. As behavior analysts,the issue is that you, the person trappedby time and effort or the almost done feel-ing—may have tremendous difficulty mov-ing on, but there are behavioral strategiesthat can help you do so. Moving on doesnot happen just by saying “Do it!”—arrange to get help to do so. Do not relyon your ability to step aside after monthsor even years of persistence. Rememberthere are ways to return to an activitywith a clearer head once you have found away to break away. We find that advicethat tells you to stop clinging disregardsthe tremendous power of positive rein-forcement you receive from continuing tocling. Alternative sources of reinforcementare often needed in order to make thebreak, and sometimes punishment for con-tinuing is required for what is often calledaddictive behavior.

MAKING GOOD DECISIONS

Raising the ire of most Americans, autoexecs hopped on their expensive privatejets to beg for taxpayer money before theSenate. This is the way they always didbusiness in the past—big show, big impres-sion—this time the wrong impression!Northern Trust Bank, among many simi-lar examples, (after being bailed out bythe billions), threw a series of extravagantparties, events, and concerts in Los Ange-les for clients and high-ranking employees.Despite the fact that the bank had previ-ously laid off 450 employees, a spokesman

for the company stated that the money forlavish parties and giveaways was alreadyin the company’s operating expenses priorto the bailout and defended the spendingas a successful PR strategy in the past—business as usual.

Though such examples are shockingand we would like to think of them as rareexamples of extraordinarily poor deci-sions, research findings don’t paint a rosypicture in terms of human decision mak-ing. However, thoughresearch helps us under-stand much about poordecisions, we shouldacknowledge that theanalysis of decision mak-ing remains incomplete.Yet we do know that peo-ple are not always seek-ers of information (theobserving literature) andthey often do not utilizeinformation in a logical(conjunction fallacy,base-rate neglect) oroptimal fashion (base-rate neglect, probabilitymatching/ learning). In addition, theseexamples of non-optimal decision makingare all strong, complex, and prevalent inhuman behavior. Hopefully, awareness ofthese fallacies can help us to better appre-ciate the extent to which, and the condi-tions under which, we seek and effectivelyutilize information in our everyday deci-sions. If decision makers use this informa-tion for nothing more than to understandthat a “talent” for making optimal deci-sions may be highly serendipitous, theycould possibly avoid or at least make fewerdecisions based on the misapplication oflearned rules and self-deception.



Checking theresults of a decisionagainst its expecta-tions shows execu-tives what theirstrengths are,where they need toimprove, and wherethey lack knowledgeor information.

– Peter Drucker

If you find yourself frequently saying(or thinking) the following statements, youmay need to improve your decision-makingskills:

• I can evaluate a situation in five min-utes and make a decision.

• Good decision-making is a gut reaction,an intuitive talent.

• I don’t want anyone to think I made amistake.

• Never second-guess yourself.

• I will listen to your input, but I’ve al-ready made up my mind.

• People who point out the negative pos-sibilities are just troublemakers.

• We’ve always done it this way.

• If it worked then, it will work now!

• Don’t ask those outsiders; they don’thave any stake in this decision.

• We’ve already put too much time andmoney into this to quit now.

• I know his/her type.

Even the smallest of personal decisionshave a cascading effect on families andassociates, so imagine the far-reachingimplications of making decisions as thehead of a large corporation. If executivesmake decisions without the knowledge ofmistakes such as subtle judgment discrep-ancies made by individual interpretation,without attending to factual information(both negative and positive), or are blind-sided by personal investment and self-jus-tification, then the odds are that theiremployees and companies will eventuallypay the price.

A CAUTION TO THE READER

In the movie Ground Hog Day, the main

character repeatedly relives the same dayuntil he gets it right: makes the right deci-sions, considers the right facts, and learnshow to make his decisions work for him.While he learns and finally escapes hispersonal time warp, it is prudent in reallife to never assume you have completelymastered the skills of good decision mak-ing. Practice, analyze, look coolly at whatactually led to success or the judgment of“a good decision” and see what you can doto improve that process the next time.New facts or new perspectives beyondyour knowledge often occur.

