Management Perspectives

If you are climbing the corporate ladder, you have probably made some fairly smart decisions along the way. But could you have had a smoother ride with fewer errors? In today’s AI-based, fast-paced world, good judgement has become an underestimated skill. It is simply expected—and a differentiator to be mastered. Multiple myths exist about the art of decisionmaking which can unintentionally jeopardise careers, reputations, economies, livelihoods, and even lives. As I explain in my book, TUNE IN: How to Make Smarter Decisions in a Noisy World, human decision error starts with tuning out the voices that really matter, especially in highstakes situations. That may be the unheard customer, employee, voter, patient, maverick, or minority. Tuning out explains why business and governments are so distrusted. It is why activism is rising, countries are polarising, startups are imploding, and mergers are still failing. Leaders encounter at least 10 judgement traps, all rooted in bias. As a behavioural scientist and nonexecutive director with three decades in financial services, I find that five myths about judgement in particular repeatedly derail ambitious leaders.

MYTH 1: More information means better decisions

With the information superhighway, there is a tendency to believe that more information, advice, or instruction leads to better decisions. It is understandable. The problem is that too much information leads not only to analysis paralysis but provides false comfort. More data is just a crutch. Last year, Deloitte reported a 22 per cent increase in mergers and acquisitions activity across India. In major transactions such as Adani’s acquisition of Ambuja Cements, it is not unusual to cling to data rather than seek true risk signals.In our modern cyber vortex, too much data can fool us into imagining patterns. University of Oregon professor Paul Slovic found that people exposed to 88 variables were no more accurate in predictions than those exposed to five variables. Unlike money, more data does not make you happier or more accurate. With more data, confidence increases rather than the accuracy of predictions or great decision-making.

MYTH 2: Decision consensus beats decision conflict

While consensus is often seen as the hallmark of collaborative decision-making and human-centric leadership, striving for unanimous agreement can be unrealistic and counterproductive. Consensus is not better than conflict—it is the enemy of groupthink. In the early days of the auto industry, Gottlieb Daimler concluded that one million cars would never exist due to a “lack of capable drivers.” Yet pre-pandemic sales reached 90 million vehicles. Embracing constructive conflict and challenging assumptions allows diverse perspectives which in turn, drive innovation. In resource-constrained situations, some degree of conflict is more inevitable than consensus. Territorial wars, neighbourhood competition, and workplace factions bear this out. Blind consensus or conformity based on fear of authority or desire for acceptance is rarely better than unmanaged conflict. Yet, it is the root of corporate blind spots and deaf spots.

MYTH 3: Everyone tunes into the leader’s voice

People who hold power typically assume that everyone hears their voice. But that is not the case. It is the classic ego trap. In today’s noisy, tone-deaf world, it is simply not possible. People only hear at 25 per cent operating capacity due to neurological processing constraints. Moreover, people tend to hear the first or the most popular voice—even over the most senior voice. Do not assume that others hear you. I have identified a suite of 75+ biases that distract people from absorbing critical information, even if it is from the leader. It is only by slowing down long enough to interrupt your own thought process that better decisions are made.

MYTH 4: Strategic decisions are made rationally

Unfortunately, most boards have an inbuilt preference for what is rational, measured, and logical over soft skills such as understanding intuition, bias, or emotion. The love of spreadsheets tends to dominate. Yet, the most important decisions are influenced by subjective, irrational elements. In the workplace, hope, ambition, envy, greed and impatience typically distort strategic hiring or investment decisions. Moreover, most people feel more comfortable choosing the safer option over the best option—it is the status quo bias. There are exceptions. When Netflix invested in original content over licensing content, they recognised the potential of series like The Crown, Sherlock, or House of Cards. Strategic decisions that incorporate logical analysis and psychological insights typically produce better outcomes.

MYTH 5: Yesterday’s decisions don’t affect today’s decisions

It is easy to think today’s decision operate in a vacuum. Yet, past decisions are a liability, especially, if you are unaware of their present potency. This memory-based misjudgement trap explains why businesses still fail despite past lessons, why people invest in failing projects or repeat mistakes. Past decisions also affect ethical choices. For instance, people descend the slippery slope through gradual acclimatisation. The expenses fiddler does not get caught, so repeats the pattern of misconduct. That is how most rogue traders, money launderers, and drug traffickers start. Moving on from past error is not easy, yet, it is an asset I have seen in business and sport. For example, when Novak Djokovic played unseeded Nick Kyrgios in the 2022 Wimbledon final, Djokovic had never won a set against Kyrgios. Pumped with this ‘flashbulb memory’, Kyrgios won the first set. But Djokovic tuned in to his experience memory of six grass-court wins to inspire a seventh Wimbledon and 21st Grand Slam title. Like Kyrgios, we remember our mistakes as today’s decisions are linked to the past. Misjudgement may not be your fault, but course correction and awareness of accepted wisdom is always your choice. We cannot control circumstances, but we do control our greatest asset—our minds. Debunking the more accepted decision-making myths helps leaders to stand out not lose out. Smart leaders tune into the voice of conscience and common sense over the voice of comfort or convenience. It is time to reconsider how we make decisions and tune out of what matters. It is time to ‘TUNE IN’.