37 of 37 people found the following review helpful
on December 27, 2004
I read this book as part of a class in graduate school, and I found it to be quite practical, not only providing insights into ways that decisions can go wrong, but also steps that can be taken to reduce biases in your decisions due to errors in the process, although some of the strategies can only be effectively implemented at the organizational level.
I consulted this book because it was in two different bibliographies, one from my professor's notes, the other from Plous' book, "The Psychology of Judgment and Decision Making." What I didn't realize until after I had read this book was that it has been updated and reissued under a different name, "Winning Decisions : Getting It Right the First Time." If I were buying it again, I would order the newer version.
13 of 14 people found the following review helpful
Most decisionmakers make the same kinds of error. There needs to be a frame for each problem. There should be avoidance of plunging in and relying too heavily on supposed good judgment. Drawing boundaries are part of framing the questions. Managers are apt to draw narrow boundaries.
Sometimes there is a failure to draw a boundary line. There is the sunken cost fallacy, basing current and future changes in operation on past expenditures for equipment. One is influenced by reference points in the the problem frame. Some decisions make sense through several different frames. In such a case there can be certainty that the decision is a good one.
Good communicators align their communications with the listeners' frames. Virtually all people put too much trust in their own opinions. Most people favor data supporting current belief. Wrongly we associate confidence with competence. One should be a realist when making a decision and an optimist when implementing it. Rules of thumb and other decisionmaking shortcuts are called heuristics. The disadvantages of intuitive decisionmaking are more profound than people realize.
Members of groups may agree prematurely on wrong decisions. Groups may suffer from too much cohesiveness, harmony, pressure, insulation, and strong leadership. In group think people practice self-censorship, pressure others, give in to an illusion of invulnerability and erroneous stereotyping. Groups composed of people of mixed types of personality are useful--receptive versus focused and thinking versus feeling types.
The book is written in veritable outline form, presumably to get the attention of busy managers. It has a extensive notes supplementing the text giving a student of business and other fields an opportunity to pursue related lines of inquiry.
6 of 6 people found the following review helpful
on February 6, 2009
Despite this book having been published nearly two decades ago, an executive-level colleague at my office urged our team to read this book. Good advice stands the test of time. On reading the book, I agree--this has much good, common sense and sound insight to offer, although I had to wonder at much more recent studies I've read that advise something quite the opposite from what Russo and Schoemaker encourage. That is, take the time to consider the parameters of making good decisions.
Taking the time, however, is not what I've been reading in much more recently published books like Malcolm Gladwell's "Blink: The Power of Thinking Without Thinking," which basically states that we need to tap into our inner wisdom, that storehouse of all the experience and observation we've accumulated over a lifetime (the longer the lifetime, presumably, the more wisdom stored), trust it, and make the "snap judgments" that actually hold up to often be our best decisions. Fascinating. Looking back on my own span of a lifetime, my best and worst decisions, I have to lean toward "Blink." That inner voice of wisdom does know. It is when I have ignored its red flags waving that I have made my worst decisions. And paid heavily for it.
That said, I tend to be cynical about any idea that leans too heavily one way or the other. Fads are based on swinging pendulums. The truth tends to be a balance of varied ideas and common ground, and in this, "Decision Traps" appeals to me. Russo and Schoemaker do not disparage the value of making the occasional off-the-cuff decision. There are those times that over thinking something, over analyzing, too much brain over heart (i.e. inner voice of wisdom), can be a slippery path to rationalization, and rationalization almost always translates into bad decisions made on false premises.
"Decision Traps" is an exploration of how decisions are made, and then, the ten traps, or barriers, to making good decisions. These all require time and careful consideration to overcome. No blinking here. And although this book is geared toward making business decisions, I see no reason why one cannot consider these same traps in making personal decisions.
Barriers and means of overcoming them include what Russo and Schoemaker call "framing" a decision (dramatically different solutions arise from what perspective we take on a problem, from what direction we approach it), the gathering of relevant information and intelligence (knowing what you don't know in some instances is even more important than knowing what you do know), the pitfalls of making group decisions ("groupthink" and expert teams vs. teams of experts), why people can't seem to learn from their mistakes (hindsight is always biased and almost never useful), improving feedback (consider not only the results of your decision but calculate also the potential results of the choices you did not make), being overconfident (a major cause of blind spots in decision-making and a good argument against the more contemporary fad of "positive thinking"), and other valuable points to consider.
One of the more fascinating areas in this book, to me, is the discussion on groupthink. This is the process, or effect, of how people subtly change their thinking, and so their decision-making, according to group dynamics. Indeed, it appears to be nearly impossible to resist peer pressure, let alone the pressure to be agreeable with our superiors, and the result from this is narrow thinking at best, and a suppression of creativity and innovation (i.e. potential problem solving), leading to disastrously false thinking, at worst. President Kennedy's team of experts making the disastrous decision resulting in the Bay of Pigs is a common example used to illustrate how highly intelligent and confident people make terrible decisions when they work in groups. In fact, the more mutual respect and personal bonding there is in such groups, the more powerful the effect of groupthink. We often do not realize how we slip into being agreeable with those we like (or wish to like, or be liked by), and our thinking becomes heavily biased. Many studies have shown that people will suppress all evidence to the contrary when they have a subconscious desire to fit in with others. No one (see the Bay of Pigs) is immune to this effect. Best group thinking, then, happens when a group consists of team members who are very different in their experience, perspective, even personality type. It is crucial to encourage an atmosphere of, well, disagreeability so that all possible viewpoints might be considered.
Another fascinating point to me is the ineffectiveness of hindsight. That is, why do we not learn from experience? Why has humankind learned so little from history, repeating the same mistakes again and again and again? Russo and Schoemaker basically state that hindsight is without value. The day-after discussions of sports come to mind. "In general, the clarity of hindsight is an illusion. And it often hampers learning from experience." (pg. 183) It is impossible, the authors state, to think after the fact in the same way as we thought before the fact. Indulging in hindsight only increases the possibility of making future faulty decisions. Why then do we so waste time in this indulgence? Human nature craves control, the authors write, and so we pretend to understand what we cannot, and that something could have been averted or changed when it could not. Rather than learning from things gone wrong, we do all that we can to avoid learning, thumping our chests with empty hindsight "wisdom."
A tangent on this effect is the individual's difficulty to learn from experience, from past mistakes, instead repeating those very same mistakes in future scenarios. Again, the authors remind us, note the need to control what is often beyond our control. We must be ever vigilant of our weakness in trying to rationalize away our own faults and weaknesses. It is, again, human nature to take credit for our successes while blaming our failures on outside factors. Rather than facing up to our mistakes with ruthless honesty, we tend instead to minimize and avert our own honest gaze, and so doom ourselves to remain as we are, not learning from our mistakes, but rather deepening our tendency to repeat them. "Periodically list your failures; if the list is short, be suspicious." (pg. 182) "To avoid the pain of admitting mistakes, we rationalize. We may distort our memory of what we actually did or said; unrealistically blame the failure on others or on supposedly unforeseeable circumstance; say our original prediction was misunderstood or misinterpreted; change our current preferences so the failure seems less important ... But rationalizations benefit us only in the short-run. You can learn from mistakes only if you acknowledge them." (pg. 179)
Despite its two-decade old publication, "Decision Traps" has much to offer. There may be merit to making quick decisions, especially if one does have broad and expansive life experience, but our internal biases are very real, and to be aware of them, and other factors in our decision-making, can be very valuable indeed, in our work as well as our personal lives.