Be aware of your own limitations andsurround yourself with others who under-stand the fallacies and the likelihood topractice imperfect approaches to decisionmaking—something that is often viewed asan intrinsic ability rather than a skill tolearn and refine. Keep in mind that agood decision is judged in many circum-stances after the fact. Many of the bigdecisions recorded in history or praised interms of the excellence of certain CEO



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decision makers, for example, were oftendescribed as broad in scope and the vari-ables that really led to behavioral successor failure for the corporation were thenattributed to the decision maker. Themany factors of success often happenalong a continuum far removed from theoriginal choice and sometimes in spite ofthat choice!

Another factor is that one choice mayhave led to a series of actions that lookgood—but we do not know if they couldhave been better. Be ready to do post-deci-sion debriefs on what you and othersjudge to be “the best decision ever” andsee if in the chain of events triggered bythat decision, improvements could havebeen made along the way. You can learnto institutionalize checkpoints for deci-sions made as they ripple out. Carefulmodifications in plans are a sign of beingresponsive to ongoing data.

For those of you in positions wheredecision making is part of why you werechosen for the role you have, manage withmodesty and consider carefully any per-sonal blinders that you may have. Takethe principles here to heart and considereach new day as your Ground Hog Day ofdecision-making. Gain fluency in the fac-tors of flawed decision making and broad-en what you acknowledge and to what youattend. Remember that good decisionmaking is a continuous learning event.

NOW WHAT DO I DO?

Now that you’re aware of the possible pit-falls in making deci-sions, don’t lose confi-dence! Remember thatknowledge is power.You can begin to hone

your decision-making skills by simplyremembering the common elements offlawed decision making discussed in previ-ous chapters. You may, for example, incor-porate the following initial process stepsinto your decision-making activity:

• Seek out and seriously examine conflict-ing information.

• Employ and reward employees whospeak up about the emperor’s newclothes at all levels—decisions affectingsafety, productivity, customer service,new initiatives, or the small daily effectsof news they may have that you do not.

• If you are an executive, hire advisorswhose job it is to provide you withnews, information that is “negative” buttruthfully constructive news, or the“bad news” along with the good.

• When making decisions, listen to well-informed professionals who do not havea personal stake (such as self-justifica-



Plans are nothing;planning is everything.

– Dwight. D. Eisenhower

tion) in a previously made decisionand/or investment of time and/ormoney (sunk costs).

• Hired employees or consultants alwayshave some stake, some sunk costs, butsometimes if constructed correctly, suchmonitors can do a very good job of iden-tifying the spin you are making out ofyour own and/or the organization’s pasthistory. When such people are found,be sure to let them know you like them“just the way they are.”

• Remember that “out of the box” think-ing can quickly become “in the box”thinking if novel approaches to problemsolving are ignored or discouraged.

• Don’t rely on making decisions from a“gut feeling” or the “way you’ve alwaysmade decisions.”

Apply this knowledge about decisionsto your own decision-making strategy orshare the research with others.

Conjunction Fallacy: It is in our historiesof reinforcement to come to incorrect con-clusions when confronted with conflictinginformation. Simply knowing that this ten-dency exists may help you remember thatyour sense of logic may really just be a gutfeeling, shaped by your unique experi-ences. “ . . . People need to learn directlyabout the conjunction fallacy in order tocounteract the strong psychological effectof imaginability.”

Base-rate neglect: Our histories andpropensity to apply rules help us deal witha confusing world. However, we may erro-neously apply those rules to current prob-lems, even when the facts don’t apply.Relying too much upon case-specific cuescan also greatly inhibit creative thinking.“Thus we may neglect less conspicuousevidence and go with the ‘tried and true’

or so we think.”

Probability matching: There’s got tobe a catch! Even when told which choiceswill definitely bring the best results, peo-ple want to test the odds. Often, a factreally is a fact. “This [finding] indicatesthat more optimal choices can be eventu-ally attained over a number of trials with-out actually telling people that they shouldchoose the more likely outcome on everytrial. However, in real life, how many baddecisions does that entail?”

Sunk-cost Effect (associated with self-justification): “We’ve already gone thisfar.” “Look, I made the decision and I’mseeing it through!” “Do you know theamount of money we’ve invested in thisproject?” “Some research shows that thesunk-cost effect is just as persistent ingroups as it is in individuals, leading tospeculation about its contribution to thedownfall of past human societies.”

