The Four Villains of Decision Making
Four common cognitive biases—narrow framing, confirmation bias, short-term emotion, and overconfidence—undermine decision quality. The WRAP process helps overcome them by widening options, reality-testing assumptions, attaining distance, and preparing to be wrong.
THE IDEA
The Four Villains of Decision Making
- Danny Kahneman: “A remarkable aspect of your mental life is that you are rarely stumped.”
- Should Shannon fire Clive? We form opinions effortlessly.
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What’s in our spotlight = the most accessible information + our interpretation of that information. But that will rarely be all that we need to make a good decision.
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Our decision “track record” isn’t great. Intuition and rigorous analysis can still leave these biases unaddressed. A decision process can help us check them.
- Study: “Process mattered more than analysis—by a factor of six.”
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We can address the four villains by learning to shift our attention.
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Villain 1: Narrow framing (unduly limiting the options we consider)
- HopeLab had five firms work simultaneously on stage 1; “Can I do this AND that?”
- Villain 2: The confirmation bias (seeking out information that bolsters our beliefs)
- The tone-deaf American Idol contestant …
- Lovallo: “Confirmation bias is probably the single biggest problem in business.”
- Villain 3: Short-term emotion (being swayed by emotions that will fade)
- Intel’s Andy Grove got distance by asking, “What would our successors do?”
- Villain 4: Overconfidence (having too much faith in our predictions)
- “Four-piece groups with guitars, particularly, are finished.”
- A pros-and-cons list can leave these problems intact. WRAP adds steps intended to address them.
- The authors use Joseph Priestley to illustrate this approach.
- To make better decisions, use the WRAP process:
- Widen Your Options.
- Reality-Test Your Assumptions.
- Attain Distance Before Deciding.
- Prepare to Be Wrong.
When to use it
Deciding whether to fire an employee: avoid narrow framing by considering alternatives like coaching or reassignment.
Making a business strategy: reality-test assumptions by actively seeking disconfirming evidence.
Personal finance decision: attain distance by imagining what you would advise a friend in the same situation.
Career change: prepare to be wrong by outlining multiple possible outcomes and contingency plans.
FROM THEORY TO EVERYDAY LIFE
In practice
HopeLab's Approach to Narrow Framing
HopeLab had five firms work simultaneously on stage 1; they asked 'Can I do this AND that?' instead of 'Can I do this OR that?'
Tone-Deaf American Idol Contestant
Example of confirmation bias: the contestant believes they are good despite overwhelming evidence to the contrary.
Andy Grove's Distancing Question
Intel’s Andy Grove asked 'What would our successors do?' to attain distance from short-term emotions and gain perspective.
Overconfidence in Music Trends
The prediction that 'Four-piece groups with guitars, particularly, are finished' illustrates overconfidence about future music trends.
Joseph Priestley's Discovery
The authors present Priestley’s work on oxygen (or 'more breathable air') as an example of a disciplined decision process. The outline mentions the case without describing its steps.
A MOMENT TO REFLECT
Put it to work.
Think of a recent decision you made. Which of the four villains most influenced your thinking?
How could you have widened your options before making a key decision?
When have short-term emotions swayed a decision? What would your successor have recommended?
CONTINUE THE CONVERSATION
Source texts
- Decisive How to Make Better Choices in Life and Work (Chip Heath)