We can never guarantee that every decision we make is going to be successful. Perhaps you’ve delegated a task to the wrong person, hired a less optimal job applicant, or moved forward with a project that wasn’t carefully planned.
And as soon as you realise your error, it’s already late. The act has been done. When that happens, either you can waste your time regretting it or find ways to overcome it. How do you recover from a bad decision? Here are four ways you can do:
1. Free yourself from committing to sunk costs.
People are vulnerable to the sunk cost fallacy. When a certain endeavour fails, sometimes we tend to hold on to it because we had given our time, energy, and money to it.
That’s why it’s hard to let go of losing stocks. That’s why when individuals mistakenly order too much food, they tend to overeat “just to get their money’s worth”.
Conversely, if you realised you made a bad decision, the best action to take is to recognise the loss now rather than expending more resources to a lost cause.
2. Focus on finding the remedy.
Be willing to look at things at another perspective to treat the problem. Perhaps you relied on your instincts when you hired the job candidate who turned out to be less qualified. But then you might discover that she has a great personality and she’s willing to work on improving her skills.
3. Learn the lesson.
After acknowledging the fact that you made a bad decision, take time to extract the lesson from the experience. Where did you go wrong? Did you trust the wrong people? Were you too confident that it would go according to plan? Did you disregard the red flags? Did you let the opportunity slip up?
Identify what your decision-making biases are, and decide to overcome them. Once you do, you’ll be conscious not to allow these biases to blind you and you’ll be making smarter decisions next time.
4. Have a decision-making system in place.
There’s a way to make a decision where you’re comfortably responsible for the outcome — however it turns out. You can do this by using a system, or a process, which will allow you to reduce the risk involved in the decision making.
It’s Olivier Sibony who said, “Process trumped analysis by a factor of 6.” This means, a decision that’s governed by a systematic approach wins over a decision that’s simply made based on research and analysis.
As leaders, part of our work is to make sound judgements and smart decisions. It’s these decisions that help keep our businesses moving forward. It’s a tough calling.
That’s why whenever we fail to make a good decision, it’s important to recover quickly. Focus on finding solutions to remedy it, treasure the lessons, and ensure that the next time you are faced with the same challenge, you know better.
How about you? What do you do to overcome a bad decision? Share with us in the Comments section below.
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Glenn Bartlett is the Head of Strategy at Step Change. Glenn graduated with a commerce degree in 1998 and, like most Kiwis, bought a one-way ticket to London. He began his career as a 21-year-old at Saatchi & Saatchi managing strategy for Procter & Gamble business across Europe. He later moved client side and has worked for three of the most strategic organisations on the planet — Nestle, Unilever and Coca-Cola.