Strategic Thinking & Strategic Action

Trump trap: Action-oriented bias

The first in series on mental traps and biases
that lead Donald Trump – and us – astray

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A debate has raged among psychiatrists about whether it is ethically proper to diagnose Donald Trump without directly engaging with him as a patient, whether he indeed displays symptoms of mental illness, and, if so, whether these symptoms should be cause for advocating his removal from office.

Sidestepping this critical debate, from the lens of social science and economics we can easily see that Donald Trump is a poster child for mental traps and biases that get in the way of strategic thinking and rational decision making. While Trump has made millions of dollars, attained celebrity status and won the U.S. presidency either in spite of or because of his decisions and behavior, we can make the case that the mental traps and biases he continues to exhibit are leading to bad outcomes for him and for us.

And, by examining the traps and biases that Trump seems to display, we can see where we, as fellow humans, are likewise affected, albeit most often less dramatically, by these very same mental traps and biases.

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THE EVIDENCE FROM TRUMP

Let’s begin our series of posts on mental traps and biases that Donald Trump appears to exhibit by observing that Trump and Republicans in Congress continue to have a blind desire to repeal Obamacare without a comprehensive, workable replacement. Trump continues to pursue building a wall on the Mexican border despite clear analysis that shows a wall will not substantially affect illegal immigration.¹ His impulsive action to fire FBI Director James Comey has led to Special Counsel Robert Mueller’s investigation that is haunting the Trump White House.

Trump’s biographer Tony Schwartz writes, “Trump can devolve into survival mode on a moment’s notice. Look no further than the thousands of tweets he has written attacking his perceived enemies over the past year. In neurochemical terms, when he feels threatened or thwarted, Trump moves into a fight-or-flight state. His amygdala is triggered, his hypothalamic-pituitary-adrenal axis activates, and his prefrontal cortex — the part of the brain that makes us capable of rationality and reflection — shuts down. He reacts rather than reflects, and damn the consequences. This is what makes his access to the nuclear codes so dangerous and frightening."²

THE TRAP

Action-oriented bias (also known as action bias or intervention bias)

"Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in public and private life, have been the consequences of action without thought." — Bernard Baruch

Definition: Action-oriented bias inclines us to act without considering all the potential ramifications of our action. We tend to overestimate the odds of positive outcomes and our ability to produce desired outcomes. We underestimate the odds of negative outcomes and take too much credit for past successes. This bias arises when we feel pressured to act.

How it works: Researchers Anthony Pattu and Richard Zeckahuser write, “One potential source of action bias is that nature may have equipped us with a desire to do something, a desire that is usually beneficial but sometimes clouds decision making. Recognition of adrenaline charges and fight or flight responses, perhaps even the fact that humans get readily bored and hence seek stimulation through new activities, suggest such possibilities. A second potential source is that individuals develop general tendencies toward action as a decision heuristic, but also carry the penchant over to inappropriate circumstances.”³

Why it’s a problem: Action-oriented bias results in non-rational decisions that “are at variance with traditional, economically based normative policy analyses that rely on such techniques as cost-benefit analysis."⁴ Beyond the realm of economics, this bias leads to non-rational decisions and actions, as well. For example, it is pervasive in medicine. 

Andrew J. Foy, M.D., explains, "Intervention bias is an unrecognized problem that affects medical decision making. I use the term to describe the bias on the part of physicians and the medical community to intervene whether it is with drugs, diagnostic tests, procedural interventions, or surgeries when not intervening would be an acceptable choice. I have established a series of conditional arguments to support the existence of intervention bias in medical decision making. If intervention bias exists, then: 1. Physicians, when presented with the option to intervene or not, when not intervening is an acceptable choice, more often choose intervention. 2. Physicians will adopt interventions without rigorous experimentation. 3. Interventions will persist after their benefit has been disproven. 4. Physicians and medical scientists acting as investigators, manuscript reviewers, and journal editors will be more likely to submit or accept manuscripts for publication that have positive findings related to intervention and to ignore or reject negative studies. Proof exists for all of these conditions; therefore, intervention bias exists in medical decision making."⁵

Examples:

Goalkeepers jump when they shouldn't. Soccer goalkeepers need to choose their response to a penalty kick before they clearly know the direction of the kick. Two analyses, one of 286 penalty kicks in top leagues and championships worldwide and the second of 32 professional goalkeepers, show that while the optimal strategy is to stay in the goal's center, goalkeepers almost always jump right or left.

The research team offers insight on goalkeepers' penalty kick behavior: "Because the norm is to jump, norm theory implies that a goal scored yields worse feelings for the goalkeeper following inaction (staying in the center) than following action (jumping), leading to a bias for action....The seemingly biased decision making is particularly striking since the goalkeepers have huge incentives to make correct decisions, and it is a decision they encounter frequently."^6,7

Active trading risks worse results. When investing, taking action whenever things change can be a high-risk approach, as research comparing the gains made in active versus passive investing makes clear.⁸ 

A famous study by Nobel Prize winner Eugene Fama at the University of Chicago and Ken French at Dartmouth College shows that returns from actively trading shares can easily be out weighed by trading costs: "Luck versus Skill in the Cross-Section of Mutual Fund Returns" shows that when fees are included, active managers' performance is no better than chance and that "we expect that a portfolio of low cost index funds will perform about as well as a portfolio of the top three percentiles of past active winners, and better than the rest of the active fund universe."⁹ 

Finance professional Jim Cahn assessed the active-versus-passive investing results thusly: "There are some active managers that beat the market, but no more than would be predicted if you had a bunch of random stock picking machines. Putting it another way, if you had 50,000 people flip a coin 10 times, odds are a few would end up with heads 10 times in a row, but that doesn’t mean they are skilled, or that heads is more likely than tails on their next flip."¹⁰

Insert a pulmonary artery catheter! (But is it effective? Is it harmful?) The pulmonary artery catheter (PAC,also known as the Swan-Ganz or right heart catheter) was introduced in 1970. According to Andrew J. Foy, M.D., "No significant testing was performed to establish its clinical effectiveness prior to its widespread implementation."¹¹ Today, While PAC usage has declined in recent years, PAC usage continues in cardiac ICUs.¹²  Foy asserts, "No evidence exists to support this practice, and it may be harmful." Complications can be life-threatening, including arrhythmias, aneurysm formation, rupture of the pulmonary artery, thrombosis, infection, pneumothorax and bleeding.

