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Erin White added to her collection of fine articles with one last week titled: "Why Good Managers Make Bad Decisions." The article is an interview with Sydney Finkelstein, a professor at Dartmouth's Tuck School of Business who has "studied decision-making, and tried to track down some answers in a new book he's co-authored called Think Again: Why Good Leaders Make Bad Decisions and How to Keep it From Happening to You."

The questions are good. Ms White asks: "What are the main reasons that leaders make bad decisions?" The professor identifies four. Here they are with my comments.

"Leaders tend to rely on past experience that seems useful, but is actually sometimes dangerous."

Wally's Comment: It's not that clear cut. Managers don't analyze historical precedents and past experience in a systematic way. It's the lack of analysis that leads to problems.

"A second reason has to do with self-interest. Most people don't realize self-interest operates at a subconscious level."

Wally's Comment: That's true for the manager's own self-interest. It's the reason that your doctor is likely to prescribe the medication from the drug company who paid his or her way to a seminar.

"The third one is what we call prejudgments. Leaders make prejudgments about their businesses that sometimes turn out to be wrong."

Wally's Comment: Of course they do. And they make pre-judgments that turn out to be right.

When they work, pre-judgments can speed up the decision process. When they don’t work they lead to decisions that are reactions. The trick is to ask, "What are we presuming about this situation?"

"The fourth one is what we call attachments -- attachments to people or places or things."

Wally's Comment: Let me add another one. There's an attachment to your own decisions. Quoth Bob Nardelli: "The hardest thing for a leader to change is something they put in place."

So, Ms White asks, "What are some of the ways leaders can avoid making bad decisions?" Here are the professor's recommendations, with my comments.

"The first thing leaders should do to reduce their odds of making bad decisions is walk into an important decision situation saying, 'Ok, I know that we are potentially biased in a variety of ways. Let's try to identify what those are.'''

Wally's Comment: If you're asking that question when you face the decision, it's too late. Better to have a system for analyzing situations so you can render the biases at least partially impotent.

"Second is to avoid the 'yes man' trap. You have to bring different people and different data sources to the table. You want to add a "no team" to argue against the proposal, and put some teeth behind that no team.

Wally's Comment: Again, reality is more complex. Part of it involves another version of the self-interest trap that the professor already identified. Only this time the self-interest in question is the self-interest of a team member and it may not be subconscious, just sub rosa.

When you dig deeper though, you can identify the "yes-man trap" as a variation on the "reality distortion trap." If you're a decision maker, you have to develop your own sources of information, ones that aren't dependent on the people who work for you.

I was frustrated reading this interview because I thought that Ms White's questions didn't really get answered. I'm hoping that's a result of the space to be filled (on the web?) and not the underlying book.

What was good for me was that the article got me thinking about all the things I've seen in forty years in business that can lead to a bad decision. I'll be writing about some of them over the next few days.

Here's one question for you: What causes of bad decisions have you witnessed or experienced?

Here's another: What tools or techniques have you used or witnessed that help decision making?

Here are four recent posts on decision making and planning.

One of these things is not just like the other
When it's decision time, it's tempting to use previous experience or a historical analogy as a guide. But that's dangerous unless you do some rigorous comparisons.

With the humans come the emotions
Despite what you may have learned in economics, human beings make decisions for all kinds of reasons other than maximizing economic good. And they always bring their emotional humanness to the decision-making task. You'll make better decisions if you understand that.

Tips for Better Decision Making
Decision making will always be a human and error-strewn process. But over the years I've found some things that will increase the likelihood of good decisions.

Planning for an Uncertain Future
Too many leaders are planning for the future like they always have. That won't work in a whitewater economy.

Wally's Working Supervisor's Support Kit is a collection of information and tools to help working supervisors do a better job. It's based on what Wally's learned in over twenty years of supervisory skills training. Click here to check it out.