The authors, brothers Chip & Dan Heath, use the visual metaphor of a spotlight on stage to characterise how human beings tend to make decisions - 'what you see is all there is'. The flaw of course is that the broader landscape outside and beyond the sharp relief within the spotlight is obscured.
The Heaths tell us that bad decisions are all too common in business and personal decision making. 40% of senior hires by companies don’t work out within 18 months, 83% of mergers don’t create value for shareholders, and individuals repeatedly make bad investment and relationship choices. In short, our brains are not wired for optimal decision making.
The 4 villains of decision making
In considering why we tend to make poor decisions, the authors identify four flaws that typically spoil our decision making processes.
- Narrow framing - the tendency to see choices in binary, either/or terms
- Confirmation bias - using data to support what you believe
- Short term perspective - rather than asking 'what would our successors do?'
- Over-confidence - people tend to think they know more than they actually do about how the future will unfold
The WRAP model for strategic decision making
The Heath brothers offer a four step model that avoids the traps listed above that predispose us to making poor decisions. Instead, the acronym WRAP model is a four step process that optimises your chances of achieving a good outcome.
Widen your options - consider more than just two alternatives
Reality-test your assumptions - for instance, try 'piloting' a decision, trying it out in small doses to see what it's like
Attain distance before deciding - take time to remove immediate emotion from the decision, or use the 10/10/10 rule - how will you feel about this choice in 10 minutes/10 months/10 years?
Prepare to be wrong - to minimise the damage of making a wrong choice, set a 'tripwire', something that will alert you to things going off track before too much damage has been done (e.g. the band Van Halen hid within their set-up list for venues the stipulation of no brown M&Ms backstage so that if the offending sweets did show up, they knew their spec had not been carefully read and to check for other technical issues, whereas if there were no brown M&Ms in evidence, they could be confident that their requirements had been noted)
"Whenever you see a successful business, someone once made a courageous decision."Peter Drucker