Foy cites large studies of the use of PACs with myocardial infarctions and concludes, "After adjusting for risk factors, all three found that PAC use was associated with increased mortality rates except in those cases complicated by cardiogenic shock, where it was associated with no difference." Looking at more studies of PAC use, he observes, "There is no evidence from the published literature that PAC monitoring improves outcomes, and it may cause harm."

We have no clue, but that won't stop us. A research study involving primary care physicians also shows the bias for action.¹³ The physicians were given clinical vignettes describing patients who had unusual complaints, no clear diagnosis, and no apparent need for urgent care. They were asked to provide the most likely diagnosis for each case, rate their level of confidence in that diagnosis, provide a management strategy for each case and give their level of confidence in the chosen approach.

"Physicians proposed, on average, 22 diagnoses for each case. Most indicated that they would choose action (testing, consulting, sending the patient to the emergency department, or prescribing) rather than follow-up only (87% vs 13%)." The study authors conclude, "Uncertain diagnosis is a regular challenge for primary care physicians. In such cases, we found that physicians prefer a workup to follow-up, an inclination consistent with 'action bias.'"

Abrupt change of plans. Just three days after the first explosion at Japan’s Fukushima nuclear plant in 2011, German Chancellor Angela Merkel announced she "was planning to shut down the country’s oldest nuclear plants and bid farewell to a technology she had vowed was critical just six months earlier."¹⁴ Roughly half of the nuclear plants were switched off immediately and the German government pledged to close the rest by the end of 2022.

Not surprisingly, the three German utilities with nuclear power plants saw this abrupt action as "a form of expropriation." and subsequently claimed "the accelerated nuclear phase-out resulted in total damages to them of about 19 billion euros."¹⁵ In December 2016, Germany's Constitutional Court ruled that the companies were entitled to "'appropriate compensation' for the government's decision to rush the shutdown of their nuclear reactors."

So what if the odds are tiny? Terrorism threats drive action, even when risks are very low. An example cited by Cass R. Sunstein of Harvard Law School and Richard Zeckhauser of Harvard's John F. Kennedy School of Government is the anthrax scare of October 2001.

They wrote that it "grew out of exceedingly few incidents... Only four people died of the infection; only about a dozen others fell ill. The probability of being infected was exceedingly low. Nonetheless, anxiety proliferated; people focused their attention on the outcome rather than the extremely low probability of the harm. The government responded accordingly, investing significant resources in ensuring against anthrax infections. Private institutions reacted the same way, asking people to take extraordinary care in opening the mail even though the statistical risks were tiny."¹⁶

Evidence is hard to come by, so let's just act. Summing up their research on environmental interventions, Paul J. Ferraro of Johns Hopkins University and Subhrendu K. PattanayakIn of Duke University write that for "most environmental projects, knowledge of the effectiveness of interventions that will be taken on the ground is rather weak."¹⁷ They explain, "Our understanding of the way in which policies can prevent species loss and ecosystem degradation rests primarily on case-study narratives from field initiatives that are not designed to answer the question 'Does the intervention work better than no intervention at all?' As a result, taking action may be evaluated more positively than collecting additional information, partly because of a lack of evidence that actions would be ineffective."

Further evidence of action bias in the environmental realm comes from researchers in Australia who have studied why environmental managers are prone to act: They surmise that those responsible "may feel that they will earn credit from their superiors,the general public, and the media if they take action even when it is not justified or should be of relatively low priority."¹⁸ 

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This series relies on some of the research conducted for my upcoming book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better.. It will be an antidote for bad decision individual and organizational decision making. You can help me get it published and in the hands of decision makers whose decisions not only affect their lives but all of ours.

Learn more about Big Decisions: Why we make decisions that matter so poorly. How we can make them better and my special half-price pre-publication offer. Thank you!

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References

1. David Bier, "Why the Wall Won't Work: The legal, practical, economic, and moral case against Trump's border barrier," Reason.com, May 2017  http://reason.com/archives/2017/03/31/why-the-wall-wont-work
2. Tony Schwartz, "I wrote ‘The Art of the Deal’ with Trump. His self-sabotage is rooted in his past," The Washington Post, May 16, 2017. https://www.washingtonpost.com/posteverything/wp/2017/05/16/i-wrote-the-art-of-the-deal-with-trump-his-self-sabotage-is-rooted-in-his-past/?utm_term=.ebc10630ffbe
3. Anthony Pattu and Richard Zeckahuser, "Action Bias and Environmental Decisions," Journal of Risk and Uncertainty, 21:1; 45-72, 2000. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.454.9418&rep=rep1&type=pdf
4. Pattu and Zechahuser,  "Action Bias and Environmental Decisions," Journal of Risk and Uncertainty.
5. Andrew J. Foy, "Don’t Just Do Something, Stand There! Intervention Bias in Medical Decision Making," Journal of American Physicians and Surgeons, Volume 18, Number 1, Spring 2013. http://www.jpands.org/vol18no1/foy.pdf
6. Daniel Kahneman and Dale T. Miller, "Norm theory: Comparing reality to its alternatives," Psychological Review, 93, 136–153. http://psycnet.apa.org/record/1986-21899-001
7. Michael Bar-Eli, Ofer H. Azara, Ilana Ritov, Yael Keidar-Levina and Galit Schein, "Action bias among elite soccer goalkeepers: The case of penalty kicks," Journal of Economic Psychology, Volume 28, Issue 5, October 2007, Pages 606-621.  http://www.sciencedirect.com/science/article/pii/S0167487006001048
8. "What is action bias?" Ezonomics, July 21, 2016. https://www.ezonomics.com/whatis/action-bias/ 
9. Eugene F. Fama and Kenneth R. French, "Luck versus Skill in the Cross-Section of Mutual Fund Returns," The Journal of Finance, Vol. LXV, No. 5, October 2010 http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.479.3099&rep=rep1&type=pdf
10. Jim Cahn, "Active Versus Passive Investing: Are These Really The Only Two Options?" Forbes, April 22, 2015. https://www.forbes.com/sites/jamescahn/2015/04/22/active-versus-passive-investing-are-these-really-the-only-two-options/#3c982dd92be8
11. Foy, "Don’t Just Do Something, Stand There! Intervention Bias in Medical Decision Making," Journal of American Physicians and Surgeons.
12. Kevin Ikuta; Yun Wang, Austin Robinson,  et al, "National Trends in Use and Outcomes of Pulmonary Artery Catheters Among Medicare Beneficiaries, 1999-2013," JAMA Cardiology 2017;2(8):908-913. https://jamanetwork.com/journals/jamacardiology/article-abstract/2630977
13. A. Kiderman, U. Ilan, I. Gur, T. Bdolah-Abram, and M. Brezis, "Unexplained complaints in primary care: evidence of action bias, Journal of Family Practice, 2013 Aug;62(8):408-13.  https://www.ncbi.nlm.nih.gov/pubmed/24143333
14. Christoph Steitz and Caroline Copley, "Exit now, pay later: Germany's rushed farewell to nuclear power," Reuters, November 15, 2015. https://www.reuters.com/article/us-germany-nuclear/exit-now-pay-later-germanys-rushed-farewell-to-nuclear-power-idUSKCN0SQ1G520151101
15. "German utilities win compensation for nuclear phaseout," Deutsche Welle, December 5, 2016. http://www.dw.com/en/german-utilities-win-compensation-for-nuclear-phaseout/a-36639314
16. Cass R. Sunstein and Richard Zeckhauser, "Overreaction to Fearsome Risks," Faculty Research Working Papers Series, John F. Kennedy School of Government - Harvard University, December 2008, RWP08-079. https://research.hks.harvard.edu/publications/getFile.aspx?Id=330
17. Md Sayed Iftekhar and David J Pannell, “'Biases' in Adaptive Natural Resource Management," Conservation Letters, Volume 8, Issue 6, July 6, 2015. http://onlinelibrary.wiley.com/doi/10.1111/conl.12189/pdf
18. Paul J. Ferraro and Subhrendu K. Pattanayak, "Money for Nothing? A Call for Empirical Evaluation of Biodiversity Conservation Investments," PLoS Biol4(4): e105. https://doi.org/10.1371/journal.pbio.0040105

