The Secret Dilemma of Decision-Making
Not making a choice but un-choosing is one of the more subtle problems of many individuals including leaders. Although decisions may be perceived as an analytical process, in real sense, they are highly colored in terms of ownership and emotional involvement.
The Problem with Ownership and Why It Distorts Judgment
We suppose that decisions are on evidences and choice of the best course of action. However, when one does get the idea, strategy or belief, its perceived value will increase. Psychologists explain that this is the Endowment Effect – we appreciate more what we already have.
The Endowment Effect in Investing
This bias is prevalent in the area of investing. A falling stock can be held by an investor since it does not feel like making a mistake to sell. Ironically, the same individual may not purchase the same stock at present, but has a hard time selling it.
Organization Attachment and Legacy Thinking
This is also experienced in organizations. Products have outlived their usefulness. The processes are perpetuated by the mere fact that this is the way we have always done things. At this level, it is no longer about merit but about attachment that is made.
Status Quo Bias and Strategic Inertia
Status Quo Bias supports the Endowment Effect in that we like the status quo more because it is there. These prejudices jointly produce momentum that passes off as belief and smartness.
When Clouds of Emotional Investment Leadership
This makes leadership tricky not only whereby the future is unpredictable, but also when people have emotional attachment on decisions made in the past. The most costly errors are not always wrong decisions, but our decision to make a certain choice was correct once, and we are not ready to reconsider it.
A Question to Get Objectivity Back
A common tool to refrain is to inquire:
Had it not been ours would we take it now?
This question eliminates the attachment to judgment and brings back rational assessment- a point that is frequently reflected in articles concerning thoughtful leadership in the ajay srinivasan news stories.
Organizational Detachment
The organizations can overcome attachment by establishing structure:
- Sunset clauses
- Periodic portfolio reviews
- Rotating decision-makers
Time brings about attachment; there needs to be healthy detachment brought into systems by time. There is also a similar insight present in discussions of ajay srinivasan and strategic governance.
Praising Strategic Withdrawal
Organizations also celebrate the launching but not the closing. But tactical retreat, based on consideration and not on passion, is frequently an indication of sanity and self-control.
Leadership: The Boldness to Rebranchiate
The Endowment Effect is too human. Attachment displays continuity, identity, and ego. However, once evaluation is substituted with attachment, yesterday strengths may turn into tomorrow limits.
And, lastly, leadership does not simply consist of the ability to make decisions.
It is concerning the strength to rethink.
Since advancement is not necessarily in adopting the new –
it is frequently the result of forfeiting the right one held.