Why good people make bad decisions -- despite great intelligence!

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Why GOOD People Make BAD Decisions -- Despite GREAT Intelligence!

Every decision is a product of desires, doubts, delusions, and expectations.

John L. Clarke, Deloitte Consulting

As competitive intelligence professionals, we know that acquiring useful information and developing actionable intelligence often isn’t enough. If the decision-makers to whom we provide the intelligence fail toappreciate it, understand it, or act on it, they suffer the same effect as if the intelligence had never existed.

Each of us probably knows of examples where, despite the quality and quantity of intelligence, key decision-makers fail to make use of it. While the obviousness of the need to act on warning may be perfectly evident to the CI manager, the lack of understanding about thedecision-maker’s environment may lead to puzzlement—and failure.

The fact is, decision-makers do not live a value-free environment. Every decision they make is a product of desires, doubts, delusions, and expectations. CI professionals will experience frustration, and their role will be diminished, if they fail to anticipate, recognize, and counteract these obstacles.

This article is intended to appriseyou of the pitfalls, blind spots, and stumbling blocks that can prejudice the value of your intelligence products—and to suggest some methods for dealing with them.

How Decision-Makers Use Intelligence to Make Decisions

Because business decisions, particularly those about competitors and the future competitive environment, are made in an atmosphere of variable uncertainty, decision-makerssubconsciously employ a variety of cognitive and motivational tools to help them deal with this uncertainty. These decision-makers, as with all humans, seek simplicity, consistency, and stability in their external environment; their decisions are a reflection of their need to internalize these factors. Response to intelligence is therefore subject to the perception of the decision-maker. Nointelligence products can be expected to stand on their own merits. That bears repeating. What may seem obvious to you may strike another as misleading, irrelevant, or even wrong. It must be expected that the intelligence will be interpreted according to a frame of reference and within a specific context unique to the individual decision-maker. For example, a decision-maker in the publishing industry,with long experience in print media, may not be well-disposed when she is presented with intelligence about coming threats from electronic media outlets, particularly innovative or non-traditional outlets. These blind spots may make it difficult for intelligence products to be understood and appreciated. The key for proper response to intelligence warning thus lies in the evaluation and judgment ofthe decision-maker; for without response all warning, however accurate, is useless. Failure to anticipate and manage the external context (as well as to influence the internal context) in which intelligence is viewed will diminish, attenuate, or even eliminate the value of intelligence.

“I’ll believe it when I see it; I’ll see it when I believe it”: Cognitive Factors in Decision-MakingDecision-makers tend to organize information according to pre-existing sets of impressions and beliefs. These impressions and beliefs, often called “images,” form the foundation upon which the perception of current events is based. Equally important, they are the basis for evaluating and interpreting new information.

These images may include perceptions, prejudices, preconceptions, beliefs,presumptions, assumptions, and desires, and they are historically based in that they are a product of the individual’s experiences.
Decision-makers tend to organize information according to pre-existing sets of impressions and beliefs.
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