Why not plan to be great, like Elon Musk?

Elon Musk has just announced plans for SpaceX to build a huge reusable rocket (BFR) that he and his firm believe will enable a permanent self-sustaining human presence on Mars in five years. (Watch the stirring YouTube video of SpaceX's CEO and Lead Designer announcing the company's audacious plan at the meeting at the International Astronautical Congress on September 29.)

This is not a "pie in the sky" prediction. Musk and his team have seized the vision of inexpensive space travel and settlements on other planetary bodies and have created an incredibly detailed and seemingly realistic plan building on the firm's accomplishments and knowledge for achieving the vision.

Musk and SpaceX, as well as his other ventures including Tesla, stick out as spectacular examples of dreaming big and then making a challenging but potentially achievable plan and going for it.

But just how prevalent are leaders and organizations who formulate a big vision of future success and then formulate strategies and execute a solid plan to achieve the vision? Are Musk, SpaceX and Tesla really outliers?

Even accounting for a less audacious vision, to what extent do leaders and organizations use the vision-strategies-plan-execution paradigm that seems to be carrying SpaceX and Tesla to such monumental achievements?

Let's celebrate those who get it

"It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something." - Franklin D. Roosevelt

We can give half of all organizations points for at least trying to achieve a vision of greater future success by developing and implementing winning strategies and a plan to go after the vision.

It's good news that strategic planning is the number two most used business tool globally. In the U.S., 50% of organizations use it, according to Bain & Company’s latest survey of executives. Strategic planning has scored at or near the top of the most used management tools list for years. (See Bain & Company Management Tools & Trends 2015.)

Here's some more good news. 58% of leaders say strategic planning is extremely or very important in their organization’s success. That’s according to our 2013 Strategic Leader Survey involving organizational leaders in decision-making roles, which tracked closely with the results of an earlier survey we conducted and with a McKinsey & Company survey. (All of our Strategic Leader survey reports, including our latest on strategic decision making, are available for free download at www.forrestconsult.com).

Reality

But, unfortunately, the reality is not nearly as good as it might seem. Unlike SpaceX and Tesla, organizations of all types are not living up to their potential.

Our finding that 58% of organizational leaders say strategic planning is extremely or very important in their organization’s success means that four of every ten organizational leaders say strategic planning has little or no importance in the success of their organization.

If, according to Bain, 50% of organizations don't use strategic planning, it's no surprise that those organizations can't attribute whatever success they are having to intentional strategy development and execution.

That's a shame, because the evidence is clear that developing and implementing a strategic plan is the path to greater success.

 
The big "fail"

“Most people don't have a plan. That's why it's easy to beat most folks.” - Paul "Bear" Bryant

Unlike Elon Musk, many leaders don’t get it.

It’s a failure of leadership, a critical lack of understanding, what King George III demonstrated when England lost the American colonies under his reign.

Our finding that 42% of leaders say strategic planning is unimportant for success is only part of the problem. The woeful reality is that in a majority of organizations, like Britain during the American Revolution, the top leader or just a small group are making the strategic decisions.

Our 2016 Strategic Leader Survey revealed that organizations most frequently make strategic decisions without the leader obtaining consensus: In 66% of organizations the leader typically makes the strategic decisions.

Here's the problem with leader-centered decision making, as opposed to using the power of the team and insight from the wider group of stakeholders in the decision-making and planning process: Leaders tend to have biases:

• Inability to self assess, overstating their abilities, competencies and characteristics.
• Illusory superiority, overestimating their desirable qualities and underestimating their undesirable qualities, thinking they can make better choices than others.
• Illusion of control, overestimating their influence on events and mistakenly thinking their actions will be effective.
• Power, a sense of control that produces overconfidence in their ability to make good decisions and to overestimate what they think they know, potentially leading to excessive risk-taking.
• Self-serving bias, evaluating ambiguous information in a way more beneficial to their interests than to the organization.

Evidence suggests that strategy developed through consensus decision making produces better organizational outcomes than that developed through leader-centered decision making. Our research shows that that organizations rated excellent or good are a third more likely to commonly use consensus decision making for strategic decisions rather than leader-centered decision making.

Nothing happens without execution

"The greatest strategy is doomed if it’s implemented badly." – Bernard Reimann

Even when organizations create a strategic plan, there is failure. According to the Balanced Scorecard Collective, more than 70% of organizations with a plan fail to implement it. For these organizations, planning is an exercise, not a core process. (Please note that even Bain & Company calls strategic planning a tool, not a process. I think that’s a disservice.)

