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Helping Human Resources Play a Strategic Role in Decision-Making

by Larry Bloom and Adam Bloom
 

It is not what we don’t know that causes problems; it is what we know that just ain’t so.

— Artemus Ward

Companies are Decision-Making Factories

Whether it makes chemicals, financial services, or software, an organization is a factory that also manufactures judgments and decisions.  The decision-making process ultimately impact revenues, costs, employee loyalty, and more. To play a strategic role in the C-Suite, HR must help their company improve the quality of decision-making by 1) understanding the problems with the decision-making process and 2) helping executives and key employees avoid these problems.

The Decision-Making Process is Flawed

You see, many problems of businesses today are not the result of software bugs or other factors that occur outside our thinking, but rather they are “self-inflicted” as a result of mind-bugs™—bugs in the critical internal processes that occur in the five inches between our ears. The pervasiveness of mind-bugs in business decision-making is because mind-bugs are a product of human nature—hard-wired and highly resistant to feedback. Mind-bugs cause us to lament after the fact; “What was I thinking when I made that decision?” 

4 Key Questions to help the Decision-Making Process

When you look at it, there are two basic steps in decision-making – gathering information and processing it.  Based on 30 years of experience growing a company to $700M+ and 5 years of research across psychology, social cognitive neuroscience, behavioral economics and more, I found that humans have natural flaws in these two basic decision-making steps.  Based on my research, HR managers can ask four key questions to help reduce risk in decision-making and avoid mind-bugs.  While my book goes into much further detail, the first two questions begin to address issues with how we gather information, and the second two cover how we process information.

1. Do we have sufficient information to make this decision?

With “sufficiency errors” in thinking, we get enough information to satisfy our wants and desires when we truly need more. The sufficiency dimension addresses mind-bugs that cause us to believe that an argument and its support are sufficient when there are actually gaps.  We may gather, present, and/or accept data as sufficient for a decision that does not completely frame the situation in a balanced fashion as long as it supports the decision we (or our manager) subconsciously want to make.

2. What makes us confident that the information is accurate?

With accuracy flaws, we believe something is accurate when it isn’t. The accuracy dimension addresses the need for clearly defined, reliable, factual, precise, and fair information. Accurate information is one of the underpinnings of any decision. Mind-bugs in this dimension cause a failure to appreciate the difference between unverified information and fact or we may generalize without proper evidence.

3. How does each individual’s beliefs color the decision?

Our own life experiences can corrupt a decision. The beliefs dimension addresses the idea that whenever we reason, we do it within a point of view. Any flaw in that point of view is a possible source of faulty thinking and mind-bugs. Our point of view is influenced by our feelings, desires, thoughts, and decisions. Belief mind-bugs may cause us to get so locked in that we are unable to see the issue from other rational points of view.

4. What is the influence of the group involved with this decision?

Sometimes, groups of people influence decisions in problematic ways. The social dimension is where we reflect on the group’s definition of reality, as well as bureaucracy, power structure, and vested interests in conjunction with any decision. Groups of people generally have a reason for existence. Mind-bugs in this dimension cause us to conform to the thinking of our group and disproportionately stick to the status quo.

When HR helps avoid mind-bugs, it just takes an improvement on one key decision to create significant financial value. Imagine what is possible when all corporate decisions are mind-bug free.

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