Whenever advised about making per-sonal change, remember the extraordinaryeffect of past success on future behavior—patterns of decision making are often sus-tained long after you find they are notworking because you may not associate,necessarily, the process you go throughwith the sometimes remote impact. Youmay think that what happened was acci-dental or due to those other folks—and itmay well have been.

The process of each of us is to identifytypical decision dilemmas as the list abovehighlights and work to understand how wetreat these conditions as a “checklist” inthe process of deciding. Once we get flu-ent at analyzing our own process, we canthen begin to see where we need tochange. Get a buddy, a trusted advisor toforce you to go through the list—to test



assumptions, to seek contrary informa-tion, and to respond to new informationin an informed, not simply explanatory ordiscounting way. Use a decision tool thatlists these typical fallacies and checkagainst the list.

If you are part of a team, make yourdecision-making process an open one. Putwords to those elements and work to

understand amongyourselves how you arehandling various partsof decision making,including the additionof new information thatmight force a differentconclusion than whatyou really believe or

want to believe. Then you are better ableto tackle the mountain of history fordoing what you have done with reasonablesuccess for all these years.

Any new behavior, like a commitmentto use a list, disappears quickly withoutarranging very systematic conditions toprompt and sustain that new behavior. Anew approach to decision making—andchecking how others see it, how differentinformation might shape it, and how yourown biases and prior success may shapeit—requires practice and review, practiceand review. Do not shortchange theseactivities. Like learning the piano withoutproper instruction, you may overlook asubtlety that leads you to play at a pacethat is discordant to the trained ear.

Your history of learning is the key!No matter how bright human beings are,we are synthesizers to a large extent, try-ing to make sense of our world, and rein-forced by our own perceived success in lifeby the way others respond to us and howevents unfold. We are full of patterns

about decisions and how we read theworld around us. The decisions we makemay sound like a harmonious whole—butthey may at times be full of small discor-dant notes until the decisions we make areso loudly off-key that even we, and thosearound us, cannot avoid the noise theyproduce.

Understand the science of behavioranalysis. Consider that you are not wise,but only “lucky” once in a while—unlessyou have been applying these lessonsalong the way. Work on wisdom in deci-sions. A modest review of your currentsuccess as a decision maker against theseknown flaws may help—and lead to a sighof relief that you have done as well as youhave—that any of us do as well as we do.

Know this truth: Don’t make a very bigdecision that is wrapped in the spun clothof your prior decisions.

Begin to manage your decisions.Arrange the conditions that precede adecision and those that follow to ensure



Don’t make a verybig decision that is

wrapped in the spuncloth of your prior

decisions.

you do not fall into your own “understand-ing.” Be your own best skeptic and sur-round yourself with good people who keeptheir eyes wide open.

Now that you know how many misstepscan occur when making a decision, youmay feel paranoid, if not paralyzed by theinformation. Help is on the way. Whencharged with making a difficult or pivotal

decision, Dr. AubreyDaniels’ Five-step Model*,a behavioral approach toproblem solving anddesigning successfulbehavior change can help.While it will not help youescape your particular his-tory of reinforcement fordoing what you do withoutvery deliberate work, itcan help ensure that

you’ve considered all elements required tojump-start new patterns of behavior.When approaching a decision take the fol-lowing steps:

1) Pinpoint: Define the specific result youwant as the outcome of your decision.Consider the why, what, and how of get-ting to those outcomes. Determine thebehaviors that you and others must taketo drive this result and weigh the invest-ment carefully. Understand every ele-ment involved to the degree you can toensure success or to make progress to-ward your goal. Do so in specific andvisible ways. When appropriate, writeany concerns down and discuss. Staywith what you can see on the roadahead as well as doing a “what if” analy-sis of possible barriers. Be prepared toaddress those barriers when and if theyarise. Pinpoint how you will respond tocontrary evidence, including an adap-

tive process or amendment to yourplan.

