Tag Archive: Daniel Kahneman

The Pre-Mortem Technique

During my research on how to make better decisions I came across the pre-mortem in the writings of Nobel Prize winner Daniel Kahneman. He notes in his book, Thinking, Fast and Slow (2011), that the pre-mortem technique is valuable in the decision-making process because it has two main advantages. PreMortemFirst, it overcomes “groupthink” that affects many teams once a decision appears to be made. When groupthink is in effect, the wisdom of a plan or decision is gradually suppressed and eventually come to be treated as evidence of disloyalty. The collective suppression of doubt contributes to the group’s overconfidence, which is often a tragic flaw.

Second, it unleashes the imagination of knowledgeable individuals in a much needed direction—the opposite direction of the decision. The principal advantage of the pre-mortem technique is that it legitimizes doubts and encourages everyone, even supporters of the decision, to search for possible threats not considered in the decision-making process. I immediately recognized it as an excellent technique for decision-making, risk management and general leadership.

Because this has proven to be of great value, I would like to share this excellent technique with you. The pre-mortem is easy to implement once the team reaches a decision or finalizes a course of action. Here’s what you need to do:

Step back and state the following: “Imagine that we are one year into the future. We implemented (the decision and plan) exactly as decided here today. The outcome was a total complete disaster. Take 5 to 10 minutes to write a brief history of that disaster.” If someone asks: “What do you mean by a total disaster?” Reply: “In any and every way imaginable it was a total failure.”

Then, explore all the possible reasons that the decision or plan failed. By taking this opposite approach to brainstorming the ideas, your team will likely realize that there are more points that need to be thought through before the plan is implemented.

Merit Career Development incorporates this technique into our leadership, strategic decision-making, risk management and project management classes and it is very well received.  In one recent class the participants clutched the flip charts from the group discussion. I saw this and asked what were they going to do with them? I was told that they were going to present the findings to upper management; they had never participated in such a rewarding experience.

Merit can help guide your team through various tools and techniques to optimize your team’s knowledge, skills and ability with techniques and tools such as pre-mortem and many others. Please contact Jim Wynne at jwynne@meritcd.com or call him at 610-225-0449 to schedule training to learn this and other valuable decision-making techniques.

Permanent link to this article: http://meritcd.com/blogs/the-pre-mortem-technique/

Infographic: Keys to Improving Decision-Making

In just the few minutes it will take you to review these graphically presented facts, you will gain a good sense of the factors and issues that impact our decision-making. When we pause to understand these, we can literally improve the outcome of our decisions.

Feel free to share this graphic on your own website, through social media or by email. Just click on the code below the graphic to copy for your own use. Of course there is a lot more detail and guidance available for your team or organization on decision-making and other leadership enhancing strategies. At Merit Career Development we offer on-site, virtually-led and on-demand programs that help improve communications, productivity and impact the bottom line. For more information, contact us.

Improve Decision-Making; all rights reserved Merit Career Development 2014References:

www.hbs.edu/faculty/PublicationFiles/08-102.pdf

www.nytimes.com/2011/04/24/business/24unboxed.html?_r=1&

hbr.org/2011/06/the-big-idea-before-you-make-that-big-decision/ar/1

www.mckinsey.com/insights/strategy/Flaws_in_strategic_decision_making_mckinsey_global_survey_results

researchnews.osu.edu/archive/decfail.htm

 

Feel free to share this infographic on your website by copying and pasting the code below. To share this on social media, please see the links below the post. Thanks!

Permanent link to this article: http://meritcd.com/blogs/improve-your-decisions/

Close the Deal with the Right Frame

Framing in SalesAlthough the wrong frame in the wrong situation can lead to bad decisions, using the right frame can be beneficial in closing sales with prospective customers.

In her seminal 1996 book, “The Power of Framing: Creating the Language of Leadership,” Gail Fairhurst, Ph.D., explains that when we communicate through framing, we shape the reality of a situation. Our past experiences and perspective create a frame through which we perceive the world and which guide our decision-making. However, the wrong frame in the wrong situation can lead to bad decisions. As Fairhurst explains, through effective framing and use of language, we can become better leaders because we are relating to our followers better and, therefore, being more persuasive.

When it comes to selling products and services to prospective customers, frames can interfere with making the sale. But they can also have a positive effect when used appropriately.

