CEO's and corporate executives make decisions daily, drawing from their knowledge, insights and experiences. However, despite making myriads of good-to-great decisions, CEO's can make a wide range of bad decisions ranging from unwarranted, to ill-timed, to egregious decisions that can sustain far reaching, irreversible consequences.
A couple of the main reasons CEO's make bad decisions are explained by McKenzie & Company as:
a) Confirmation Bias; and,
b) Overconfidence Bias
A couple of the main reasons CEO's make bad decisions are explained by McKenzie & Company as:
a) Confirmation Bias; and,
b) Overconfidence Bias
a) CONFIRMATION BIAS
All too often, we as CEO's like when people below, above or around us tell us what we want to hear or what believe about something. It tends to affirm our decision without seeking any other input or data. Psychology Today explains Confirmation Bias as something that "occurs from the direct influence of desire on beliefs" or in other words, 'wishful thinking'.
All too often, we as CEO's like when people below, above or around us tell us what we want to hear or what believe about something. It tends to affirm our decision without seeking any other input or data. Psychology Today explains Confirmation Bias as something that "occurs from the direct influence of desire on beliefs" or in other words, 'wishful thinking'.
b) OVERCONFIDENCE BIAS
Roger Lowenstein wrote that “there is nothing like success to blind one to the possibility of failure.”
Roger Lowenstein wrote that “there is nothing like success to blind one to the possibility of failure.”
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