Learn more about problemsolving with this collection
How to balance flexibility and structure in a hybrid team environment
Understanding the challenges of managing a hybrid team
How to maintain team cohesion
Group decisions are not risk-free
- Groups are better equipped than individuals to recognize an answer as correct. But, when the whole group is susceptible to similar biases, groups are inferior to individuals.
- Polarization can occur in groups. One major bias in risky decision making is optimism, while doubts are suppressed. If an individual in a group is thinking differently to the group, it is easy to understand how they would suppress themselves.
- However, in groups of competing individuals, such as the corporate investment committee, the different dynamics can lead to better decision-making.
- In an internal marketplace where groups come to a consensus about the risks and rewards associated with their decisions, internal incentives can shape how the group perceives risks and rewards that are different from the reality of the risks and rewards in the external marketplace. The incentives can distort risk perception.
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619 reads
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Decision analysis
Decision making can be divided into three systems: Emotional, rational, and perceptual systems.
The rational model is one where the beliefs and desires are supposed to be determined, but decision analysis of the last thirt...
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711 reads
The nature of the human judgment
People are not accustomed to thinking hard. They are often satisfied with a plausible answer that comes quickly to mind.
The prospect theory - the empirical exploration of risk assessment, loss aversion, and reference dependence, explains why people consistently behave in ...
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1.76K reads
Why decision-makers don't like decision analysis
Decision analysis is based on the idea that decision making is a choice between gambles. Managers think that they are fighting risk in a controlled way. The idea that you are gambling is an admission that you have lost control. It is detestable to decision managers, and the reason they reject dec...
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581 reads
Mechanisms needed for individuals and groups
Both individuals and groups need mechanisms to review how their decisions are made.
- Many businesses are averse to appointing someone to keep statistics on the decisions made and evaluate the biases, errors, the wrong forecasts, and the misjudged factors to make the p...
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544 reads
The perception of risk
The perception of and reaction to risk is often dismissed as emotional. The first thing that happens is you're afraid, and from that fear, you feel risk. So the view of risk is becoming less cognitive while emotion becomes dominant.
Emotion is about what might hap...
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810 reads
The law of small numbers
In statistical thinking, professional statisticians informally think the degree of the probability distribution in a small group will closely resemble the probability distribution in the overall population.
In other words, even people who should know better make these mistakes. When they'r...
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949 reads
The two-system theory
There are two thinking systems, each with distinct characteristics.
- System 1, or intuition. We think in this way most of the time. We respond to the world in ways that we're not conscious of and don't control. System 1 operations are fast, effortless...
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1K reads
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Ants Are Not Humans, Of Course
“Ant and human societies are very different and have taken different routes in social evolution,” Traniello shared. “Nevertheless, ants also share with humans important aspects of social life such as group decision-making and division of labor, as well as the production of their...
Create a group that consciously decides to spot biases for each other
- Groups that have a confirmatory style of thought enable one another to not learn and preserve identity
- Instead, create a group that has an exploratory style of thought
- The goal of the group is to create a more accurate mental model of the world
Intentionally create group norms
Every team has rules, but few are intentionally crafted. This could have a negative impact. For example:
- In a team of two, it's easy to create short back-and-forth emails. As more team members join, it becomes more complex keeping everyone in the loop. E...
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