Index
accurate statements, falsehoods and, 28
acquisitions and mergers, the real value of, 90
advisers, the importance of trusted, 17
affiliations, group, 73
akrasia, 27
alternative explanations,
considering, 36
implementing, 43
alternative explanations and debiasing, 31
alternative evidence, finding, 36
alternative options,
implementing, 43
alternative options and debiasing, 31
alternatives,
examining, 81
expanding options through, 36
next best, 37
Amazon and avoiding failure, 147–148
anchoring bias, fighting against the, 40
anxiety, decreasing, 12
AOL, merger of, 15
assessment,
halo effect and, 96
horns effect and, 96
attention judgment errors, solving, 149–152
attention, ways to apply your, 130
attention-related cognitive bias, 149
evolutionary perspectives and, 134
falling for, 134
attribution errors, addressing, 80–81
authentic self, the, 5
automatic learned behavior, 27
automatic thinking, intentional system and changing, 26
autopilot system and intentional system,
differences between the, 25–26
autopilot system, 24
addressing the, 31
reacting with your, 33
relying on the, 97
tasks and your, 70
autopilot system errors and cognitive biases, 29
bankruptcy, avoiding the causes of, 11
Barings Bank, bankruptcy of, 94–95
base rate probability, 83
evaluating new evidence with, 34
Bayes, Reverend Thomas, 33
Bayesian reasoning, 33
behavior, attributing a situation to, 71
behavior and negative personality traits, 79
behaviors, misattributing problematic group, 76
behaviors and your gut reaction, 27
Berkshire Hathaway, 137
Best Buy, success of, 147
bets, the effectiveness of making, 35–36
Better Business Bureau, 41
bias,
omission, 141
optimism and pessimism, 124
biased mental patterns, advisers and, 17
bikeshedding, 142, 143, 151, 170
body awareness, focusing on, 60
Brandenburg Willy Brandt Airport, cost
breathing, focusing on your, 59–60
business, working on your, 138–139
business decision-making, luck and, 145
business decision-making and cognitive
biases, 18
business decisions,
improving your, 30
situations that lead to bad, 21
business problems and cognitive bias, 9
business strategic assessments, flaws of, 6
career problems and cognitive bias, 9
change efforts and status quo bias, 53–54
checklists, creating, 40
Circuit City, 151
failure of, 147
cognitive bias, 8
attention-related, 149
dangerous, 10
problems in business and, 9
cognitive bias
and mindfulness meditation, 59–60
addressing, 39
business decision-making and, 18
categories of, 29
debiasing, 30
judgment errors and, 159
loss aversion-related, 65
mental processing capacities and, 29
commitments, public nature of, 41
confidence,
balancing humility and, 110
internal, 110
confirmation biases, avoiding, 94
conflicts and attentional bias, 133
connections, estimating the value of, 63
consideration of
alternative explanations, 81, 84, 97–98, 104, 153
alternative options, 81, 84, 97–98, 104, 153
alternative scenarios, 104, 153
long-term scenarios, 104
other people's perspectives, 100–101, 104–105, 124, 126
other people's points of view, 38–39, 81, 85
past experiences and the planning fallacy, 123
past experiences, 43, 61–62, 126, 151, 153
repeating scenarios, 104, 151–152, 153
the long-term future, 151–152, 153
constructive criticism, receiving, 23–24
correspondence bias, 71
counterintuitive behaviors, 7
daily habits and the autopilot system, 24
debiasing,
cognitive biases, 30
shifting your thinking and, 32–33
debiasing
and mindfulness meditation, 59
methods in the workplace, 31
decision disasters, questions to avoid, 16–17
decision-making,
implementing delayed, 43
probabilistic thinking and, 150
decision-making
and dangerous judgment errors, 146
and luck, 144
decision–making criteria,
developing clear, 14
options and your, 17
decision-making impulses, 8
decision-making model, eight-step, 13–15
decision-making outcomes, advisers and, 17
decision-making process, internal confidence and the, 110
decision-making strategy, adjustments to your, 52–53
decisions,
delaying your, 33
identifying the need for, 13
long-term consequences of, 38
long-term impact of, 38
decisions
and toxic cultures, 41
as repeating patterns, 64
delaying
decision-making, 60–61, 65, 84
ethnic, 83
visible, 96
Dunning-Kruger effect, 114
falling for the, 115
overconfidence and the, 125
protecting yourself from the, 122
effective tactical techniques, 21
egocentric bias, 175
eight-step decision-making model, 13–15
emails, delaying your response to, 39–40
emotional connections with colleagues, 102
emotions, underestimating the strength of, 78
emotions of colleagues, figuring out the, 102
employees and rumors, 95
envisioning your outcome, 17
Equifax security breach, 22
ethnic diversity, benefits of, 83
evaluating the implementation process, 15
