My previous blog focused on data-driven decision-making. But this also applies to how decisions are made in organizations and to (strategic) decision-making in general.

In 2017, Freek Vermeulen and Niro Sivanathan wrote an interesting article in the November-December issue of Harvard Business Review entitled 'Stop Doubling Down on your Failing Strategy - How to spot (and escape) one before it's too late '. In it they provide insight on how organizations sometimes hold on to a chance-less strategy for too long because of some persistent biases and the aforementioned Human Biases. In this article, they name six ways to reduce the negative effects of those biases in strategic decision-making.

Reduce the influence of bias and emotion in decision making

To begin, Vermeulen and Sivanathan argue that both in the way decisions are prepared and in the way decisions are made, the effects of said biases and emotional blocks can be reduced.

One way to do this is to separate argumentation and advocacy from decision-making (PDO stages: Opinion Forming, Judgment Forming, Decision Forming). Or by giving the minority an explicit voice and including it. What is also a good alternative is to have decision-making done by larger groups and multiple plural teams. By the way, this is different from the sometimes endless "Polish country days" within organizations whose sole purpose is to passively involve employees.

Six principles for better strategic choices

Many organizations cling too long to a strategy that has been successful in the past. This is also called escalation of commitment, continuing to invest in a particular course of action despite signals that it is no longer effective.

The causes often lie in our own thinking. People are prone to biases, such as biases and unfounded assumptions. These are mental characteristics of people that can get in the way of objective (data-driven) decision-making. Several studies show that organizations that apply the six principles below are less likely to stick to a long-running and ultimately dead-end course. Thus, you reduce the chances of escalation of commitment.

1. Clearly establish rules for decision-making
2. Give attention to voting ratios in decisions
3. Protect dissenters and give them attention (even if they stand alone)
4. Consider alternatives emphatically
5. Separate argument/advocacy and Decision-making in the process
6. Learn to deal with regret for a wrong choice and accept it

Common thinking errors (bias)

About Jeroen Kuijlen

This blog was written by Jeroen Kuijlen, responsible for the Data Strategists business unit within Valid. Data Strategists advises and assists organizations in developing and realizing their data strategy and applying data innovations. Starting from the organizational strategy and goals, this involves looking at issues such as information policy, data governance and the translation to architecture principles and the design and implementation of data platforms. In addition to his leadership role, Jeroen is also partly active as a strategic advisor in the field of information policy, data management and innovation.