<p>Critical thinking, logic and reasoning are crucial elements of a decision, and sometimes get skipped due to our initial excitement coupled with intuition.</p>
<p>We fall into three basic traps of bad thinking, leading to wrong and often costly decisions: <em>The Rosy Scenario Trap, The Wrong Ingredient Trap and The Binary Thinking Trap.</em></p>

Bad Decisions Are Not Accidental

<p><strong>Any overly optimistic, idealistic or ‘positive vision’ decision can be a red flag of non-effectiveness</strong>.</p>
<p>Simply believing in a product does not guarantee high revenue. One has to get ‘nosy’ and not just ‘rosy’ in order to get towards reality.</p>

Bad Decisions Trap: The Rosy Scenario

<p><strong>While enjoying a ride in the sailboat of success, one can sometimes wrongly identify the ingredient that is responsible for the great outcome.</strong></p>
<p>Misidentification or a wrong assumption of the <em>key success ingredient</em> is an easy mistake to make, and one has to do objective research to avoid major losses of a failure.</p>

Bad Decisions Trap: The Wrong Ingredient

<p><strong>Decision-makers sometimes self-limit the available choices, making them fall into two extreme, oversimplified alternatives. The reason for this is the desire to be action-oriented and efficient.</strong></p>
<p>Leaders need to understand that probability of the choices being simply 0 or 1 is rare, and there have to be more alternatives if they do the required critical thinking, which would lead to effective outcomes.</p>

Bad Decisions Trap: Binary Thinking

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<h1>Bad Decisions Don’t Just Happen</h1>
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<p>A few years back, my team and I prepared for the launch of our new leadership product. We were excited. We even skipped a few key steps in our rush to market. We just knew we had something special. We messaged hundreds of thousands of people about the product, and when the launch was over, we’d only made one sale. That’s right—ONE.</p>
<p>Looking back, our mistakes are clear. We let our intuition and excitement get too far ahead of our logic and reasoning. We skipped over the critical thinking that’s required for this type of business decision. It’s easy to do.</p>
<p>Bad decisions like this don’t just happen. They come from bad thinking.</p>
<p>To protect yourself from bad thinking that leads to business blunders, avoid the three decision-making traps below.</p>
<h3><strong>Trap 1: The Rosy Scenario</strong></h3>
<p>The name of this trap comes from an old government joke. In Washington D.C. any projection that sounded too optimistic was said to be written by “Rosy Scenario.” As you gather intel for your own decisions, you should be on the lookout for old Rosy.</p>
<p>Most leaders have a strong vision. We know what we want to see in the future, and we have a tendency to fit every new piece of information into that vision. We get so wedded to the outcome that everything, even if it’s contrary, somehow supports the decision we’ve made. This is classic confirmation bias.</p>
<p>That’s the thing we want to stay away from. Get nosy, not rosy. For instance, don’t neglect the low-revenue projections simply because you believe in a product. You have to understand the difference between what you think and what you can prove.</p>
<h3><strong>Trap 2: The Wrong Ingredient</strong></h3>
<p>When something goes right, we look for underlying principles or ingredients that make up the recipe for success. This practice can bring healthy predictability to business decisions. It can also wreak havoc when we misidentify which ingredient is responsible for the success.</p>
<p>When I was in the publishing world, there was a huge publishing success around a book called <em>The Prayer of Jabez</em>. The book was pretty short. It fell into the gift book category. Universally, publishers agreed the key to success was in the small format of the book. Many invested in the mass production of more small-format books. In the end, almost all of them tanked.</p>
<p>It turns out that <em>The Prayer of Jabez</em>’s popularity was an anomaly. Publishers misidentified the ingredient that caused its success.</p>
<p>It’s easy to mislabel ingredients. You have to do your research. You lose more from a bad decision than you gain from a good one.</p>
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You lose more from a bad decision than you gain from a good one.<cite>Michael Hyatt</cite>
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<h3><strong>Trap 3: Binary Thinking</strong></h3>
<p>Binary thinking is also called either/or thinking and the false dilemma. It’s the idea that every choice has only two extreme alternatives. It oversimplifies choices and shows through in statements like, “Either we invest in this new product or we go out of business.”</p>
<p>Leaders fall prey to this all the time. The key is to realize binary situations are rare. There’s usually a third option that reconciles the difference. Leaders tend to skip this critical thinking for the sake of efficiency. In other words, they want to get to a decision, even if it’s the wrong one. Effectiveness should not be sacrificed for efficiency.</p>
<p>When you pull back from a seemingly binary situation, you will likely see more alternatives. Consider asking yourself and your team, “If we couldn’t do either of these, then what would we do?” The third option is often the answer.</p>
<p>To become a better decision-maker, you must become more aware of the traps around you. When you remove rosy scenarios, wrong ingredients, and binary thinking from your playbook, you’ll make smarter decisions and lead to win.</p>
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Last updated Monday August 10, 2020
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<div>Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.</div>
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<p>A few years back, my team and I prepared for the launch of our new leadership product. We were excited. We even skipped a few key steps in our rush to market. We just knew we had something special. We messaged hundreds of thousands of people about the product, and when the launch was over, we’d only made one sale. That’s right—ONE. </p>

