When decisions turn out wrong how do you react? Is it a case of moving on quickly and hoping people forget, undertaking a review and despondently wishing that it was something someone missed and thereby not your fault, or is it a robust post-mortem and review of process so that decision-making is improved and mistakes are used for learning?

I have mentioned before a book called Think Again and there is a YouTube presentation from one of the authors that provides a useful summary http://youtu.be/Ps9adOJjqes . Adding to that is a book from Michael J. Mauboussin about Think Twice -Harnessing the Power of Counter-intuition. Both books examine a number of decisions that are made and suggest an approach to improved decision making. As a business leader or manager this would appear a great insight and a real opportunity for managers and leaders to grasp improved approaches that would enhance their effectiveness and decision-making success – but there is a catch!

The models have some similarities and both highlight the importance of good governance for decisions, active consideration of alternatives and gathering data from external views and cases that could be considered similar. They also point out the need for honest examination of self-interest, any pre-judgements or biased views of the situations and how we need to mitigate these in our assessments.

All of these sound sensible but could struggle when the boss is not a self-aware and open leader. In many situations the “boss” may state a situation and their decision, not seek input or dissenting views and certainly not appreciate any governance oversight.

Misleading experiences, misleading prejudgments, inappropriate self-interest and inappropriate attachments are four root causes of errors in thinking that lead to bad decisions. The wisdom of crowds highlights that the use of a non-expert and truly diversified group to provide input on decisions adds to decision quality. This is covered by Mauboussin and builds on the excellent book by James Surowecki (Wisdom of Crowds).

So what else can you do? The use of a pre-mortem is a great way to get people thinking more broadly about the issues and aspects of a decision and asks participants to go to the future when they are all sitting in a room analysing what went wrong. In this way they can better reflect on where the risks are to decision success and where more information, review and analysis may be required.

Underpinning a lot of this is the need for a strong team environment where people can challenge decisions, test options and ensure robust debate occurs for key decisions. If there is not a high level of trust and commitment within the team there is unlikely to be the level of courage or care to challenge the decision – and yet that is exactly what is required.

So if decisions are not being well made in your business look first to building the trust and commitment of the team then examine the decision-making processes that you use to increase the probability of making the right decision.

In any analysis of results please look at the impacts of chance and randomness. It may have been the right decision (90% chance of success) but ran up against the randomness and dynamic nature of things (see my earlier article on randomness and luck at http://wp.me/pZqFA-3g ). A good decision process does not mean perfect results but a much more robust chance of securing the right decision.

For a further article on Mauboussin’s work see http://www.michaelmauboussin.com/pdfs/SmartPeople-DumbDecisions.pdf