2) Measure: Take a realistic and unbiasedlook at the people and monetary invest-ment that was required as a result ofyour past decisions. How should thesefactors impact future choices? Ask your-self if money already spent is influenc-ing your decision about futureinvestment. Use hard data to test allfactors involved in the decision. Con-sider the actions of people and howmuch and how fast they must change tohelp you get to your end goal. Be pre-pared to invest in their success, partic-ularly if new patterns of behavior arerequired.

3) Feedback: Ask for feedback from peopleand experts who don’t have a vested in-terest in the decision you make. Feed-back can also be attained through chartsand graphs that measure your progressor from those who must implement thedecision. Look at the data realistically—and consider how you may not be ableto see clearly. Have others look as well.Get feedback from peers, but also fromothers in your organization—and fromoutsiders—who possess working knowl-edge of the situation in question. Shareall details with those who are helpingyou make a decision, not just the detailsthat work in your favor. Sometimes yourcompetitors have the answers. Look atwhat they are doing and how they areachieving their success. Use this infor-mation as feedback. Learning fromstrange facts and exploring hunches canbe helpful if you then put the spotlightof candid feedback on such strategies.Don’t ignore but do not rely on your“gut feeling.” Test those feelings withgood feedback and data.



ADI’s Five-stepModel is a behav-ioral approach toproblem solving

and designing suc-cessful behaviorchange can help.

4) Reinforce: Acknowledge and recognizeinput, not just the input that supportsyour opinion. In doing so, you are morelikely to gain information that is criticalto making the right decision. Recognizewhen you have considered new informa-tion and give yourself a high five fordoing so. Make your new approach vis-ible by talking about it and celebratingyour ability to adapt to a new way oflooking at very familiar data. When youdo that, you learn to do it again withother routine (or comfortable) decision-making strategies. Celebrate that kindof change with others. When membersof your team do the same, make it visi-ble. Celebrate and memorialize. Remem-ber: these habits of decision makingwhen done without consideration ofpast but wrong patterns may changethe destinies of corporations for thepositive. Reject (when you need to) apath that is leading to the wrong desti-nation. Stop doing those things that getin your way or that show up as favorite(but flawed) strategies.

5) Evaluate: Sit back and weigh the verac-ity and clarity of all the previous foursteps. Redo any steps that seem vagueor not well-researched. Evaluate at alllevels of the organization in terms ofthe impact of the decisions you are mak-ing. Many people use the five steps asa review before acting. When doing this5-step review as an exercise, it nevertakes the place of actually doing some-thing to see what really happens. Behav-ior is like a river and it can drift or turninto dangerous rapids, fast becominguncontrollable; so remember, it is in liv-ing out decisions that much about thedecision is knowable, not before. Keepyour eye on the ripple effect of your de-

cision as it progresses; reshape, build abridge, dam it up if needed, and reroutewhen necessary. When you feel comfort-able that all of these steps have beencompleted and your facts are thoroughlygrounded, then you are better preparedto make the correct decisions along theway. Always keep in mind that this isan active, continuous model.

Remember Ralph WaldoEmerson’s words as yougo down this path: “Afoolish consistency is thehobgoblin of little minds,adored by little statesmenand philosophers anddivines.”

Now make a decision, already!

• • • • •





[About the Author]DARNELL LATTAL, PH.D.

Darnell Lattal was electedChair of Aubrey DanielsInternational's Board ofDirectors in January 2014after serving 14 years asthe firm’s President &Chief Executive Officer.

With over 30 years of workplace consultingexperience including strategy implementa-tion, behavioral systems redesign, and lead-ership development, Darnell’s expertise liesin coaching behavior change to further thegoals of the organization. In her new role, sheoversees the continuing strategic businessdevelopment of ADI, offers executive coach-ing, engages in consulting activities, and sup-ports its international alliances.

[About ADI]Regardless of your industry or expertise, onething re-mains constant: People power yourbusiness. Since 1978 Aubrey Daniels Interna-tional (ADI) has been dedicated to accelerat-ing the business and safety performance ofcompanies worldwide by using positive, prac-tical approaches grounded in the science ofbehavior and engineered to ensure long-termsustainability. ADI provides clients with thetools and methodologies to help move peopletoward positive, results-driven accomplish-ments. Our clients accelerate strategy execu-tion while fostering employee engagementand positive ac-countability at all levels oftheir organization.

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