<p>Looking back, our mistakes are clear. We let our intuition and excitement get too far ahead of our logic and reasoning. We skipped over the critical thinking that’s required for this type of business decision. It’s easy to do. </p>

<p>Bad decisions like this don’t just happen. They come from bad thinking. </p>

<p>To protect yourself from bad thinking that leads to business blunders, avoid the three decision-making traps below. </p>

<p>The name of this trap comes from an old government joke. In Washington D.C. any projection that sounded too optimistic was said to be written by “Rosy Scenario.” As you gather intel for your own decisions, you should be on the lookout for old Rosy. </p>

<p>Most leaders have a strong vision. We know what we want to see in the future, and we have a tendency to fit every new piece of information into that vision. We get so wedded to the outcome that everything, even if it’s contrary, somehow supports the decision we’ve made. This is classic confirmation bias. </p>

<p>That’s the thing we want to stay away from. Get nosy, not rosy. For instance, don’t neglect the low-revenue projections simply because you believe in a product. You have to understand the difference between what you think and what you can prove. </p>

<p>When something goes right, we look for underlying principles or ingredients that make up the recipe for success. This practice can bring healthy predictability to business decisions. It can also wreak havoc when we misidentify which ingredient is responsible for the success. </p>

<p>When I was in the publishing world, there was a huge publishing success around a book called <em>The Prayer of Jabez </em>. The book was pretty short. It fell into the gift book category. Universally, publishers agreed the key to success was in the small format of the book. Many invested in the mass production of more small-format books. In the end, almost all of them tanked. </p>

<p>It turns out that <em>The Prayer of Jabez </em>’s popularity was an anomaly. Publishers misidentified the ingredient that caused its success. </p>

<p>It’s easy to mislabel ingredients. You have to do your research. You lose more from a bad decision than you gain from a good one. </p>

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<p>Binary thinking is also called either/or thinking and the false dilemma. It’s the idea that every choice has only two extreme alternatives. It oversimplifies choices and shows through in statements like, “Either we invest in this new product or we go out of business.” </p>

<p>Leaders fall prey to this all the time. The key is to realize binary situations are rare. There’s usually a third option that reconciles the difference. Leaders tend to skip this critical thinking for the sake of efficiency. In other words, they want to get to a decision, even if it’s the wrong one. Effectiveness should not be sacrificed for efficiency. </p>

<p>When you pull back from a seemingly binary situation, you will likely see more alternatives. Consider asking yourself and your team, “If we couldn’t do either of these, then what would we do?” The third option is often the answer. </p>

<p>To become a better decision-maker, you must become more aware of the traps around you. When you remove rosy scenarios, wrong ingredients, and binary thinking from your playbook, you’ll make smarter decisions and lead to win. </p>

<p>You sink into bed exhausted, but nothing feels done. The daily whirlwind of activities swept you away while your greatest priorities took a back seat. We believe neverending to-do lists are the source of overwhelm and disappointment in life. You don’t have to let your to-do list call the shots. There’s a better way. </p>

Bad Decisions Don’t Just Happen - Michael Hyatt

Bad Decisions Are Not Accidental

Bad Decisions Trap: The Rosy Scenario

Bad Decisions Trap: The Wrong Ingredient

Bad Decisions Trap: Binary Thinking

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