Reducing errors in judgement requires a disciplined process. All strategic decisions share a common feature: they are evaluative judgments.  To make such tough calls, people must boil down a large amount of complex information. Strategic decisions tend to involve the distillation of complexity into a single path forward.

Given how unreliable human judgement is, all evaluations are susceptible to errors that may come from known cognitive biases or random errors, sometimes called noise. Unreliability in judgement has long been recognised and studied, particularly in the context of decision-making about hiring. 

Researchers drew inspiration from that body of research and experience to suggest a practical, broadly applicable approach to reducing errors in strategic decision-making. Researchers call it the Mediating Assessments Protocol (MAP). MAP is a structured approach to grounding strategic decisions, like structured interviews, in mediating assessments. It has three core elements:

Define the assessments in advance

The decision maker must identify a handful of mediating assessments, that is, key attributes that are critical to the evaluation. In the decision to acquire a company, for example, the assessments could include anticipated revenue synergies or qualifications of the management team. This process is similar to one a hiring committee would follow when creating a job description that outlines the attributes required for success in the position.

Use fact-based, independently made assessments 

People who weigh in on one aspect of a strategic option should not be influenced by one another or by other dimensions of the option. Their opinions should be grounded in the evidence available. 

This approach is comparable to a well–organised structured interview process, in which job seekers are scored on each key attribute solely on the basis of their answers to relevant questions, calibrated using predefined scales.

Make the final evaluation when the mediating assessments are complete

Unless a dealbreaker fact is uncovered (for instance, evidence of accounting fraud at the acquisition target), the final decision should be discussed only when all key attributes have been scored and a complete profile of assessments is available. 

This is similar to having a hiring committee review all the evaluations made by each interviewer on each key requirement of the job description before making a decision on a candidate. The use of mediating assessments reduces variability in decision-making because it seeks to address the limitations of mental model formation, even though it cannot eliminate them entirely. 

By delineating the assessments clearly and in a fact based, independent manner, and delaying final judgement until all assessments are finished, MAP tempers the effects of bias and increases the transparency of the process, as all the assessments are presented at one time to all decision makers. 

For example, because salient or recent pieces of information are not given undue weight, the process preempts the availability bias.  MAP also reduces the risk that a solution will be judged by its similarity with known categories or stereotypes (an error arising from the representativeness bias). When differentiated, independent facts are clearly laid out, logical errors are less likely. 

Some decision makers will have an initial dislike for MAP, just as many recruiters still resist structured interviewing. Structured decision making, based on mediating assessments, will be adopted only if it is viewed as offering a substantial improvement in decision-making quality. Accordingly, we next examine MAP’s application and benefits in two types of strategy decisions: large one-off decisions made by teams of executives or directors, and recurrent decisions made as part of formalised processes that, in aggregate, shape a company’s strategy.

Most companies still use traditional, unstructured interviews to make a global evaluation. The interviewer accumulates information about the candidate and then reaches a conclusion. Unfortunately, a vast amount of evidence indicates that unstructured interviews lead to biased evaluations that have very little predictive value. It occurs because the interviewer usually forms a mental model of a candidate, a process that psychologists have shown has three specific limitations:

Excessive coherence

Mental models are usually simpler and more coherent than the reality they aim to assess. As interviewers, if we assume, for instance, that a particular candidate is an extrovert, we tend to ask questions that confirm this hypothesis.

A “quick and sticky” quality

We form our mental models rapidly, often on the basis of limited evidence at the start of the process, and we alter our models slowly as new facts emerge. That explains why, as common sense would suggest (and research has confirmed), first impressions have a disproportionate effect on the assessments we make of people in general and on the outcome of job interviews.

Biased weighting

Our mental models often don’t give each pertinent fact the weight it deserves. We may discount important bits of information or, in contrast, give great weight to factors that should be entirely irrelevant. For example, an interviewer may wrongly perceive that a male candidate has great leadership qualities just because he is tall and has a deep voice. For those reasons, we do not expect all interviewers to agree on one candidate and we often compensate by averaging several interviewers’ viewpoints.

Dozens of studies on personnel selection have shown conclusively that decisions are more accurate when interviews are structured rather than unstructured. Therefore, a growing number of organisations, especially those that put a high premium on the quality of the talent they hire, have adopted structured interviews.

In a structured interview, the interviewer must rate several key traits before making a final evaluation. Scores on each attribute serve as mediating assessments: intermediary ratings, produced in a predetermined, standardised manner in order to be as fact-based as possible. The final evaluations are then derived from these ratings.

An early form of structured interviewing was developed in 1956 by Daniel Kahneman while he served in the Israeli Army, where he observed that holistic ratings given by interviewers were poor predictors of the future success of recruits. 

He replaced these ratings with separate scores on six attributes: sense of duty, sociability, energy level, punctuality, capacity for independent thought, and what was then called “masculine pride.” 

