Executives Weigh In on Frequency of Good Decisions: Results are Alarming

Here’s a scary reality: only 28% of executives report that their companies make good strategic decisions.

These results come from a study McKinsey featured in one of their latest quarterly publications.

To reach these conclusions McKinsey surveyed over 2,000 executives and studied over 1,000 decisions made by companies. Their analysis attributes the problem to two key problem areas: a lack of process & biases.

Intuition might suggest that analysis is the most important factor in decision making but the process was found to be more important by a factor of six! Why? A process gives you a structured way to gather information, perform the analysis and decide how to take action. Furthermore, having the right process in place will help ward off biases.

My advice? ACT RED.

ACT RED is an approach to critical thinking that encompasses Pearson’s RED Model. More specifically, it’s an acronym that provides a road map to think critically.

Here are the basics you need to know about how to ACT RED:

The end goal is always to act:

Asses the situation, Critically think (using the RED Model) and then Take action.

But in order to act you’ve got to critically think and The RED Model is a great tool to help you:

• Recognize assumptions
  • Consider the relevance
  • Distinguish fact from opinion
  • Seek alternative view points
• Evaluate the arguments (ß this is how the process helps combats biases!)
  • Be aware of persuasion techniques
  • Recognize biases
  • Check strong emotions
• Draw conclusions
  • Weigh the data carefully
  • Use multiple sources
  • Ask others to critique
  • Diagram for understanding

Editor’s Note: This is a guest post by Elizabeth Pauker-Silva