CXO Leadership

Decision Making Traps

Decision Making Traps

Decision making is an important ability for all leaders and executives. It is arguably the most important component for any executive. Most executives create systems and models to facilitate effective decision making. However, even with all the systems and data-driven models, decision making is still difficult.

One of the reasons, as cited by Hammond et al. in their article in the Harvard Business Review, is that most decisions are not based solely on intricate decision making processes, but are impacted by the mind and mood of the decision maker. Good decision making processes can be undermined by mental traps created in the brain of the decision maker.

A trap that impacts decision makers in the IT space is the sunk cost trap. The sunk cost trap is when the decision maker frames choices to validate and justify past decisions even when they do not align with current and future trends. This is best seen in IT when a technology solution has been selected that no longer meets the needs of the organization. Instead of cutting ties with the outdated solution, decisions are taken to continue with investing money into a solution that will never yield the desired results which puts the organization and decision maker into a sunk cost trap.

Such was the case at our organization. We purchased a registration software that, at the time, seemed like a solution we could build upon for many years to come. As time progressed, we noticed more modifications and custom code that needed to be developed in order to meet our rapid changing business needs. It seemed easier to continue with a software we all had invested in even though we knew it was not meeting our needs. Not until we instituted a governance structure, made up of people who had no ownership of this product, could we see that moving from this product would save us money and help us to achieve our business objectives.

What I discovered is that receiving input from people who have no involvement with the process and soliciting their opinions is one way mitigate this decision making trap. Once we encouraged them to be open and honest, we were able to receive the information we needed to move forward. I think it is also important to remind yourself that even the smartest choices can have bad consequences. Even the most experienced executives are not immune to decision making traps. To quote Warren Buffett, “If you find yourself in a hole, the best thing you can do is to stop digging.”

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Maurice Ferrell

Maurice Ferrell, Assistant Dean & CIO, University of North Carolina at Chapel Hill- School of Government

Before joining the School of Government at the University of North Carolina at Chapel Hill in February 2009, Maurice Ferrell served as the 1st chief information officer for the Institute for Advanced Learning and Research in Danville, VA. H... More   View all posts


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Maurice Ferrell


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