4 Mistakes That Lead to Rigged Decision-Making
The following is adapted from Measure, Execute, Win: Avoiding Strategic Initiative Debacles and Knowing What Your Business Can and Can’t Do Well.
Executives today are under an enormous amount of pressure to deliver results. Yet, despite this pressure to perform, nearly 50 percent of executive initiatives fail.
One reason behind this failure is that many executives fall into the bad habit of making a decision first and finding data to support it later. This process results in what Thomas Redman, Ph.D. calls a “rigged decision.”
The Pathway of a Rigged Decision
In an article in Harvard Business Review, Redman warned that many of our failed initiatives are the result of these rigged decisions, which he said unfold like this:
- You make a decision based on some or all of the following: ego, ideology, experience, fear, or consultation with like-minded advisers.
- You find data that justifies your decision.
- You announce and execute the decision, and defend it to the minimum degree necessary.
- You take credit if the decision proves beneficial, and assign blame if not.
Redman warned against making a decision first and finding data to back it up later. “Faster is not the same as well-thought-out,” he said. However, the temptation to make fast decisions is stronger than ever. As Redman pointed out, “Few people set out to make a rigged decision, but when you’re pressured to make a choice fast, you may fall victim to a flawed process.”[1]
A Lack of Foresight
Many ill-conceived initiatives can be chalked up to inadequate strategizing. Executives fail to put the time and thought into how events will pan out and what will be the deciding factors.
Donald Sull, in his article for MIT Sloan Management Review, wrote, “Managers can rarely identify all the factors that will end up mattering in the future, let alone predict how events will unfold.” In the presence of so much uncertainty, they often “accept the presence of uncertainty, make a best guess on a strategy based on the data at hand, commit to the strategy, and then hope for the best. But even though executives might try to mitigate risk by, for example, diversifying their lines of business, the fundamental logic remains: Place your bets and take your chances.”[2]
Keeping up With Demand
Within the largest organizations, the pace of change is now so fast that upper management feels compelled to make fast decisions in order to meet demand, so they substitute data with assumptions to fill in the gaps. Rather than saying, “Our data indicates we can successfully move forward on this initiative,” they say, “We’ve done something similar to this in the past, so let’s assume it will work.”
These assumptions create a false sense of confidence, but they also allow leaders to implement decisions swiftly. In many instances, politics or other social influences bolster this uninformed decision-making. Some executives, those with high emotional intelligence, are able to “sell” their ideas despite the lack of data, influencing people to approve the initiatives they want to move forward on.
By the time the company decides to implement a strategy, they don’t even recognize the mishmash of biases that is informing the decision. They simply assume they are acting as leaders. “This is what we do. We are leaders, so we bring insight and experience and make decisions.”
What leaders overlook is that every decision they make has a unique set of conditions that determines whether or not the business can implement it. This is why basing a decision on past success is never a reliable metric. One effort can go incredibly well and then another very similar effort, which might run parallel to the first, overlap it, or occur in sequence, goes horribly wrong.
As a leader, when you engage a team — whether a product team, marketing team, or acquisition team — the conditions they have to address in order to bring your idea to completion are unique to the business and market for that specific time period. This variability is unavoidable.
Improve your outcomes by making every new decision, regardless of how much it resembles past choices, based on data relevant to the unique circumstances. By relying on a true metric first and making your decision second, you’ll have much better results and avoid the rigged-decision trap.
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For more advice on executing your initiatives, you can find Measure, Execute, Win: Avoiding Strategic Initiative Debacles and Knowing What Your Business Can and Can’t Do Well on Amazon.
Alex Castro is the CEO of M Corp and has helped clients deliver complex corporate strategies for the last twenty years. He finds new approaches to serving and building companies by identifying their operational vulnerabilities and correcting them, and the ReM Score has evolved from hundreds of engagements into a digital platform tool. Alex is a graduate of Northeastern University, where he was a collegiate rower, and he later went on to coach the University of California-Davis rowing team. He is also an avid mountain biker and has two wonderful daughters who are a constant source of inspiration and joy.
[1] Thomas C. Redman, “Root Out Bias from Your Decision-Making Process,” Harvard Business Review, March 10, 2017, https://hbr.org/2017/03/root-out-bias-from-your-decision-making-process.
[2] Donald N. Sull, “Closing the Gap Between Strategy and Execution,” MIT Sloan, July 01, 2007, https://sloanreview.mit.edu/article/closing-the-gap-between-strategy-and-execution/.
