Are you working in an organization where leaders demonstrate excellent judgment when making crucial decisions? Do the leaders in your organization make decisions by recalling past events accurately?
One of the most powerful questions one can ask oneself is “Am I recalling past events objectively?” Inspiring leaders make good decisions by carefully examining their assumptions..
Are you sometimes hampered by your ability to remember past decisions accurately? Are you able to make better decisions by creating a workplace climate where others are free to offer frank input?
The “Recallability” Trap
Even when we’re neither overly confident nor unduly prudent, we can still fall into the trap of basing predictions on memories of past events. Recollections of dramatic events leave strong impressions on our minds and can skew future decision-making efforts.
Anything that hampers your ability to recall events objectively will distort pending probability assessments.
The Antidote
You must take a very disciplined approach to making forecasts and judging probabilities:
• To reduce the effects of overconfidence when making estimates, always start by considering the extremes: the low and high ends of possible value ranges. This will help you avoid being anchored by an initial estimate. Then, challenge your estimates of the extremes, as well as those of your subordinates and advisers.
• To avoid the prudence trap, always state your estimates honestly, and explain to anyone who will be using them that they have not been adjusted. Emphasize the need for frank input to anyone who will be supplying you with estimates. Test estimates over a reasonable range to assess their impact.
• To minimize the distortion caused by variations in “recallability,” carefully examine all of your assumptions to ensure they’re not unduly influenced by your memory. Get actual statistics whenever possible, and avoid being guided by impressions.
Working with a seasoned executive coach trained in emotional intelligence and incorporating leadership assessments such as the Bar-On EQ-i and CPI 260 can help you become a leader who makes the right decisions. You can become a leader who models emotional intelligence, and who inspires people to become happily engaged with the strategy and vision of the company.
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