Make Better Decisions

SARAH GREEN CARMICHAEL: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Sarah Green Carmichael. I’m talking today with Therese Houston. She earned her Ph.D. in psychology from Carnegie Mellon and he is the author of the brand new book, How Women Decide– What’s True, What’s Not, and What Strategies Spark the Best Choices. Therese, thank you so much for talking with us today.

THERESE HUSTON: Thank you, Sarah. It’s an honor to be here.

SARAH GREEN CARMICHAEL: Thank you. So I wanted to dive on decision-making, because I think it’s really the core of good leadership. And yet I know a lot of us are guilty of judging decisions by the outcome with the benefit of hindsight, rather than looking at the process and saying, even if it didn’t turn out the way we expected, this was fundamentally a good decision.

So when we encounter some of these obstacles that get in the way of making good decisions, what are some of those obstacles and why can’t we follow a good process all the time, even if we know what it is? What’s derailing at here?

THERESE HUSTON: It’s a good question. The primary problem is that we don’t realize how narrow our view is. And the fact that we’re too narrow in our view, because that’s where we’re looking, we don’t notice that there be other places that we could be looking. An example that I sometimes use is let’s say someone says to you, you really need to be more adventurous with your breakfast. You’re looking at your shelf where you have your cereals and you’re thinking, OK, should I mix Raisin Bran with my Cheerios?

You’re thinking, that might be a very adventurous breakfast. And really, what your friend meant was, you should try having eggs with avocado. And the idea is that all too often, we have a very narrow focus of where we’re looking at options. But because that’s where we’re looking, we don’t realize that we could pivot and have some very different options within our view.

SARAH GREEN CARMICHAEL: So it seems like when I think about ways to get more options on the table, if that’s like one place to start with making higher quality decisions, should be able just be brainstorming? Should they call on other people? What are some good tactics, I guess, for getting more options on the table?

THERESE HUSTON: A good rule of thumb is that you want three options. And we’ll get how to generate those options in a moment. But first of all, you should be saying, OK, do I have three options or not? And all too often– and I’m sure I’ve made this mistake myself this week– is we only give ourselves one option and we fool ourselves into thinking it’s actually two.

So we often will think, should I do this or not? Should I hire Samantha or not? Should I take a 30-minute lunch break and go for a walk or not? In each of those cases, there’s really only one option on the table– I’m going to make this change or I’m going to stay put. And if you give yourself three options– let’s take a business example. Your company’s thinking about building a parking garage.

So instead of just, should we build a parking garage or not, three options would be, should we build a parking garage, should we give all employees bus passes, or should we give our employees the option to work from home one day a week? That might all solve the same problem, but they’re very different options. Research by Paul Nutt, who used to be a business professor at Ohio State, has found that the quality of decisions go way up. As you can imagine, once you start generating more options, like in the parking garage example, you can see why you might make a better decision because you’ve got more options on the table.

SARAH GREEN CARMICHAEL: That’s a really interesting example. And I’m curious to know about some of the other advice that I commonly hear from people– not experts, but well-intentioned people about improving decision quality. One of the things being common is, sleep on it, or, don’t make decisions when you’re hungry or tired or stressed out. But we can’t always wait to make important decisions, especially in business. What about waiting, sleeping on it, having a snack? What do you make of these other well-intentioned bits of advice?

THERESE HUSTON: There’s fascinating research on that– sleeping on it or having a snack. Having a snack– the data there is particularly disturbing. There was a study done about parole granting in Israel and whether and how the committees that were deciding whether or not a prisoner should be granted a leave from prison, their decisions were based on how hungry they were. If they had just had a snack, they were much more likely to say, yes, that person is free to leave now. And if they were hungry and cranky, they were much more likely to say, go back to prison.

SARAH GREEN CARMICHAEL: Oh, no.

THERESE HUSTON: It’s terrible, right? And we would hope that we wouldn’t be biased that way. And we can look down our noses at those judges, but they were professionals. These weren’t random people trying to make this decision. So a number of people have pointed to that being the most consequential study. But a number of other studies have shown that if we’ve just had a snack, or if we’re making a decision after lunch, as long as we’re not too tired from lunch, we actually make better decisions.

And so it’s a very simple thing. But in a lot of cases, we can say, OK, let’s take 15 minutes before we make this decision to get a little bit of distance. Or if someone asks you for something, can I think about it overnight and get back to you tomorrow. Whether or not it’s sleep that makes the difference, the idea being that getting some distance from the decision is a really important step. And you may not be able to take a week, but at least an hour could make a big difference.

