Examples and Tips
Below are scenarios to illustrate how good questions or comments can help improve thinking and decision making.
- Example 1
- Example 2
- Example 3
- Example 4
- Example 5
Example of Flawed Thinking
Kylie provides a list of possible new suppliers that only includes large, national companies.
Helpful Questions/Comments
- I noticed all recommended vendors are large, national companies. Is this intentional?
- What disadvantages of smaller vendors are you trying to avoid?
- Maybe we should reach out to others in Koch to see their experience with smaller suppliers for these materials.
Example of Flawed Thinking
To improve sales effectiveness, Dimetry suggests sending a survey to customers who recently renewed contracts.
Helpful Questions/Comments
- I’m concerned we won’t learn how to improve if we only talk to customers who are already happy with our products and services.
- What might we learn if you talked to customers who didn’t renew with us?
Example of Flawed Thinking
Natalie says, “That alternative would be expensive because it requires hiring contractors. Let’s just use in-house people.”
Helpful Questions/Comments
- Do we have the capability to do this well?
- What would the opportunity cost of using employees’ time on this?
- The financial costs seem higher for this alternative, but we haven’t yet considered its benefits or opportunity cost.
- Maybe we should brainstorm other alternatives.
Example of Flawed Thinking
While discussing project timelines, Hans says, “We did something like this in 2015 and it only took about two months.” The entire team starts acting like “two months” is settled.
Helpful Questions/Comments
- What has changed since 2015 that could affect the two-month estimate?
- Are we sure that’s reasonable for the current situation and team?
- If I recall, we did it in two months, but we didn’t have the project load we have now.
Example of Flawed Thinking
While deciding who to hire for an open position, someone says “Bari is a great candidate, she’ll fit right in on this team.”
Helpful Questions/Comments
- I think we should be careful to avoid hiring someone simply because they’re like us.
- Instead of talking about “fit,” let’s talk about how each candidate might be additive to the team.
- What’s the downside of hiring someone who is so similar to others on the team?
What Can You Do?
It’s human nature to fall into decision traps – they happen simply because of how our brains work. Good economic thinking, critical thinking and challenge can help us identify and avoid flawed thinking. Going forward, focus on asking good questions and seeking people who can ask you good questions to improve your thinking. Here are some general questions that can apply to many situations:
- What are we missing?
- Are we getting too attached to an idea too soon or to what we’ve done in the past?
- What are some other alternatives?
- What would someone who disagrees with this approach say?
- What assumptions are we making?
Below is a list of common decision traps. It’s not important that you memorize or know the names of each decision trap. Instead, it’s important to help one another recognize and avoid flawed thinking.
Common Decision Traps and Cognitive Biases
The following are some well-known cognitive traps. They are not specific to Koch or Principle Based Management, instead they are handful of many well-researched human tendencies. If you want to know more, you can find additional information about these and other decision traps online.
| Anchoring Trap | Allowing irrelevant information or first thoughts to unduly influence decision making. |
|---|---|
| Status Quo Trap | Biasing decisions in favor of what we do today. |
| Framing Trap | Allowing the way a question is asked or worded to influence our conclusion. |
| Overconfidence Trap | Believing we are better at making predictions and estimates than we actually are—often considering too narrow a range of possibilities. It can also include blindly relying on an expert’s opinion. |
| Confirmation Bias | Seeking out information that supports our existing point of view or avoiding information that may contradict it. |
| Recallability Trap | Being overly influenced by dramatic, memorable, or recent events. |
| Sunk Cost Trap | Making choices based on or that justify our past decisions. |
| Negativity Bias | Fixating on costs and disadvantages rather than bringing costs and benefits together to evaluate alternatives. |