The Balanced Scorecard Collective also reports that 60% of organizations don’t link strategy and budgeting. Hand in hand with implementation issues, a disconnect between strategy and resource allocation often exists. Resources are not focused on implementation.

The answer

“By failing to prepare, you are preparing to fail.” - Benjamin Franklin

The bleak picture of the use of strategic planning painted by the data presented above calls for an answer. The response could be, "Who cares?"

If strategic planning coupled with effective implementation were not such a powerful process for driving greater success, one might say "So what?" to the news that many organizations don't plan or implement.

Yet, way beyond the sample of one offered by SpaceX, extensive, repeated, solid research shows that organizations that plan and implement well do better.

Here's the proof

A while back, I uncovered a scholarly analysis I had not seen referenced elsewhere, conducted by a Danish researcher, published in 2010. It's a "meta-analysis" of 45 years of research involving 88 studies of the impact of strategic planning involving 32,472 organizations. The study concludes definitely that strategic planning improves performance, both in quantitative and qualitative terms.

The research was conducted by Anders McIlquham-Schmidt, now at Copenhagen Business School in Denmark. His published work has the imposing title, "A meta-analytical review of the relationship between strategic planning and corporate performance." You can read it yourself at http://www.hha.dk/man/cmsdocs/WP/2010/2010_01.pdf.

For the data geeks in the crowd, here are the correlation coefficients. For the normal people, what you need to know is that the greater the positive number (with 1.00 being the maximum possible), the greater the favorable relationship that shows that conducting strategic planning produces the resulting performance measure.

In McIlquham-Schmidt's analysis, qualitative performance measures (non-data geeks, that means measurable stuff), had very high correlation coefficients, r. To be specific, the analysis shows high positive correlations between planning and key quantitative measures of performance, from earnings per share to return on net worth, as follows:

• Earnings per common share +0.79
• Return on invested capital +0.64
• Return on owner’s investment +0.58
• Change in return on invested capital +0.56
• Return on net worth +0.42

Impact is more than financial

“It is interesting to note that those businesses that perform at the highest levels usually have some sort of formalized strategic plan in place and have implemented it well. On the other hand, those businesses that struggle usually have no plan in place and seem to flounder in their attempts to be successful." - Chris Arringdale

Even better, from my perspective as a person educated in quantitative analysis but as much a "soft measures" person, the analysis also shows positive correlations between planning and performance for less tangible but very important qualitative measures, including attainment of the organization’s objectives. (Non-data geeks, here's an example of using a qualitative measure. When a supervisor is asked to evaluate an employee's attitude on a 1-5 scale, that's using a qualitative performance measure.)

• Attainment of profit objectives +0.51
• Community acceptance +0.48
• Service efficiency +0.47
• Attainment of corporate objectives +0.44

Even better outcomes from a quality process?

Let's note that this conclusive evidence about the efficacy of strategic planning does not even look at the the quality of the planning and implementation process that the organizations studied used.

I think we can surmise that the "better" planners and implementers were more likely to drive desired, positive results than those who indeed planned but planned and implemented poorly. Certainly some of the underlying studies considered in McIlquham-Schmidt's meta-analysis show this to be the case.

Debate settled?

"Planning is bringing the future into the present so that you can do something about it now." - Alan Lakein

Can we now agree that any past debate about the positive impact of strategic planning has been put to rest? Can we get on with making creation of an engaging vision of greater future success and engaging in smart and effective planning and implementation a core process in the organizations we care about?

I would hope so!

Why not envision your own version of SpaceX's "Mars settlement," your shared view of what great success can mean for your organization?

Why not focus your organization on creating and implementing strategies to get to that inspiring future vision?

Why not start now?

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Only rarely have I promoted my firm, Forrest Consulting, on this blog. The focus of Strategic Thinking & Strategic Action is thought leadership, not marketing. However, in this case I am compelled to offer up Forest Consulting as a solution, because we are uniquely equipped to help organizations find a stirring vision, "plan to be great" and execute their plan. Turn to us for:

Better strategy. Have us facilitate creation of your strategic plan for greater success. We will tailor our agile planning system to fit your organization's needs. We can obtain stakeholder input; develop an environmental scan and a SWOT analysis, facilitate the planning sessions to create the vision, strategies, action steps and more; and draft the plan report. Our experience and tools will help you drive successful implementation.

Better decisions. Use our counsel and facilitation skills to help your Board, team or group be more effective and reach goals. Our expertise and research uniquely equip us to help leaders make and execute great strategic decisions.

Better results. Ask us to help you craft and execute "best practice" approaches to tackling strategic issues and opportunities. Our value is enhanced by our broad strategy, management, marketing and communications experience.

Let's talk. Give me a shout any time you want to have a 15-minute conversation to explore how we can help your organization craft and execute great strategy for greater success.

Email leec@strategicbusinessleader.com
Cell 1-630-730-9619
Office 1-630-909-9360
LinkedIn www.linkedin.com/in/lee-crumbaugh-506266
Website: www.forrestconsult.com

Thank you!

Lee Crumbaugh, SMP

 

Thank you for our connection!

Twenty five years ago, before social media, British anthropologist Robin Dunbar found a correlation between primate brain size and average social group size. He theorized that humans can only maintain about 150 current stable relationships with other individuals. (Dunbar, 1992)

Today, in the age of social media, our close relationships are still limited, but most of us have what sociologist Mark Granovetter calls "weak ties" with  many, many more people. (Granovetter, 1973)

STRONG OR WEAK, OUR CONNECTIONS ARE IMPORTANT

Here's the thing: The people with whom we have weak ties can be just as important to us as those with whom we have strong ties. 

Granovetter writes, "More novel information flows to individuals through weak than through strong ties. Because our close friends tend to move in the same circles that we do, the information they receive overlaps considerably with what we already know. Acquaintances, by contrast, know people that we do not and, thus, receive more novel information. Moving in different circles from ours, they connect us to a wider world. They may therefore be better sources when we need to go beyond what our own group knows, as in finding a new job or obtaining a scarce service.” (Granovetter, 2005)

So, whether you are a close friend or an acquaintance, I value our connection. Thank you for being connected with me.

THANKING PEOPLE IS RIGHT...AND POWERFUL

A sincere "thank you," being grateful for the others in our life and what they mean to us, can go along way, both for the person we thank and for us.