Framing for positive outcomes

During the sales process, associates need to be cognizant of the potential buyer’s own frame and how it affects how he or she makes purchases. Many buyers may be hesitant to commit, and these objections can result in failures and frustrations. To navigate the buyer’s hesitations, salespeople need to frame their interactions—drawing on the customer’s wants and needs—to make the customer care about what they’re selling.

Appealing to emotions is essential to the sales process, the buyer should feel good about his or her decision to purchase the product. The salesperson should focus on putting positive twists on perceived negatives, as they can affect how customers react to a sales pitch.

“The Framing of Decisions and the Psychology of Choice,” written by Daniel Kahneman and Amos Tversky and published by the American Association for the Advancement of Science, touched upon the psychological principles of framing. The authors’ posit that people are more influenced by the pain of loss rather than the rewards of gain and will take greater risks to avoid loss than to see potential gain. By framing a pitch around eliminating the threat of loss, salespeople have a greater chance at success.

An effective framing sales pitch puts an emphasis on the outcome, showing prospective clients that they will experience a positive change from purchasing the salesperson’s product or service. While framing can be problematic when used inappropriately, with professional coaching it can be leveraged during the sales call. Creating context for the potential buyer can be the difference between losing or closing the deal.


© 2014 Merit Career Development. All rights reserved. For more information, please contact Jim Wynne at jwynne@MeritCD.com.

Permanent link to this article: http://meritcd.com/blogs/close-the-deal-with-the-right-frame-v2/

Improve Your Decision-Making, Improve Your Leadership

Decision-MakingDid you know that we make about 35,000 decisions a day? Learn about the many factors, conscious and sub-conscious, that affect our choices, and how we can control the ones that will help us make the best decisions.

The brain is a powerful machine constantly working behind the scenes, absorbing and dissecting information at an unimaginable rate. Without even realizing it, most people make thousands of decisions every day, from choosing a snack to making swift decisions while driving. Of course, there are the tougher decisions that we really contemplate, too.

Making the best decision is critical to success in most fields and disciplines. Our lack of understanding of how our minds work has profound consequences. Modern psychologists are studying the processes in our complex and sophisticated brain and have identified common errors in thinking, shortcuts used in the decision-making process, and cognitive biases that influence our decisions without our knowledge.

We know that good decision-making is critical to business success and will impact the bottom line. Daniel Kahneman, PhD, a Nobel-prize winning psychologist and author, explains how the brain functions in making decisions. In his book, “Thinking, Fast and Slow,” he breaks down the decision-making process into two systems: System 1 and System 2.

System 1 works quickly and deals with automatic, unconscious thinking, such as finishing thoughts and sentences. It’s deeply rooted in our intuition and emotional mechanism. System 2 works more slowly, focusing on logic and problem solving. It is associated with deliberative thinking and complex computations, while System 1 is more reactive and creates impressions and feelings. Leveraging these two aspects of decision-making can be enormously beneficial.

One of the most significant of the biases that affect our decisions Kahneman calls “pervasive optimistic bias” which gives us the feeling of having control. That is also referred to as “illusion of control,” the tendency for people to overestimate their ability to control events In their lives. Other biases that need to be understood and considered include: ”framing”, where familiar numbers form the context for our decisions, although there may not be any reason for them to be relevant or accurate, and “loss aversion,” a tendency to fear losses more than value gains.

Professional assistance and career development

At Merit Career Development, we stay on top of the latest proven research and integrate these findings into our unique and engaging programs. As a result, participants can learn about many different features that are integral to the decision-making process. We help our clients understand how the two primary systems generate actions for quick thinking and more thought-requiring decisions.

Participants in our “Better Decision Making” program will learn about traps like biases and blind spots that can unconsciously and negatively affect best decision-making practices. Merit teaches the tools to develop effective listening techniques and how to adapt and apply this knowledge to different types of situations.

Like most Merit programs, this highly engaging and interactive workshop is ideal for optimizing learning retention of valuable information. Numerous rational tools and practical techniques ensure that the lessons taught will be carried over into real-life workplace scenarios.

Interested leaders can review the course outline for Merit’s “Decision Making and Problem Solving” to discover why it is the one-stop for dynamic workforce training.


© 2014 Merit Career Development. All rights reserved. For more information, please contact Jim Wynne at jwynne@MeritCD.com.

Permanent link to this article: http://meritcd.com/blogs/improve-your-decision-making-improve-your-leadership-2/