Our decision struggles when we innovate

decisions. Even if we know which decision is the right one, we may sometimes opt to choose another option, driven by our feelings, preconceptions or how the information is presented to us.

What Thaler wants to correct by “nudging” are errors created by our ways of evaluating and making decisions. In complex and uncertain situations, mental shortcuts, so-called heuristics, help us make decisions. While accelerating our decision making, these heuristics may bias it, possibly leading us down the wrong track without us taking notice.

These deviations from a purely rational decision, cognitive biases, are a danger to us and our businesses as we may lose the sovereignty over our own decisions. If we let our decisions be driven by heuristics and become biased, we give away the decision authority to our instinctive, instead of thinking.

These instincts, however, did not develop in our modern and fast-living times, but are remnants of the development of our decisionmaking capabilities. While helpful in many instances, they can hinder us in our business decision-making process. Feeling strongly toward our group’s ideas helped us progress as a society. As a team, we are stronger than as individuals. But does that mean that information from an outsider is not worth recognizing?

In the next parts of this series, I will be discussing the fallacies we face in our quest to drive our businesses through innovation. I will dive into what my own experience with innovation managers and that of leading economists and psychologists have revealed about our decision-making behavior, and what we should learn from it.