Do you know that when people are thanked, they tend to take more actions to help others because they feel socially valued? (Grant & Gino, 2010)

Does it surprise you that people who are more grateful have access to a wider social network, more friends, and better relationships, on average? (Amin, 2014)

Research shows that whether being grateful is a trait or is triggered by another person's kindness, gratitude is linked to increased "prosociality," 
which is behavior intended to benefit others? (Ma, Tunney & Ferguson, 2017)

BEING GRATEFUL IS INFECTIOUS

Here's good news: Your gratitude can infect the group. Gratitude can spread, through group emotional contagion, the transfer of moods among people in a group. In groups experiencing positive emotional contagion, members experience improved cooperation, decreased conflict and increased perceived task performance. (Barsade, 2002)

Cooperative behavior cascades in human social networks. Individuals are influenced by fellow group members’ contribution behavior in future interactions with other individuals who were not a party to the initial interaction. Further, this influence persists for multiple periods and spreads up to three degrees of separation - from person to person to person to person. And clusters of happiness can result from the spread of happiness in groups. (Fowler & Christakis, 2008)

The value of being connected grows when one's connections spread across different groups. People who connect across groups have information, timing and arbitrage advantages that make them more likely to detect and develop rewarding opportunities. These "network brokers" tend to be better compensated, more positively evaluated, more likely candidates for senior positions, and more recognized as leaders in their organization and industry. On average, they are 50% more successful than those who do not engage in brokering but just interact with individuals like themselves. (Burt, 2004)

IMPORTANT FOR PLANNING AND IMPLEMENTATION

The research on the value of connections and impact of gratitude not only has personal and professional implications, it has organizational implications.

Think about it: When we bring loosely connected stakeholders and even outsiders into the planning process for voices and thoughts beyond our own, we are enabling the group to provide new information and access to their networks.

Likewise, making sure those involved in the planning know they have our sincere gratitude for their involvement and contributions seeds improved cooperation, decreased conflict and potent performance gains, that is, greater commitment to and involvement in implementing the plan.

I am grateful for our connection and your interest in strategic thinking and strategic action!

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References

Amin, A. (2014)."The 31 Benefits of Gratitude You Didn’t Know About: How Gratitude Can Change Your Life." http://happierhuman.com/benefits-of-gratitude/

Barsade, S.G. (2002). "The Ripple Effect: Emotional Contagion and its Influence on Group Behavior." http://journals.sagepub.com/doi/abs/10.2307/3094912#

Burt, R.S. (2004). "Structural Holes and Good Ideas." American Journal of Sociology. 110 (2): 349–399. ISSN 0002-9602. doi:10.1086/421787

Dunbar, R. I. M. (1992). "Neocortex size as a constraint on group size in primates." Journal of Human Evolution. 22 (6): 469–493. doi:10.1016/0047-2484(92)90081-J.

Granovetter, M.S. (1973). "The Strength of Weak Ties" (PDF). Amer. J. of Sociology. 78 (6): 1360–80. JSTOR 2776392.

Granovetter, M.S. (2005). "The Impact of Social Structure on Economic Outcomes". Journal of Economic Perspectives. 19 (1): 33–50. doi:10.1257/0895330053147958.

Grant A.M. & Gino F.  (2010). "A little thanks goes a long way: Explaining why gratitude expressions motivate prosocial behavior." J Pers Soc Psychol. 2010 Jun;98(6):946-55. doi: 10.1037/a0017935.

Fowler, J.H. & Christakis, N.A. (2008). "Dynamic spread of happiness in a large social network: longitudinal analysis over 20 years in the Framingham Heart Study Research." http://www.bmj.com/content/337/bmj.a2338.

Ma, L. K., Tunney, R. J., & Ferguson, E. (2017). "Does gratitude enhance prosociality?: A meta-analytic review." Psychological Bulletin, 143(6), 601-635.
http://dx.doi.org/10.1037/bul0000103.

Case 12: Not missing the opportunity to lose billions

This post is the 12th in my series looking at cases where it seems that "believing we are right" has led to bad outcomes, sometimes even spectacularly bad results, for leaders, teams and organizations.

For my upcoming book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, I have identified and categorized nearly 350 mental traps and errors that lead us into making bad decisions. The many high-profile situations that I have examined demonstrate the bad outcomes that can be produced by mental traps and errors. My premise is that, at the least,if we recognize and admit that we don't know the answer, we will put more effort into looking for better decision options and limiting the risks stemming from failure when making important decisions.

Our next true story is a classic case of seeing what one wants to see and going with the herd, where everyone ignored mounting evidence right at hand that could have averted what for so many people was financial devastation.

FEELING THE BERN

Bernie Madoff's investors believed that his fund was rock-solid. He promised consistent annual returns of 10% to 12% and seemingly delivered on this promise for years.

HIs Ponzi scheme has cost more than 40,000 investors who believed in him $6 billion in principal, even after recovery of $11.5 billion in investor's funds.

• Decades of high returns from Madoff's funds conditioned investors to expect these exceptional returns, despite the easily discovered evidence that such a long string of strong earnings reports was extraordinarily unlikely. Madoff's investors were subject to  Optimism Bias (when making predictions, we tend to overestimate the likelihood of positive events and underestimate the likelihood of negative events, and to give more credence to news that reinforces our belief than news that undermines it).
• Investors flocked to Madoff because of the Social Proof Heuristic (the tendency for people in ambiguous situations to believe that a behavior is correct to the extent that other people with whom they associate are engaged in it.) Madoff had a long history of involvement in Jewish philanthropic activities and invested money for important Jewish institutions. These connections and his roster of wealthy Jewish clients led others within the Jewish community to invest with him because they assumed that Madoff must be trustworthy. Also, research by Li Huang and J. Keith Murnighan of Northwestern University suggests people were unconsciously attracted to trust Madoff when they should not have trusted him because his closest relatives and associates invested with him.  
• Madoff used exclusivity and elusivity to play to people's Regret Aversion (behavior being governed by a desire to avoid the pain associated with making poor decisions, in this case to avoid making errors of omission - not wanting feelings of remorse from missing out on an opportunity that others are enjoying). Madoff's investors chose to invest with him because they thought they would regret not taking the transient opportunity when it was open to them. He presented his fund as an exclusive opportunity to which the investors had be invited. He seldom recruited investors and presented the facade that he did not need their funds. He himself was elusive and rarely spoke with his investors. When he did, he said they were exceptionally smart for wanting to invest with him. Madoff knew that an opportunity appearing to be scarce, special or restricted takes on greater value. He understood that the pressure to "act now or this opportunity will disappear" caused investors to process the opportunity using shortcuts, simplification, and superficial analysis.

