decision making pocket skills guide

Decision MakingPocket Skills Guide

2©Rothwell Douglas Ltd. 2016

Contradictory to the beliefs of traditional economists, we as humans are pretty

irrational in our decision making.90% of our thought processes are automatic

meaning only 10% of our decisions rationally thought

through


How and why do we make irrational decisions?

1. Mental Shortcuts (Heuristics)- mental rules and associations learnt to make decision making quick and efficient

2. Bounded Rationality- limitations in time and information available to make decision e.g. alternatives and consequences

3. Limited Capacity- too much information can cause cognitive overload and prevent us from making a decision effectively

4. Loss and Risk Aversion- humans tend to take the ‘safe option’ when making a decision even if it isn’t the best

5. Cognitive Biases- we base decisions on irrational assessments i.e. the more expensive it is, the better it is- this isn’t always true!


How can you improve your

decision making?


Gather as much relevant information as you can


Set a timescale and don’t procrastinate


Don’t let your ego get in the way


Think of your future (not instant gratification)


Don’t be afraid to take risks

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©Rothwell Douglas Ltd. 2016

Once you understand how we make decisions, you can find ways to influence others’ decision making. This can include gaining buy in on an idea from your

team.

Here’s our top 3 tips…

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Use your words wisely!

Research has shown that ‘framing’ the way you present options and ideas can hugely influence peoples’ judgements.

When presenting options, always emphasise the benefits and frame the desired option in a positive way.

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Make familiar associations

People are more inclined to make predictions based on what’s happened before.

Linking new ideas to previous ideas that have been successful will create positive associations.

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Don’t overload!

When presented with too much information we struggle to process it all (cognitive overload). The same applies with too many options

to consider.

When presenting information and options, keep it simple and only use relevant and useful information.

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Want to know more?

We have a 3-part blog series on decision making- check it out!

www.rothwelldouglas.com/blog/

http://www.rothwelldouglas.com/blog/

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