SARAH GREEN CARMICHAEL: I want to ask you, since your book focuses on women and you’re very familiar with this research, I do want to ask you about some of the differences between men and women. And maybe before we get into them, to sort of a baseline question. Are men and women different enough as decision makers that if you were advising a man or advising a woman, would you give them different advice, or are the differences more subtle, and thus you’d give basically the same advice to everybody, paying maybe more attention to their specific situation than their gender. How big a difference is there?

THERESE HUSTON: I love the question about, would I offer different advice. No one’s asked me that. For the most part, the places where people are making mistakes in their decisions are things like, they aren’t considering enough options. They’re not getting any distance. They haven’t clarified their priorities. For those different pieces of advice, that would be the same across men and women. If we’re talking and I can see that they haven’t clarified their priorities, they’re just making the should I, shouldn’t I, kind of decision, that would be the advice regardless of who I’m talking to.

Where the advice would become different is around, for instance, decisiveness. There are perceptions that men are much more decisive than women. And that can create problems for women. And I might offer advice for women around, OK, could this be a problem in your organization around decisiveness versus collaboration?

SARAH GREEN CARMICHAEL: Yeah, it is interesting, because I do think the women are often talked about as more indecisive, more risk-averse, more emotional decision-makers. And I’m curious to know what you see when you look at the science. What does the research say?

THERESE HUSTON: It’s interesting. The research shows that indeed, women do tend to be more collaborative in the real world. For instance, if you bring a woman into a research study and she’s just meeting her teammates for the very first time, she’s more likely to be collaborative than a male who’s meeting his teammates for the first time. That would be a research situation. In the real world, female mayors are more likely to bring in citizens on budgetary decisions than male mayors.

There’s also managers. Female managers more likely to ask for feedback on a decision than male managers. Now, that doesn’t mean all-female mayors make decisions one way and all-male managers make decisions another way, but this tends to be the trend. So there is evidence that women tend to be more collaborative, both in the lab and then the real world.

SARAH GREEN CARMICHAEL: So the other aspect of this is knowing how you’re perceived as a decision-maker. And this actually goes to the piece you recently wrote for HBR.org. There’s big, clear differences here in the research about how women are perceived versus men. But I’m sure every leader wants be perceived as a good decision-maker. What are some of the tendencies people have when they’re judging other people’s decisions so that those of us making decisions can better know how we’re perceived and manage that impression a bit so that people think well of us, and so that we are better judges of others?

THERESE HUSTON: One thing that we are looking for is we do look, whether we like it or not, we look at the confidence of the person announcing a decision or the person conveying that information. This is one of the concepts that I think we need more leaders to understand or more decision-makers to understand, is that while you’re making a decision, it’s actually very important to turn your confidence down if you think of confidence as a dial, because overconfidence is a huge impediment to good decision-making.

Lots of decisions, from the nuclear power plant disaster that happened in Japan as a result of the tsunami– that’s been chalked up to overconfidence. A number of major disasters have been chalked up to overconfidence. So while you’re making a decision, you want to turn your confidence down. But then once you’ve made your decision or else someone else has made the decision, you want to dial your confidence up in presenting that decision. Because whether we like it or not, that is a cue that people respond to that puts trust in the decision maker or not.

SARAH GREEN CARMICHAEL: So we have talked now about a variety of tips, and I want to try to bring them together a little bit so that we can recap what we’ve learned from this wide-ranging and I think very interesting conversation we’ve been having. So have at least three options is one thing. I heard you say, clarify your priorities, consider waiting 15 minutes or overnight or having a snack to make sure that this is really what you want to do. And then what we just talked about, turn your confidence level down a little bit when you’re actually making a decision, but convey the choice confidently once it’s made. Anything else you’d want to add to that? Any key steps we’re missing here?

THERESE HUSTON: Another strategy that I would recommend is to test your assumptions. We often don’t realize the assumptions we’re making when we’re making a decision. And if you simply ask your team or group, so, what are we assuming– you’ll probably be met with blank stares and awkward silence. You have to actually be sneaky to get people to voice their assumptions.

And a brilliant question comes from Roger Martin. He’s the dean of the Rotman School of Management in Toronto. And he asked this question. He says, what would have to be true for this option to be the best choice? So let’s say your group wants to hire a web designer.