Ponzi schemes like Madoff's succeed for longer or shorter periods because they play on greed. "Wanting in" and our desire to "get the payoff" can lead us to suspend disbelief and place trust where, indeed, it is misplaced. 

Case 11: Getting bitten by not seeing it

This post is the 11th in my series looking at cases where it seems that "believing we are right" has led to bad outcomes, sometimes even spectacularly bad results, for leaders, teams and organizations.

For my upcoming book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, I have identified and categorized nearly 350 mental traps and errors that lead us into making bad decisions. The many high-profile situations that I have examined demonstrate the bad outcomes that can be produced by mental traps and errors. My premise is that, at the least, if we recognize and admit that we don't know the answer, we will put more effort into looking for better decision options and limiting the risks stemming from failure when making important decisions.

This case shows what can happen when mental traps and logic errors set up a leader to ignore mounting evidence countering common, long-held - and wrong - belief. The result was death and near derailment of a world-changing undertaking.

"BALDERDASH!"

Isthmian Canal Commission Chief Engineer John Walker believed when he took over the U.S. project to build the Panama Canal in 1904 that the theory that mosquitoes transmitted deadly Yellow Fever was "balderdash" and eliminating the mosquitoes was a waste of time, money, and manpower. Walker's belief rejected 50 years of evidence from medical research that the Aedes aegypti mosquito spread Yellow Fever. It ignored the "proof of concept" offered In 1901, when a yellow fever epidemic erupted in Havana: Dr. William Gorgas and his medical team eradicated the mosquito from Havana in eight months, halting the epidemic.  

In November of 1904, cases of yellow fever began to appear in the Panama Canal Zone. Panic spread: 200 staff members resigned over a two-week span and three-quarters of all Americans left. Ultimately, 246 people came down with Yellow Fever and 84 people died. President Theodore Roosevelt,realized that Walker and other Canal Commission members were a major obstacle to Dr. Gorgas's planned attack on mosquitoes in the Canal Zone, so he forced their resignation. The new leaders he appointed gave medical officer Dr. Gorgas the resources he needed to end the epidemic and ultimately rid the the Canal Zone of Aedes aegypti mosquitoes and the disease.

Why did Walker, a highly successful civil engineer who began his his career as Assistant Civil Engineer for the U.S. Engineering Corps, focusing on river and harbor work, and then became Chief Engineer and finally General Manager of the Illinois Central Railroad, reject the mounting scientific evidence that mosquitoes and not "bad air" spread the deadly disease?

• He had been conditioned by long-made claims to believe Yellow Fever appeared in areas where "miasma" (bad air) and fomites (airborne particles) were prevalent. This was an Illusory Correlation (perceiving a relationship between variables when no such relationship exists).
• His controlling personality led him into denying the evidence: He was a victim of the behavioral trap of Self Deception (when people deny or rationalize away the relevance, significance, or importance of opposing evidence and logical argument.to maintain a positive self image and the illusion of control over their lives).
• When Walker dismissed the evidence of the mosquito theory of transmission he made the logic error of an Appeal to Ignorance (assuming a conclusion or fact based primarily on lack of evidence to the contrary, the error of which is described by the statement, “absence of evidence is not evidence of absence").  

Walker's hard driving approach served him well when he was building railroads and ports. Yet, his charge to "get the canal built" encouraged his narrow "get 'er done" focus and amplified his desire to wave away all but the most apparent obstacles to success. What's important is often subtle and murky. When we are led to not look for what's less apparent, we can be led seriously astray.

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I expect to publish my new book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, later this year. It will be an antidote for bad decision individual and organizational decision making. You can help me get it published and in the hands of decision makers whose decisions not only affect their lives but all of ours.

Learn more about Big Decisions: Why we make decisions that matter so poorly. How we can make them better and my special half-price pre-publication offer. Thank you!

Case 10: When what worked didn't work

This post is the 10th in my series looking at cases where it seems that "believing we are right" has led to bad outcomes, sometimes even spectacularly bad results, for leaders, teams and organizations.

For my upcoming book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, I have identified and categorized nearly 350 mental traps and errors that lead us into making bad decisions. The many high-profile situations that I have examined demonstrate the bad outcomes that can be produced by mental traps and errors. My premise is that, at the least, if we recognize and admit that we don't know the answer, we will put more effort into looking for better decision options and limiting the risks stemming from failure when making important decisions.

In the case at hand, past success was not a guarantee or future results: Mental traps seemingly blinded our protagonist to differing circumstances.

"DID IT BEFORE, CAN DO IT AGAIN"

Yahoo CEO and former Google executive Marissa Mayer believed that she could turn around Yahoo when many others before her could not.

Starting in 2012, as Yahoo's seventh CEO in a little over five years, "Mayer put her resources in some of the wrong places, spent a lot of money, and didn't have a lot to show for it," according to analyst Jan Dawson as quoted by CNN Money. In a fire sale, in 2016 Verizon agreed to acquire Yahoo for $4.8 billion. This price was cut to $4.48 billion this year after Yahoo was hit by two massive security breaches involving a million users. When the transaction closed this past June, Mayer left the Board and management, albeit with a $23 million golden parachute. The Yahoo brand will continue to exist alongside AOL and Huffington Post as it it folded into digital media division of Verizon, now named Oath.

