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by Donald L. Caruth, Ph.D.,
and Gail D. Handlogten

Decisions, Decisions
Twelve decision-making mistakes and how to avoid them

 

Decision making isn’t the only job of a manager. In fact, according to management guru Peter Drucker, managers--at any organizational level--don’t spend a great deal of time making decisions. Decision making is, however, a specific managerial task and has far-reaching consequences attached to it. When a manager makes a good decision, it often seems that few people ever notice; on the other hand, bad decisions are routinely remembered for years to come. Therefore, it’s imperative that managers recognize the mistakes to avoid in decision making. Twelve of the most common errors made by managers are de-scribed in the following paragraphs.

1. Failure to recog-nize a problem. Too often, managers operate on a frantic, day-to-day basis without realizing that a problem exists. They may have a nagging thought that something is amiss, but they may also seem resigned to the fact that things are this way because of the “system” and that someone else--externally or internally--will take the necessary positive action to change what’s wrong. When this becomes their mindset, managers abdicate their responsibilities. Any time schedules present obstacles or operations don’t run according to plan, a manager should suspect that a problem exists. It’s incumbent upon the manager to take action and aid in resolution of the problem.

2. Incorrect problem identification. Proper identification of the problem is the next step in effective decision making. This step is also the most difficult because symptoms are often mistaken for real problems, and effects are often confused with causes. Symptoms and effects are mistaken for the problem because, as a rule, they’re more obvious. Problem-solvers attack obvious irritants not only because they’re apparent but also because of the environmental pressures within which decisions are made. Because managers often operate within a dynamic environment, time always seems to be one of their chief adversaries. Thus, the obvious alternative offers less resistance. Any decision that fails to deal with the real problem or doesn’t address the source of difficulty is, in effect, a bad decision because it will most likely produce an unsatisfactory solution.

3. Insufficient consideration of alternatives. For any problem that confronts a decision-maker, there are probably at least three (and maybe more) alternative solutions. Failure to think through the alternatives exposes a manager to the risk of overlooking a sound, practical decision. Thinking through alternatives means not only expanding one’s mind to generate ideas--”thinking outside the box”--but also considering possible repercussions that may arise by selecting each alternative: the unsought consequences of a course of action. Decision making requires careful thought as well as investigation beyond the obvious.

4. Inadequate evaluation of risk. Every decision should be evaluated in terms of costs and benefits or in terms of risks involved and possible results. Failure to do so often produces high-cost, complex solutions from which the payoff is minimal. When considering costs vs. benefits, a manager has several methods available to handle risk so that the most effective decision is made for a given situation. These methods include avoiding the risk by seeking less risky solutions, reducing the risk by training employees properly and eliminating risk through insurance or hedging--where possible. If the decision-maker evaluates risk systematically, a more educated decision will follow.

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 and regulations. If a manager lacks authority to initiate standing plans of this nature, he or she should refer the recurrent problem to someone higher up in the organization who can develop such solutions.

6. Unnecessary decisions. “Fools rush in where angels fear to tread” is an old saying that offers sound advice where decision making is concerned. Occasionally the problem confronting a decision-maker is of such a nature that the best action is to do nothing but simply watch and wait. Although few problem situations are likely to improve on their own, there’s always the possibility that they won’t deteriorate any further either. To take action in such a case may only subject a manager to unnecessary risk--risk that could be avoided through an “action through inaction” strategy. Because, as pointed out earlier, every decision entails risk, it’s important for managers to know when to take risk and when to sidestep it. However, when the “no action” approach is used, a manager must continue to observe the situation and take action if further developments merit it.

7. Delayed decisions. There is 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 will be. Fast decisions--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 the wrong decision. Second, a quick decision allows a manager to move on to other problem areas requiring his or her attention.

8. Lack of follow-up. Every decision should be followed through to see if the decision is producing the expected result. Not every decision is going to be as effective as it was first believed. Consequently, the decision-maker must always monitor the situation to determine if things are working according to plan.

9. Ignoring input from others. Decision-makers commit a crucial error when they fail to seek and consider input from others, especially employees actually involved in performing the work. Those closest to the problem often know what’s required to solve it and are willing to provide their thoughts, if only someone would ask.

Discussions with others at the same level, if the organization is large enough, or with managers in other organizations are often useful in providing input for problem analysis and decision making.

10. Using the same solutions to solve different problems. All too often, managers think that any problem can be solved by throwing enough people and money at it. Decision-makers must recognize that each new problem should be approached without a preconceived notion of how to solve it. Different problems will require different solutions.

11. Insufficient data collection. When a problem occurs, a manager may grab the few facts at hand or limited information that is readily available and base a solution on this limited research. In many cases, the collection and analysis of additional data might suggest an entirely different approach to solving the problem. A decision-maker should always ensure that enough information has been collected and analyzed to make an intelligent decision.

12. Shooting from the hip. One of the greatest temptations in problem solving and decision making is to make a snap decision. Such hastiness frequently results in decisions that miss the mark, backfire or create additional problems, thereby costing the organization additional expenses. The trick is acquiring the skill of making a quick decision that correctly considers the situation rather than one that is rapid but off the mark. This skill can be learned and developed by analyzing each decision made.

Although decision making is not the only job of a manager, it’s an important task and most certainly one for which managers will be long remembered should they “blow it.”

Praise seems to be rarely accorded to the manager who renders an effective decision. Perhaps that is because everyone believes that managers are paid to make good decisions. Bad decisions, on the other hand, have been known to create legends such as aviator Douglas “Wrong Way” Corrigan in the 1930s or the newspaper that in 1948 declared Thomas Dewey president of the United States.

These mistaken decisions will live forever. Few managers can tolerate such infamy. In order for managers to place themselves in the best position to make effective decisions, they should recognize the mistakes to avoid in decision making and take action to preclude poor decisions.

About the authors

Donald L. Caruth has a doctorate in management from the University of North Texas. He is a Senior Professional in Human Resources, an accreditation conferred by the Society for Human Resource Management. Caruth is also a consultant in management development and compensation.

Gail D. Handlogten has a master’s degree in human resources and training from Amberton University. She is a Senior Professional in Human Resources and is co-author of Managing Compensation (Quorum Books, 2001). Handlogten is a consultant in human resources.