How to avoid cognitive biases in your Strategic Decision Making

In this column, looking at some global trends, I mention some that will influence every organization sooner or later. From ‘How it was’ to ‘How it will be’, picking up signals of potential change might help your -strategic- decision making. I explain the Agility Strategic Model. Decision making can be a tricky business because of many common pitfalls: the so called ‘cognitive biases’. Today we know 188 cognitive biases that influence a.o. our feelings and memories, our thinking and judgements, thus our decisions. Most people are not aware of these biases, especially Leaders should be very aware of it. I explain eight daily happening and recognizable cognitive biases.

Change became a constant phenomenon! The smallest signals in society or market could cause big changes. A next change or disruption will certainly come and strike with small or big effects; but when and how?

Companies are working hard adjusting or renewing their strategic plans as forced to by the Covid-Pandemic. And there are more unexpected disruptions, just think of the Russian Invasion in Ukraine and its consequences. ‘Old’ strategies are discussed in most organizations and new decisions have to be made for the future.

Figure 1. Future-Fit Framework some actual Trends (Source: The Reinvention Academy)

Not (highly) engaged employees cost your company a lot of money. In my column (August 2021) I showed that disengagement costs € 95,000,- per disengaged employee. (In an average company with 100 employees, with an average salary of € 500,- monthly). Replacing a disengaged employee cost 175% of the employees’ annual salary.

Recommended is therefor to have a clear chapter about Social Policies in your Companies’ strategy.

Revenues of highly engaged Employees