Whether turning around Yahoo was possible cannot be known. But what does seem evident is that mental traps made the task even more difficult for Mayer:

• Not surprisingly, Mayer applied the mentality and approach she had learned and used at Google to Yahoo, which was a very different organization in terms of mindset, focus and experience. Staying consistent with what worked at Google was a likely outcome of the Commitment Heuristic (the tendency to make decisions that are consistent with our prior beliefs, attitudes and actions, thus affirming their correctness).
• One the first 25 employees at Google, Mayer ran the company's flagship search division for many years. Then, according to the New York Times, "she lost a turf battle to a powerful engineer within Google and was quietly reassigned to oversee Google Maps and other so-called local products. Mayer tried to spin the move positively, but that became harder after Larry Page, one of the company’s founders, regained the role of C.E.O. and removed Mayer from the group of executives reporting to him." Did Mayer see Google's successes as more tied to her actions than they actually were and therefore take the Yahoo job to prove that Google erred in demoting her? Whether this was consciously her intent, the evidence suggests that Mayer was afflicted by Memory Bias (when recalled memories are altered so they differ from what actually happened and therefore bias predictions of future experiences based on these altered memories).
• According to the Los Angeles Times, in May last year, Yahoo valued its investment stake in China's Alibaba, a giant Google competitor, at $29.4 billion and its 35.5% stake in Yahoo Japan at $8.7 billion. Yahoo’s market capitalization that day was $34.7 billion. "In other words, the stock market valued everything other than those two holdings — that is, everything subject to Mayer’s management — at negative $3.4 billion." Yet, later in the year when Mayer wrote to employees about Yahoo's sale to Verizon, she "put lipstick on the pig" by using Reframing (changing how information is presented to elicit a different point of view). Rather than recognizing that the strategies that had been pursued under Mayer's leadership had not turned around the company, her letter cited the company's acquisition by Verizon as evidence of "the immense value we’ve created" and stated, "We set out to transform this company – and we’ve made incredible progress."

Meyer's story shows us just how extraordinarily difficult it is for us to "unlearn" what has made us successful when new circumstances demand a different approach. We are wired to stay on the path we know and adjust our perspective to keep us on that road, even when it leads us to a cliff edge. Yet, Meyer was in one sense exempted from having to jump off the cliff: Based on her personal financial gain, she succeeded wildly, leaving the now captive company with a fortune in hand.

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I expect to publish my new book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, later this year. It will be an antidote for bad decision individual and organizational decision making. You can help me get it published and in the hands of decision makers whose decisions not only affect their lives but all of ours.

Learn more about Big Decisions: Why we make decisions that matter so poorly. How we can make them better and my special half-price pre-publication offer. Thank you!

Photo licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license. Attribution: World Economic Forum, 2013.

Case 9: The climbers who perished by succeeding

This post is number nine in my series looking at cases where it seems that "believing we are right" has led to bad outcomes, sometimes even spectacularly bad results, for leaders, teams and organizations.

For my upcoming book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, I have identified and categorized nearly 350 mental traps and errors that lead us into making bad decisions. The many high-profile situations that I have examined demonstrate the bad outcomes that can be produced by mental traps and errors. My premise is that, at the least, if we recognize and admit that we don't know the answer, we will put more effort into looking for better decision options and limiting the risks stemming from failure when making important decisions.

In this case, mental traps led one of the world's best mountain climbers to ignore his pre-set rule, with tragic results.

"I KNOW BEST"

Mountain climbing guide Rob Hall believed that his expedition plan would get the Mount Everest climbers in his charge onto and down from the summit. He believed his hard rule that the team would turn around at 2 p.m. if they were not yet on top of the mountain would protect the climbers from disaster. He believed that allowing his climbers to express any dissenting views while the expedition made the final push would hurt their chances of success.

Nearly all the climbers on the summit push that day, including Hall and his team, kept climbing and arrived at the top after two o’clock. As a result, many climbers found themselves descending in darkness, well past midnight, as a ferocious blizzard enveloped the mountain. Five people died in this highly publicized 1996 disaster and many others barely escaped with their lives.

What might have led renowned guide Hall astray, beyond the judgment-skewing effects of high stress, and oxygen and sleep deprivation?

• Evidence suggests he saw the climb as a "now or never" opportunity for his charges. However, other climbers including filmmaker David Breashears and his team who were on the mountain at the same time got to the top and down in following days. This "all or nothing" thinking suggests that Hall was trapped by a False Dilemma (when the choice is presented as being between two options, when in fact one or more additional options exist).
• While Hall's climbing and leading experience are evidence that he should have known about the dangers of scaling Mt. Everest, clearly his planning did not account for the bad luck of leading less experienced climbing clients in a surprise storm of epic proportions. A big factor leading to the disaster was Hall and others Underestimating the Importance of Luck (we too often underestimate the importance of luck in the outcomes of our decisions, according to various studies).
• Hall's insistence that his decisions not be questioned on the ascent meant he heard no dissent - even when his guides and climbers had doubts and questions about the decision to continue climbing. This lack of feedback in essence freed Hall to continue the climb after his deadline. It perversely amplified the False Consensus Effect (seeing more consensus for our beliefs than is actually the case, leading us to not consider judgments different from ours). 

No doubt, evaluating multiple options and dealing with dissent can impede progress. But Hall's party encountered the worst of outcomes because options were not recognized and the judgment of others went unheard.

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I expect to publish my new book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, later this year. It will be an antidote for bad decision individual and organizational decision making. You can help me get it published and in the hands of decision makers whose decisions not only affect their lives but all of ours.

Learn more about Big Decisions: Why we make decisions that matter so poorly. How we can make them better and my special half-price pre-publication offer. Thank you!

Case 8: No accounting for over-confidence

This post is number eight in my series looking at cases where it seems that "believing we are right" has led to bad outcomes, sometimes even spectacularly bad results, for leaders, teams and organizations.

For my upcoming book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, I have identified and categorized nearly 350 mental traps and errors that lead us into making bad decisions. The many high-profile situations that I have examined demonstrate the bad outcomes that can be produced by mental traps and errors. My premise is that, at the least, if we recognize and admit that we don't know the answer, we will put more effort into looking for better decision options and limiting the risks stemming from failure when making important decisions.

In this case, we see that even a leader of a staid professional firm can be trapped by very human responses in exceptional moments.

"WHAT, ME WORRY?"

PricewaterhouseCoopers' partner and accountant Brian Cullinan believed that he and his associate were well prepared to properly dole out the envelopes with winners' names to presenters at the 2017 Oscars ceremony.

Cullinan made the biggest Oscar award mistake ever by handing presenter Warren Beatty the wrong envelope. Beatty's on-stage partner, Faye Dunaway, announced “La La Land” was the winner when “Moonlight” was actually the best picture winner. The upshot is that PwC's plum 83-year assignment as the Academy of Motion Picture Arts and Sciences’ accountant is in jeopardy and Cullinan's reputation is trashed.

