The Big Idea: Before You Make That Big Decision…

Thanks to a slew of popular new books, many executives today realize how biases can distort reasoning in business.  Confirmation bias leads people to ignore evidence that contradicts their preconceived notions.  Anchoring causes them to weigh one piece of information too heavily in making decisions.  Loss aversion makes them too cautious. Taking proactive steps to reduce bias makes a difference.  A recent McKinsey study of more than 1,000 major business investments showed that when organizations worked at reducing the effect of bias in their decision-making processes, they achieved returns up to seven percentage points higher. In “The Big Idea:  Before You Make That Big Decision…,” in the June 2011 Harvard Business Review, the authors explain how to detect these biases...

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