And that web designer, the person that the group is leaning towards, has the highest price tag of the three people you’re considering. But that person also has connections to the five largest clients in the industry. So if you ask your team, what would have to be true for the most expensive designer to be our best choice, an important answer might surface.

Someone might say, we need the capacity to actually meet the needs of those high profile clients if they come to us. And that’s a key assumption. Maybe your organization couldn’t handle those clients right now. Maybe that’s a good decision for later. Let’s put that web designer on the docket to contact in a year. But right now, maybe that doesn’t make sense to go for that price tag. So that’s a great question to ask.

SARAH GREEN CARMICHAEL: I also wanted to ask you, if someone is listening to this who is just really genuinely indecisive, maybe they don’t have strong preferences a lot of the time. But the same time, as a leader you often have to make decisions even if you don’t have a strong preference. If there’s someone out there who’s genuinely indecisive and waffles a lot internally, what advice would you give that person?

THERESE HUSTON: That’s a tricky one. I think it’s an important question to the first of all, I think one of the things you’d want to think about is to have a reflection as to are you indecisive as a general pattern, or are you facing indecision? That’s a distinction that decision-makers make, the decision-making researchers make. It probably seems like it’s just a semantic. But people often go through periods of indecision when they’ve gone through a major change.

So maybe you’re going through a divorce or maybe you’ve changed companies or your boss has just changed. You’re in the same company but your boss has changed. That might trigger a period of indecision and that might last several months, where it’s harder to make decisions. That would be very different from being an indecisive person. If you’re facing a period of indecision, then it’s easy for you to, OK, well, now I need to ask someone else who’s made this decision.

If you’re indecisive in general, asking other people for advice can become unfortunately a crutch. You can always avoid making the decision and always ask someone else. A thing that can help people who are struggling with the decision is to ask yourself this question. If I were advising a friend on this decision, what would I suggest they do?

It seems like too simple to be true. But often, it jostles our perspective just enough. If you’re imagining someone else, the priority suddenly bubbles to the surface. When we’re indecisive, it’s often because there’s 11 priorities on the table. How could we pick one priority? And thinking, what I advise my friend to do, can often help. Everything shuffles a little bit, and the core priority stands out.

SARAH GREEN CARMICHAEL: Well, and the other thing that can come up– I think that’s a great piece of advice. I think the other thing that can come up and sometimes is indecisiveness in groups, which is sort of a different thing. You can have a roomful of people who each one is decisive on their own, but then somehow in organizations, it’s not always clear who has decision-making authority, or it is clear but yet that person for some reason isn’t able to push their agenda through and other people come in with their opinions, and then people aren’t really sure who to follow or even whether a decision has been made at all.

If you are in an organization where decisions are few and far between and you want more clarity, is there advice you would give people for helping to navigate that conundrum? I realize it’s very different than individual decision-making. But I’m just curious to know what you would think about that kind of situation.

THERESE HUSTON: Group dynamics are, you’re right, very different than individual dynamics for decision-making. A couple of thoughts come to mind. We’ve probably all had the experience where we go to a meeting and we leave it and we feel like no decision was made. And we’re so frustrated. That was a waste of time. So one thing that can be very helpful is if you happen to be leading that meeting or even if you’re an attendee, to seek clarity at the beginning of a meeting.

Is the goal of this meeting to reach a decision by the time we’re done in an hour, or is the purpose of this meeting to flesh out those options. Those are very different priorities. Or you may be trying to do both, to generate options and come to a decision. Hopefully those two conversations would be separated.

It also helps people become more decisive as a group if you set a time limit. So we were talking earlier about how as individuals, we want more time to reach decisions. Groups can become much more effective if they’re given a time limit and you prompt them halfway through the time limit. It might seem very artificial, but let’s say you have an hour. You state at the beginning of the meeting, by the time we today, we need to make this decision. So let’s start the conversation.

And then at some point in the meeting, you say, OK, we’ve used up 30 of our 60 minutes. We still need to reach a decision. And that can suddenly give a focus that the group lacked up until that moment.

SARAH GREEN CARMICHAEL: Therese, we have had a very wide-ranging conversation today. But I hope you have enjoyed it as much as I have. I feel like I’ve learned a lot now about decision-making, so I thank you for that.

THERESE HUSTON: Oh, thank you so much. This is wonderful, and I hope, so useful for your listeners.

SARAH GREEN CARMICHAEL: That was Therese Huston. Her book is How Women Decide. For more, go to HBR.org.