The speed and depth of change has never been greater than it is now. From March 2020 to today, we have experienced significant disruptions in every aspect of our lives. Seismic shifts in the workplace and workforce are still underway. Radical changes in human behavior are taking place as people continue to adapt to this new world. This complexity is compounded with major supply chain and labor problems and inflation skyrocketing for the first time in decades.
At the helm of thousands of companies trying to navigate all of this disruption is the CEO. CEOs are in the business of making decisions, and never before has the role of CEO been more difficult. CEOs are faced with making so many types of decisions they’ve never had to make before. Moreover, the pace of change is requiring them to do so at faster and faster speeds.
In the midst of so much uncertainty, what can leaders do to make better decisions in the compressed timeline that is now required?
Compressed Versus Optimized Decision Making
Compressed decision-making occurs when the speed of change forces immediate decisions without sufficient time or experience to think them completely through. Conversely, optimized decision-making happens when trusted perspectives, data, best practices, experience, training and knowledge can be incorporated into the process. This forms our judgment, which is then validated by our instincts.
Here’s the challenge: No one has previous experience with today’s altered markets, changing workplaces and dynamic economy. As a result, we default to our instincts, which tell us how we feel or want to feel about a decision. The problem with instinct-led decision-making is that we are all humans with biases. Our biases naturally influence, and can harm, our decision-making.
Compressed decision-making in a world of accelerated disruption means CEOs must understand and maintain awareness of their personal biases.
According to Dr. Gleb Tsipursky, best-selling author and consultant focused on helping leaders avoid dangerous judgment errors known as cognitive biases, there are five primary cognitive biases that CEOs tend to exhibit.
Status quo bias.Status quo bias is a desire to maintain or return to the old ways of doing things. Leaders with this bias struggle to accept the disruption caused by the pandemic and want to go back to the way the world was before. This is one of the main reasons why leaders want everyone to return to the office.
Anchoring bias. This mental blind spot causes leaders to feel anchored to initial experiences and information. CEOs who have spent their career surrounded by other people feel anchored to that mode of collaboration. They struggle to break away from it even as the world around them changes and produces new challenges and opportunities.
Confirmation bias. Our minds are skilled at ignoring information that contradicts our beliefs and looking for information that confirms them. This often plays out when CEOs refuse to do anonymous employee surveys, citing they know how most employees feel about a certain topic.
False consensus effect. This mental blind spot leads CEOs to believe that people in their in-group — such as their employees — share their beliefs and values much more than they actually do. Many leaders are shocked when, after surveying their employees, they find that most of their workforce feels differently about a topic than they do.
Functional fixedness. When we perceive how an object should be used, or how people should behave, we ignore other ways of using an object or behaving. That’s even if these new uses and behaviors offer a much better fit for a changed situation and would solve problems more effectively.
Once leaders understand their own biases, they can work on actively avoiding them. In essence, they can start to think differently about the way they make decisions.
Be Conscious of Your Subconscious
To avoid dangers that bias can cause in decision-making, leaders must be conscious of their subconscious. They need to be aware of factors that are influencing their decisions based on how they want to feel – and look out for feelings that lean towards the right personal decision but may not be the best decision for the business.
Get Comfortable with Being Uncomfortable
We’re only now beginning to appreciate the rate of change we have experienced – how radically life accelerated and how digitally empowered we all became in a short period of time. And we should not anticipate that change is going to slow down. Leaders must get comfortable with being uncomfortable. Learning to make better decisions in the midst of discomfort and disruption is the only way forward.