Bad Decisions don’t just happen; they come from bad thinking.

When it comes to making new decisions, we let our intuition and excitement get too far ahead of our logic and reasoning. After all, it’s easy to do that.

The result of such a decision making process starts to show up in our careers and lives.

Bad decisions don’t just happen. They come from bad thinking.

To protect yourself from bad thinking that leads to business blunders, avoid the three decision-making traps below.

Trap 1: The Rosy Scenario

The name of this trap comes from an old government joke. In Washington D.C. any projection that sounded too optimistic was said to be written by “Rosy Scenario.” As you gather intel for your own decisions, you should be on the lookout for old Rosy.

Most leaders have a strong vision. We know what we want to see in the future, and we have a tendency to fit every new piece of information into that vision. 

We get so wedded to the outcome that everything, even if it’s contrary, somehow supports the decision we’ve made. This is classic confirmation bias. That’s the thing we want to stay away from. 

Get nosy, not rosy. 

You have to understand the difference between what you think and what you can prove.

“You lose more from a bad decision than you gain from a good one.”

– Michael Hyatt, NYT Bestselling Author

Trap 2: The Wrong Ingredient

When something goes right, we look for underlying principles or ingredients that make up the recipe for success. This practice can bring healthy predictability to business decisions. 

It can also wreak havoc when we misidentify which ingredient is responsible for the success.

It’s easy to mislabel ingredients. You have to do your research. You lose more from a bad decision than you gain from a good one.

Trap 3: Binary Thinking

Binary thinking is also called either/or thinking and the false dilemma. It’s the idea that every choice has only two extreme alternatives. 

It oversimplifies choices and shows through in statements like, “Either we invest in this new product or we go out of business.”

The key is to realize binary situations are rare. There’s usually a third option that reconciles the difference. Leaders tend to skip this critical thinking for the sake of efficiency. In other words, they want to get to a decision, even if it’s the wrong one.

Effectiveness should not be sacrificed for efficiency.