Module 6 – Managerial Decision Making and Organization Design

Leaders as Decision Architects

Understand How Decisions Are Made

Define the Problem

Human behavior is at the core of the problem.

People are acting in ways contrary to their own best interests.

The problem can be narrowly defined.

Diagnose Underlying Causes

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Design the Solution

Trigger System 1.

Arouse emotions.

Harness biases.

Simplify the process.

Engage System 2.

Use joint, rather than separate, evaluations.

Create opportunities for reflection.

Use planning prompts.

Inspire broader thinking.

Increase accountability.

Encourage the consideration of disconfirming evidence.

Use reminders.

Bypass both systems.

Set the default.

Build in automatic adjustments.

How to Choose the Right Lever

Test the Solution

Identify the desired outcome.

Identify possible solutions and focus on one.

Introduce the change in some areas of the organization (the “treatment group”) and not others (the “control group”).

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Outsmart Your Own Biases