Decision Making

Risk management failures often stem from flawed thinking. History is full of examples where cognitive biases led to catastrophic misjudgements. For example, during the 2008 financial crisis, confirmation bias led many investors and financial institutions to downplay warning signs of an unsustainable housing bubble, focusing only on data that supported continued growth while dismissing contradictory evidence. Similarly, overconfidence bias contributed to excessive risk-taking at firms like Lehman Brothers, where executives underestimated exposure to market downturns. ...

A management technique that encourages open debate but demands unity in execution, preventing decision paralysis and keeping organisations moving forward. What is Disagree and Commit ? Disagree and commit is a management principle that encourages open debate, while ensuring alignment once a decision has been made. It allows individuals to voice dissent during deliberations but requires full commitment to execution afterward. Notably, the phrase has been incorporated into Amazon’s leadership principles to mitigate decision paralysis. ...

The consensus trap occurs when decision-making is stalled by the pursuit of unanimous agreement. While seeking input and alignment is valuable and at times essential, excessive focus on consensus can lead to wrong decisions, delays, weak compromises, or complete inaction altogether. When organisations prioritise harmony over progress, they risk avoiding hard but necessary choices. This is particularly problematic in fast-moving environments where decisive action is critical. How to avoid the consensus trap The principle of disagree and commit helps counteract this by allowing debate during deliberation but requiring commitment once a decision is made. Strong leaders will encourage diverse perspectives, while ensuring execution isn’t stalled by lack of full agreement. ...