D.I.Y. Decision-Making

Have you ever assembled something from IKEA? You grab the Allen wrench, lay out the instructions and begin. Then, voila! YOU did it! You are so proud of it, even if the bottom drawer needs to be wiggled to shut. Still, it’s beautiful. Damn, you’re good.

At work, have you ever completed a project? You assemble the team, lay out the plan and begin. Then, voila! The project is complete! You’re so proud of it, even if you went over budget and a few team members resigned. Still, it’s a beautiful thing. Damn, you’re good.

When we invest our time and energy in a project, we’re likely to fall in love with it, regardless of how it turns out. Our view of our work is skewed by the IKEA effect – a cognitive bias in which consumers place a disproportionately high value on products they partially created.  

The IKEA effect has two key organizational pitfalls (Harvard Business School): (1) sunk cost effects, which can cause managers to continue to devote resources to failing projects in which they have previously invested, and (2) the “not invented here” syndrome, in which managers refuse to use perfectly good ideas developed elsewhere in favor of their – sometimes inferior – internally-developed ideas.

It’s hard to spot cognitive bias, default patterns of thoughts and behavior that make you arrive at misleading conclusions, in our selves because it often comes from subconscious thinking.

For this reason, effective leaders do the following:

• Establish practices to introduce objectivity into decision making.
  • Allow more time for critical decisions to be made.
  • Commit to “trip wires” – specific dates when certain results must be met. If the criteria are not met, a pre-determined action may be change course or stop the project.
• Surround yourself with people who will challenge your opinions.
  • Let them know that you will listen carefully to their views — even when they tell you something you don’t want to hear.
  • Create practices that invite them to challenge you, remembering that speaking truth to power takes trusting relationships.
• Bring more awareness into your default mode of thinking.
  • For instance, what are you thinking right now? That you are someone who isn’t affected by biases? Right.

Having cognitive biases is part of our human design. Being responsible for understanding and counter-acting them is the part of being an effective leader.

Thanks for listening. Onward!