October 31st, 2018
We all make mistakes, sometimes obvious ones. Why do smart people (like you and me) make dumb decisions?
Over the years I have identified 12 reasons why we make mistakes. Being conscious of these has helped me make better decisions. I hope they do the same for you.
EMOTION
Emotion clouds judgment, causing us to make errors.
It also makes us freeze, delaying action and making things worse.
My friend, Bruce, once gave me sage advice, "A problem is a set of facts compounded by emotion.
TAKEAWAY: Extract the emotion, analyze the facts, and make a decision... now.
QUANTITY
Quantity of data influences our decisions because we intuitively presume more is better. Sometimes that's true. Sometimes not.
Judging from the quantity (and deplorable quality) of many television commercials, businesses constantly try to leverage our more is better bias.
TAKEAWAY: Don't presume quantity of information is quality of information.
RECENCY
Information acquired recently influences our decisions more than information acquired long ago. We are biased to assume that what we learn today is more accurate than what we learned yesterday. Often it's not.
TAKEAWAY: Don't presume that recent advice is decent advice.
FRIENDS
Even when they're not asked, your friends will always volunteer their advice (and knowledge) because they want to be helpful. But just because people care, that doesn't mean they know better, or that their advice is right for your particular situation.
TAKEAWAY: Don't presume trusted friend is a knowledgeable friend.
HISTORY
I have a friend who won't engage in meaningful relationships because her first husband was a loser. That's like a child who won't get back on her bike because she fell and scraped her knee.
TAKEAWAY: Don't make broad decisions based on narrow experiences.
DILIGENCE
Failure to do the homework is the main reason we make bad decisions.
Diligence should be in proportion to the importance of a decision. Obviously, deciding where to eat lunch shouldn't require the same degree of research and thought as choosing someone to care for your child.
TAKEAWAY: Do homework in proportion to importance.