evaluations, different types of, 166–167
evaluations and cognitive biases, 29
evidence,
finding alternative, 36
looking for the right, 16
experiences,
using past, 66
explanations, considering alternative, 36, 81, 84, 97–98
extended warranties, 56
external perspective,
using an outside view to get, 39
external perspective on situations, 81
Facebook, success of, 147
false consensus effect, 79, 80, 177
falsehoods, accurate statements and, 28
fight-flight-freeze defensive response, 77
fight-flight-freeze response, 24
activation of the, 33
financial incentives, lack of improvement from, 79
financial incentives for employees, 78
five questions to avoid decision disasters, 16–17
fundamental attribution error, 71, 72, 174
future, making predictions about the, 84, 126
gathering information, steps for, 16
gender diversity, benefits of, 83–84
goals,
deciding on your, 14
generating viable options and achieving, 14
Golden Rule, 38
Great Recession, devastation of the, 94
group affiliations, types of, 73
group attribution error, 73, 78
irrational behavior and, 74
group behaviors, misattributing problematic, 76
group belonging, 63
groups,
internal characteristics of, 76
problematic intentions and, 78
groupthink, 110
growth model, S-curve, 54
gut reaction, behaviors and your, 27
habitual instincts, changing your, 31
falling for the, 97
HCR ManorCare bankruptcy, 88–89
Heath, Chip, 26
Heath, Dan, 26
hindsight bias, 115–116, 123, 172
humility, 122
balancing confidence with, 110
hyperbolic discounting, 137, 141, 175
ideas, placing low value on, 58
identifying dangerous judgment errors, 31
ignoring negative information, 96
illusion of transparency, 121, 169
illusory superiority, 176
illusory truth bias, 173
illusory truth effect, 95
looking for evidence to fight the, 97
implementation,
options and, 17
implementation process, evaluating the, 15
individuals, placing low value on, 58
information,
gathering relevant, 14
ignoring negative, 96
sharing uncomfortable, 102
steps for gathering, 16
information bias, 54, 55, 176–177
innovation and the S-curve, 55
insurance coverage, 56
intentional system
and changing automatic thinking, 26
and rational thinking, 25
and the prefrontal cortex, 25
internal characteristics of groups, 76
internal confidence and the decision-making process, 110
intuition, snap judgments and, 24
intuitions,
fighting your, 40
transforming your, 31
intuitive aversion to losing resources, 52
investors, predictions of, 112
irrational behavior and group attribution error, 74
irrational behavior, cognitive biases and, 28
Jeni's Splendid Ice Cream,
considering past experiences and, 123–124
listeria recall of, 108–109, 111
JPMorgan Chase, 137
judgment errors,
addressing dangerous, 16, 31, 168
avoiding dangerous, 18
decision-making and dangerous, 146
identifying dangerous, 42–43, 158
intentional system and, 63
making predictions about the future and, 122–123
minimizing, 16
relationships and addressing, 84
the dangers of, 15
judgment errors
and applying your attention, 130
and cognitive biases, 159
and hyperbolic discounting, 137
judgments,
humility and making, 122
overconfidence effect and, 109
snap, 71
Kodak, bankruptcy of, 15
lateness, chronic, 37
letting go of thoughts, focusing on, 60
lies, detecting, 28
long-term consequences of decisions, 38
long-term future,
the ostrich effect and your, 100
long-term future scenarios,
considering, 104
evaluating, 38
implementing consideration of, 44
using, 66
long-term future scenarios and debiasing, 31
long-term impact of major decisions, 38
long-term planning and quarterly earnings, 137
long-term positive change, short-term profits and, 137
loss aversion–related cognitive biases, 65
recognizing the dangers of, 63
losses, avoiding, 52
luck
and business decision-making, 145
and decision-making, 144
and organizational settings, 145
making a precommitment, 105, 152, 154
making predictions about the future, 43, 100, 104, 122–123, 151, 153
mental errors, irrational behavior and, 28
mental errors and debiasing, 32–33
mental habits, building up, 30
mental processing capacities, cognitive biases and, 29
mere exposure effect, 95
mergers and acquisitions,
shareholder value and, 111–112
strategies for addressing, 124
the real value of, 90
micromanaging, avoiding, 7
mindfulness meditation, 33
implementing, 43
misattribution of problematic intentions, 78
misattributions, solving, 80–84
mistakes, unwillingness to admit, 90
making a precommitment and the, 101
MySpace, the failure of, 147
negative emotions, empowering strong, 31
negative information, ignoring, 96
negative personality traits and behavior, 79
negative reality, 93
negative teamwork dynamics, 75–76
next best alternatives, developing, 37
falling for the, 94
not invented here bias, 57–58, 172