The accounting firm partner was likely entrapped by many mental errors and biases, with these being among the most obvious:

• Cullinan was cocksure that the awards process would come off with out a glitch: People Magazine reports that he said before the Oscars broadcast, “We’ve done this a few times, and we prepare a lot.” His overconfidence was was surely rooted in his Illusion of Control (the tendency to overestimate how much we influence external events, leading to us take actions that we believe will be effective when they will not be).
• Tweeting from backstage a photo of Emma Stone holding her Best Actress Oscar, right before the winning picture announcement, rather than paying attention to his duties, showed Cullinan's Impulsivity (choosing an immediately gratifying option at the cost of long-term happiness). The self-destructive nature of this action is amplified by hearing the allegation that Cullinan had been told by the Motion Picture Academy not to use social media during the ceremony.
• Cullinan's belief that no mistake would mar PwC's handing of the Oscar winners' envelopes was surely in part a result of the Overconfidence Effect (individuals' tendency to overestimate their ability to predict future events).

Working for a big-name firm and having a big title does not protect one from biases and traps. Indeed, it can lead to overlooking evidence and both rash action and stultifying inaction.

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I expect to publish my new book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, later this year. It will be an antidote for bad decision individual and organizational decision making. You can help me get it published and in the hands of decision makers whose decisions not only affect their lives but all of ours.

Learn more about Big Decisions: Why we make decisions that matter so poorly. How we can make them better and my special half-price pre-publication offer. Thank you!

Case 7: Blind or incompetent? Perhaps both...

This post is number six in my series looking at cases where it seems that "believing we are right" has led to bad outcomes, sometimes even spectacularly bad results, for leaders, teams and organizations.

For my upcoming book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, I have identified and categorized nearly 350 mental traps and errors that lead us into making bad decisions. The many high-profile situations that I have examined demonstrate the bad outcomes that can be produced by mental traps and errors. My premise is that, at the least, if we recognize and admit that we don't know the answer, we will put more effort into looking for better decision options and limiting the risks stemming from failure when making important decisions.

In this case, a CEO led his firm - and some would say the entire country - over the financial precipice by escalating its reliance on risky financial instruments.

DOUBLING DOWN

Lehman Brothers CEO Richard Fuld believed that the investment bank was adequately capitalized when it increased its leverage from 12-1 to 40-to-1, became a major player in securitizing subprime mortgages, relied on risky credit default swaps for protection and engaged in accounting maneuvers that disguised how much debt the firm had taken on. Also, he believed that the U.S. government would bail out the firm when the policies and actions he had enabled put the firm on the brink of failure in 2008.

Contrary to Fuld's belief, Lehman Brothers was woefully undercapitalized as the financial crisis arose. The federal government walked away from an implicit "too big to fail" tag that Fuld and others thought would be applied to the firm. Lehman Brothers failed and Fuld was disgraced.

Three big mental traps jump out of Fuld's folly:

• Not having a sense that he was betting the life of the firm by taking on so much leverage and dealing in subprime mortgages and credit default swaps is a classic example of Risk Blindness (having the potential rewards of taking a risk obscuring the downside, ignoring the probability of adverse outcomes.)
• As the firm's bottom line became more dependent on securitizing subprime mortgages, Fuld kept upping the firm's involvement with the instruments even as it became increasing clear how risky they were. Fuld and his lieutenants thereby demonstrated Escalation of Commitment (the tendency for people to justify increased investment in a decision based on the cumulative prior investment, despite new evidence that suggests that the current cost of continuing the investment outweighs the expected benefit).
• Fuld's assuredness that his way was the road to great success for Lehman Brothers and that the U.S. government would backstop the firm suggests his incompetence, that he was captured by the Dunning–Kruger Effect (incompetent people often overestimate their abilities, competencies and characteristics and consider themselves more competent than others: They can't see their incompetence because they lack the skill to distinguish between competence and incompetence).

The lure of huge rewards can warp our sense of risk. We tend to overstretch to attain them. We don't see that our judgment is altered and therefore our decisions are more likely to go bad because they entail taking excessive risk.

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I expect to publish my new book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, later this year. It will be an antidote for bad decision individual and organizational decision making. You can help me get it published and in the hands of decision makers whose decisions not only affect their lives but all of ours.

Learn more about Big Decisions: Why we make decisions that matter so poorly. How we can make them better and my special half-price pre-publication offer. Thank you!

Case 6: Seeing what he wanted to see

This post is number six in my series looking at cases where it seems that "believing we are right" has led to bad outcomes, sometimes even spectacularly bad results, for leaders, teams and organizations.

For my upcoming book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, I have identified and categorized nearly 350 mental traps and errors that lead us into making bad decisions. The many high-profile situations that I have examined demonstrate the bad outcomes that can be produced by mental traps and errors. My premise is that, at the least, if we recognize and admit that we don't know the answer, we will put more effort into looking for better decision options and limiting the risks stemming from failure when making important decisions.

In this case, expectations from limited evidence led a brilliant scientist astray.

SEEING IS BELIEVING

Galileo stubbornly believed that Saturn was three planets in close orbit.

This belief, which the Italian astronomer clung to until he died, belied what otherwise was his use of the scientific method: Other astronomers with stronger telescopes reported that what he saw as multiple planets was instead one planet with previously unknown rings around it.

These traps and errors may have clouded Galileo's vision:

• Galileo, it seems, was among the first scientists to fall prey to Experimenter's Bias (experimenters' tendency to only put credence in cases that support the results they expect). He saw what he wanted to see and discounted evidence that he was wrong.
• The idea of rings around a planet was unknown to Galileo. He was led astray by the Representativeness Heuristic (judging the likelihood of an occurrence by matching it with a category or past circumstance, causing errors when the category or circumstance does not fit).. What he knew from his observations were planets.
• Having viewed only a few planets through his telescopes, Galileo used only a very small sample of observations to draw his "three planets" conclusion about Saturn. He made a Faulty Generalization (drawing a conclusion about all or many instances of a phenomenon reached based one or just a few instances of that phenomenon).

To understand a situation, our typical response is to merge what we have previously experienced with whatever evidence is at hand. This shortcut usually works, but when what happened in the past and the current evidence are not representative, our conclusion can be dead wrong. 

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I expect to publish my new book, Big Decisions: Why we make decisions that matter so poorly. How we can make them better, later this year. It will be an antidote for bad decision individual and organizational decision making. You can help me get it published and in the hands of decision makers whose decisions not only affect their lives but all of ours.

Learn more about Big Decisions: Why we make decisions that matter so poorly. How we can make them better and my special half-price pre-publication offer. Thank you!