As I was watching my daughter play soccer recently, it occurred to me that to play at the Division 1 college level, she had to be extremely skilled and well-drilled on the fundamentals of her game. In fact, she has spent most of her young life performing drills to perfect her skills so that, when necessary, she could execute them without thought. This got me thinking about how we, as business professionals, go about perfecting our skills. One of the most crucial that many of us probably take for granted is one we execute hundreds of times a day—making critical decisions. Why is decision making so important, and if we do it so frequently, why is it that sometimes we are so rotten at it? I believe the answer lies in the frequency of which we make decisions. So many of our simple, mundane, everyday decisions—such as what to eat at meal time, where to park, when to leave work, etc.—are so successful (and no-brainer) that we become complacent about our abilities to make good decisions. Put it this way, if a baseball player batted .900, he would have every right to believe himself an excellent hitter, and it stands to reason that he probably wouldn’t spend much time fine-tuning this aspect of his game. Decision makers are a lot like this, except unlike baseball where a hit is a hit, not all decisions are weighted equally—or lightly. Although you might make great decisions 90 percent of the time, can you afford to be wrong when it really counts? Deciding whether to turn off a light when you leave the room isn’t quite as important as determining whether or not to take a job in a new city or weighing buying versus renting. This is where the fallacy of general successful decision making fails us. Just because we can successfully make simple decisions does not ensure that we will make good complex decisions under pressure. Most of us rely too heavily on gut instincts or other heuristics to guide us when facts are missing or when we haven’t done our homework. Sometimes this works, and sometimes it doesn’t. However, when making a critical decision, one can’t rely on “sometimes” as a success predictor. Critical decision making should be viewed as a process that demands the same type of training an athlete would make to be successful in his or her trade. You must understand the cognitive biases and pitfalls that are abundantly obvious to anyone not deeply involved in the decision, and then adapt for these shortcomings. You must train yourself to recognize them and use techniques to overcome them if you want to enhance your chances of a positive outcome based on your final decision. Some of these biases, such as overconfidence, are easy to recognize and mitigate. But what about others, such as the sunk-cost affect that suggests that we are too far into or too invested in a process to make a decision that would deeply impact it? What is that point of no return, and how do we plan for it? As you can see from this one example alone, going into decision making without considering the process for making the decision is handicapping your chances of a good outcome. Group decision making comes with its own set of challenges. We know that the adage, “two heads are better than one,” generally holds true, but why is it that well qualified groups sometimes experience process losses and fail to achieve success or don’t meet their potential? On the other hand, how is it that a group of non-experts—such as the audience in “Who Wants to be a Millionaire”—answers correctly 91 percent of the time? We know that group dynamics play an extremely important role in formulating the correct blend of personalities and knowledge that achieve success. But why is that and how do we set up the group to obtain its maximum value? Just like personal decisions, group decisions must be seen as a process with a beginning, middle and end and also with clearly defined goals. Groups should be diverse and comprised of individuals who possess unique value sets. They should be decentralized so that one person can’t dominate or sway the group in any biased direction based on compelling emotional argument. There should be a predetermined way of aggregating and sharing information that doesn’t inhibit individual participation. And most importantly, groups should be formed outside the atmosphere or pressure that surrounds the decision or workplace so that individuals feel free to think independently without fear of reprimand or punishment. We can use the “Who Wants to be a Millionaire” success rate as a prime example of what can be achieved when groups are set up by independent, freethinking members, who don’t have the pressure of getting it wrong and failing to inhibit their decision process. The home medical industry is undergoing very real and complex changes. There are billing and qualification challenges from payer sources, as well as intense competition as the traditional wells of Medicare reimbursement dry up and more players are going after the same dollar. Providers are all looking to bring in more revenue, whether it be from retail products, referral sources or even mergers and acquisitions. The question each of us must be prepared to ask ourselves is, “Am I educated and ready to make the tough decisions about my business that are demanded in such volatile times?” Shooting from the hip is a sure way to get knocked from the saddle and out of the game. Understanding the process of decision making is the first step in ensuring that you make good decisions under pressure.