office furnishings, loss aversion and, 56–57
optimism, calibrating, 123
optimism bias, 116–118, 124, 171
options,
considering alterative, 36–37, 81, 84, 97–98, 104, 153
expanding your range of, 36
implementing your, 15
weighing your, 14
options and implementation, 17
organization,
setting a policy for your future, 66, 125
setting policies that guide your, 39–40
organizational change and short-term planning, 137
organizational settings and luck, 145
organizations, placing low value on, 58
ostrich effect, 93, 94, 100, 175
outcome bias, 143–149, 175–176
overconfidence, 110–111, 113, 114
overconfidence
and other people's perspectives, 124
and external perspectives, 124–125
and probabilistic thinking, 122
and the illusion of transparency, 121
overconfidence bias, 169
overconfidence effect, 109, 113
Papa John's, 22
Pareto principle, 58
Parkinson's law of triviality, 142, 170
past experience, considering, 37–38, 66, 126, 153
past experiences and debiasing and, 31
personal recognition of employees, 78
personality, attributing a situation to, 71
perspectives,
considering other people's, 104–105
implementing consideration of other people's, 44
reflecting on other people's, 81
perspectives and debiasing, 31
pessimism, calibrating, 123
pessimism bias, 117–119, 124, 171
planning fallacy, 119–121, 169
planning fallacy and considering past experiences, 12
points of view, considering other people's, 38–39, 81, 85
positive reinforcement, colleagues and, 103
pragmatic dangers of loss aversion, 53–55
precommitment, making a, 40–41, 101, 105, 152, 153
precommitment
and debiasing, 31
precommitments, implementing, 44
predictions about the future, making, 35, 65–66, 84, 85
preexisting beliefs, information that confirms, 91–92
prefrontal cortex and intentional system, 25
prior probability, evaluating new evidence with, 34
Pro-Truth Pledge, 41
probabilistic thinking, 33, 61, 85, 98, 104, 153
attention judgment errors and, 150
debiasing and, 31
implementing, 43
key aspect of, 33
probabilistic thinking
and decision-making, 150
and overconfidence, 122
probabilistic thinking base rate approach, 100
probability,
problematic group behaviors, misattributing, 76
process, rewarding outcomes over, 144
halo effect and, 96
horns effect and, 96
public nature of commitments, 41
quantitative data, reliance on, 6
quarterly earnings and long-term planning, 137
quarterly earnings and short-term focus, 137
R&D and the S-curve, 55
rapport with colleagues, building, 102
rational thinking and the intentional system, 25
reaction, delaying your, 33
reality, denying negative, 93
relationships and addressing dangerous
judgment errors, 84
repeating patterns, decisions as, 64
repeating scenarios,
evaluating, 38
implementing consideration of, 44
the ostrich effect and your, 100
using, 66
rewarding outcomes over process, 144
risk, decisions that involve, 41–42
risks and rewards, patterns of, 50
rude behavior, circumstances of, 71
rumors, employees and, 95
S-curve
and innovation, 55
and R&D, 55
growth model, 54
sample size, probabilistic thinking and, 81–82
scenarios,
considering alternative, 104, 153
considering repeating, 104, 153
Schelling point, precommitments and a, 41–42
self-evaluations, 166
self-reflective goals, going against your, 27
fixing the problem of, 100–101
self, setting policies for your future, 39–40, 66, 125
shareholder value, mergers and acquisitions
short-term
focus and quarterly earnings, 137
short-term
planning and organizational change, 137
short-term profits, long-term positive change and, 137
situations, external perspective on, 81
snap judgments, the dangers of, 71
snap judgments
and intuition, 24
sports and the value of avoiding gut reactions, 6
status quo bias, 53–54, 55, 173
stereotyping and group attribution error, 73
stereotyping, different, 75
strategic assessments, flaws of, 6
strategic evaluations, 167
stress, decreasing, 12
stress and the autopilot system, 24
success, creating an appearance of, 90
sunk costs bias, 172
survivorship bias, 146–148, 149
sympathetic nervous system, cooling down the, 33
tactical evaluations, 167
tactical techniques, effective, 21
tasks and your autopilot system, 70
team conflict, optimism and pessimism bias and, 124
teams, placing low value on, 58
teamwork dynamics, negative, 75–76
technological disruption, increase in, 24–25
Tesla,
planning fallacy of, 120
SEC investigation of, 22
Time Warner, merger of, 15
toxic cultures and decisions, 41
tribal affiliation, your perception of, 96
Tyco accounting fraud, 89
typical mind fallacy, 177
ultimate attribution error, 76, 78
utilitarianism, 11
viable options, achieving your goals and
generating, 14
visible diversity, 96
Volkswagen, 81, 89, 90, 92, 100
WorldCom accounting fraud, 89