A simple average of these scores proved to predict overall performance more accurately than did an intuitive evaluation based on an unstructured interview. An intuitive prediction made after these separate structured interview ratings were assigned was also useful. The combination of the two was the best performance predictor of all.

Adapted from “A Structured Approach to Strategic Decisions” BY DANIEL KAHNEMAN, DAN LOVALLO, AND

Do you ever consider that most people at work are doing a second job that no one’s paying them to do? A job that includes preserving their reputations, putting their best selves forward and hiding their inadequacies?

Robert Kegan, Lisa Lahey, Andy Fleming and Matthew Miller, the authors of this research, believe that this could be the biggest cause of wasted resources in nearly every company today. 

Most people expend a lot of energy at work attempting to hide their inadequacies from colleagues.  But what if companies instead created a culture in which people could see their mistakes not as vulnerabilities but as prime opportunities for personal growth?

What if a company was set up in such a way that instead of hiding their weaknesses, employees used them as opportunities for both personal and business growth?

Researchers suggest that it’s possible to meld business growth with personal growth in every employee’s day-to-day work. Researchers found only a handful of firms where people see their mistakes not as vulnerabilities but as prime opportunities for growth.

Two stood out: Bridgewater Associates, an East Coast investment firm and the Decurion Corporation, a West Coast real estate manager, cinema operator, and senior living centre owner. Both companies are committed to developing every one of their people by weaving personal growth into daily work and both are highly successful businesses. The authors spent hundreds of hours observing their practices and interviewing employees at all levels. 

What they saw was people working together, in meetings, in one-on-one sessions, and in the course of their everyday work, to get at the root causes of problems and devise more productive ways of doing things. 

Many companies conduct root cause analysis but stop short of crossing into an employee’s interior world, where so many problems begin; for example, a tendency to avoid confrontation, to act before thinking things through, to be overly aggressive if one’s ideas are criticised, and other counterproductive thinking and behaviour. If you are a leader who wants to build a DDO, you should understand that you can’t want it just for the company.

You must want it for yourself. You must be prepared to participate fully and even go first in making your own limitations public. You must also not just want it to generate extraordinary business results. You must put equal value on leading a company that contributes to the flourishing of its people as an end in itself. 

At Decurion and Bridgewater, everyone from the CEOs on down to the teenage ushers works on identifying and overcoming these patterns as part of doing the job well.

Adapted from “Making Business Personal” by Robert Kegan, Lisa Lahey, Andy Fleming and Matthew Miller – HBR 201404

Human resource leaders commonly assume that for a company to stand out as a great place to work, it must deliver competitive material benefits. 

However, new research finds that this view is outdated: engagement and retention don’t correlate with benefits because nowadays employees look beyond material offerings and instead they assess how they feel about the company they work for. Fortune 500 companies spend more on benefits and perks than ever, almost $2,500 a year per employee, on average.

But a study by the research and advisory firm Gartner, comprising global surveys of 5,000 employees and more than 150 HR leaders, reveals that employee engagement has been flat since 2016.

Carolina Valencia, a vice president in Gartner’s HR practice and one of the study’s authors says “Companies have been engaged in an arms race to offer the best perks. But once basic needs are met, people are more powerfully motivated by feelings than by material features. Employees today want to be treated as people, not just workers.”

Benefits managers should change their approach in order to offer a human deal that will make workers feel valued, supported and cared for financially, physically and emotionally.  Researchers suggest following this advices:

Connecting with employees’ lives outside work.

Companies usually don’t care about employees’ non-work issues, in part because of privacy concerns, but researchers underline that the boundaries have blurred during the pandemic so workers don’t pretend that their work lives and outside lives are separate. 

Ensuring autonomy

Many organisations allow remote work at least some of the time. But they should go further, aiming for radical flexibility in which employees ideally decide with whom, on what, and how much to work.  Far from providing cover for loafers, Gartner finds, the adoption of radical flexibility raises the number of employees defined as high-performing by 40%.

Promoting personal growth

Most organisations offer programs to foster professional growth. But employees want opportunities for personal growth as well, such as career coaching, community service or language lessons. 

Instilling shared purpose

Employees want to feel invested in their organisation’s purpose, including the ways in which it interacts with the larger world. Leaders may hesitate to highlight their activism for fear of alienating employees with dissimilar views, but such concerns appear to be overblown. Research says that workers prefer their leaders to take a stand on societal issues they care about. Researchers also suggest instituting regular meetings to discuss emerging issues with the whole company.

Providing holistic well-being offerings and helping people use them

Most large firms offer a variety of well-being programs but few employees take advantage of them because needs change from person to person and over time.  Companies could encourage employees to assess their well-being and talk candidly about mental health and provide managers with a direction to follow.

Adapted from “Rethinking Your Approach to the Employee Experience” – Harvard Business Review 202202