Judgement Trap in the decision-making process

 Judgement Trap in the decision-making process 

(Emotional Management for Personal & Professional Growth Series)

 

As discussed, the thinking trap that affects decision-making quality, the last one is the "judgment trap."

What is judgement trap?

Most of us are good at predicting the outcome in routine activities like judging the distance, traveling time, some people's responses to particular queries, etc. We do it frequently and adjust our predictions based on experience and feedback.

However, business events are not easy to predict, and poor prediction will affect the quality of decision-making. For example, the commodity price next year and the sales projections for the next three months are all difficult to judge unless we do the judgements too frequently and get feedback to correct our predictions.

In those business decisions, we fall into the trap of overconfidence or underestimate or go by our past experience, which most of the time affects the quality of decision making. That is a judgment trap.

Most organizational growth challenges are not due to people's capability or resource issues. It is primarily due to underestimating the growth potential by the business leaders and not being prepared for it.

In the book "It happened in India," the author Kishore Biyani argued that we had underestimated the growth as a nation, which resulted in a lack of infrastructure. That is a judgement trap, either overestimate or underestimate.

How can we improve our judgement accuracy?
 

1. Expert suggests that instead of anchoring one figure, always go for high and low extreme projections and challenge the assumptions in each scenario, then arrive at some RANGE than sticking on to one fixed no. For example, when estimating the sales projection for next year, look for the ranges in the worst and best scenarios and improve the range instead of fixing one figure.
2. We subconsciously go by our memory or experience; it is better to share our judgment with the people who are not biased with the past. They may give better projections that can be considered.

 
Despite there being many forecasting techniques in the market, we are biased with our thinking of overestimation or underestimation or biased to memory which may affect the decision making.
 
We need to be aware of the trap when judging future projections or events.
 
Have a nice week ahead!