Good business decisions are not just about what gets decided. If we are wise, we pay attention to how decisions are reached as well. Particularly for boards, where the buck finally stops, the process can matter as much as the outcome.
Deborah was a board chair, and spoke to me about misgivings she had about a recent decision. Several of her colleagues also felt it had not been the best decision at the time, and should be reversed if possible.
Some of the most important board decisions are made under high uncertainty, and with incomplete data. Deborah was wondering how she could assess this decision, without waiting until it was too late.
I asked Deborah to describe the lead-up to the decision that worried her. Turns out one of the directors had special charge of the matter, and had expressed an opinion with a very strong level of confidence and conviction. Other directors went along with what seemed like a persuasive line, although discomfort surfaced afterwards.
How did that board of intelligent people, deliberating carefully, get itself into this position? What lesson could they, and others, learn about making better decisions?
As we dissected the story, Deborah and I concluded that the board allowed itself to be caught up in the “illusion of confidence”. It’s one of those cognitive biases we come equipped with; they take a lot of self-awareness to detect and manage. We have a bias towards giving undue weight to opinions expressed with great confidence, and that’s exactly what happened. The other directors allowed themselves to be swayed by the style, more than the logic.
Could your board be making the same mistake?
Here’s a tip: attend to the process just as carefully as you do the subject matter. Start by building a culture of critical thinking where all voices are weighed on their merit, not just their delivery.
Want to ensure your board isn’t falling into the same trap? Let’s talk. At Upland Consulting, we help boards sharpen their decision-making processes to avoid these common pitfalls. Call me and let’s have that conversation.