How to Avoid Anchoring in Strategic Decision Making?

Anchoring Bias
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Jos Nieland
Netherlands

How to Avoid Anchoring in Strategic Decision Making?

🔥NEW Recently, Taleb and Nobel prize-winning psychologist Daniel Kahneman together explored their differing approaches to unlocking the mysteries of decision making processes (in the New York Library). Taleb learned from Kahneman the idea of anchoring bias: when you ask someone the last four figures of his social security number and then how many dentists exist in Manhattan, there will be a correlation according to Kahneman.

People use available 'knowledge', information and forecasts (KIF) without any doubt. And the more complex the KIF presented, the riskier decisions people make! People are too 'gullible' (Editor: ~naive, unsuspecting) using KIF. Besides this naivety, sometimes it can also be very profitable for them to use complex KIF (think of bonuses and rewards).

So people, according to psychology, will overly use (early) presented KIF in their decisions. And that can be disastrous: such decisions, based on anchoring and forecasting, can have severe side effects (Taleb calls them 'iatrogenics', a medical term), which decision makers do not see or expect, or do not want to see. And these side effects are particularly severe and dangerous in Taleb's fourth quadrant ("wild randomness", see the summary of Black Swan Theory).

The question I have is: How do you prevent anchoring bias (AB) from occurring when making strategic decisions in your organization and - if you can't - how do you counter these severe side effects?

  Nhlanhla Sibisi
Student (University), Germany
 

The Experience Factor in Strategic Decision Making..

How is the 'experience factor' included in this (o (...)

  srinivas
Lecturer, India
 

Role of Consciousness in Decision Making

I think if the decisions are based on consciousnes (...)

  Jaap de Jonge
Editor, Netherlands
 

Will Consciousness Help a Lot?

@Srinivas: Thanks for your contribution to this di (...)

  Ian van Jaarsveld
Strategy Consultant, South Africa
 

Anchoring Bias and Influences

@Jaap de Jonge (Editor): I think this comment is s (...)

  Marcel Wiedenbrugge
Consultant, Netherlands
 

How People make Decisions

Kahneman's book 'Thinking, fast and slow' already (...)

  Tom Wilson
HR Consultant, United States
 

Everything Anchors Bias; Consider 6TH

This issue is of the essence in all planning and d (...)

  Marcel Wiedenbrugge
Consultant, Netherlands
 

Decision Making - 6 Hats

I think 6 hats is certainly a nice model, but it d (...)

  Venta Longman
Turnaround Manager, Jamaica
 

6TH Expands Decision Making

KIF are definitely influencers in decision making (...)

  Alan Kennedy
 

The WRAP Model of Decision-Making

I think Mr. Wiedenbrugge makes an important observ (...)

  J Braun
Entrepreneur, United States
 

Understanding the Basic Power of Disagreement

I work in a family organization, and it's a fair s (...)

  srinivas
Lecturer, India
 

Consciousness Based Decision Making

Hi @Jaap, it is true that information received fir (...)

  Makini
Business Consultant
 

Experience in Decision Making

@Nhlanhla Sibisi: it's true that experience can gu (...)

  Jos Nieland
Netherlands
 

Preparing for Downsides/ Sideeffects After the Decision

De Bono's 6 Hats, Kahneman's book and Heath and Si (...)

  Tom Wilson
HR Consultant, United States
 

Constantly Operating Contingencies

@Makini: I agree completely. In fact, the more exp (...)

  Venta Longman
Turnaround Manager, Jamaica
 

Experience, Imagination, Creativity and Adaptation in Decision Making

Experience is one of several variables in decision (...)

  Jim Carwardine
Business Consultant, Canada
 

AB Can Be Avoided..

Many decisions are made in a Problem-Solving (PS) (...)

  Tom Wilson
HR Consultant, United States
 

Creating a Mindset Begins with AB

@Jim Carwardine: All of these formulas for decisio (...)

  Oluyemi Anjorin
HR Consultant, Nigeria
 

Decision Making Viz-a-Viz Bias

Decision making requires critical thinking and cri (...)

  Damodaram Kuppuswami
Consultant, India
 

Objectivity and Self Inquiry

One possible approach could be enhancing objectivi (...)

  Jim Carwardine
Business Consultant, Canada
 

Anchoring Bias Can Be Avoided..

@Tom Wilson: Point taken, Tom... My shorthand was (...)

  Mucherwa Oliver Ngoni
HR Consultant, Zimbabwe
 

Avoiding Anchoring in Strategic Decision Making

@Nhlanhla Sibisi: but how do you define 'experien (...)

  Tom Wilson
HR Consultant, United States
 

AB is a Characteristic of the Self-organizing Mind

@Mucherwa Oliver Ngoni: You have probably seen tha (...)

  srinivas
Lecturer, India
 

Irrational Elements Can Educated

@Tom Wilson: The irrational elements of the mind c (...)

  Tom Wilson
HR Consultant, United States
 

The Unconscious Can Be Enriched Through Experiential Training

@Srinivas: I agree completely. As you say, that is (...)

  srinivas
Lecturer, India
 

Role of Good Association

@Tom Wilson: Does good association help with disas (...)

  Tom Wilson
HR Consultant, United States
 

Dissociation and Good Association

@Srinivas: This is getting a bit beyond my pay gra (...)

  shashinhale Wanna
Project Manager, Tanzania
 

Decision Making, Age Contribute to Biasness

I'm sorry to say that "the older people become, th (...)

  Jorge Garrido
Director, Mexico
 

How do You Prevent Anchoring Bias (AB) from Occurring When Making Strategic Decisions in your Organization and if You Can`t How do You Counter These Severe Side Effects?

A lot of executives never played in a team when th (...)

  Satya Nistala
India
 

Anchored Bias or Anchoring Bias. How to Avoid it?

The question is: Are we anchored and thus make bia (...)

  Tom Wilson
HR Consultant, United States
 

Action as Meditation

@Satya Nistala: While I agree with you in the main (...)

  srinivas
Lecturer, India
 

The Effect of Yoga on Avoiding Anchoring Bias

There is a knowledge body which is called kriya yo (...)

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