In a world where the pace of change and the complexity of challenges are ever-increasing, leaders are consistently tasked with making decisions that impact not only their organizations but also the people within them. Effective decision-making is crucial, yet many leaders rely on intuition or “gut feelings” rather than informed, evidence-based approaches. This reliance can lead to significant pitfalls and missed opportunities. This episode dismantles the myth of intuitive decision-making, illustrating why leaders should avoid going with their gut and instead employ strategies grounded in cognitive neuroscience and behavioral economics. Unpacking topics such as organizational tribalism, cognitive biases, and the dangers of unchecked intuition, this episode offers actionable strategies for leaders to improve their decision-making processes.
Meet Gleb
Dr. Gleb Tsipursky is a cognitive neuroscientist and expert on behavioral economics and decision making. As CEO of Disaster Avoidance Experts, he spent over two decades consulting, coaching, speaking and training hundreds of clients across North America, Europe, and Australia, including Aflac, IBM, Honda, Wells Fargo, and the World Wildlife Fund. With over 15 years in academia, including 7 as a professor at Ohio State University, he published dozens of peer-reviewed pieces in academic journals such as Behavior and Social Issues and the Journal of Social and Political Psychology. His thought leadership is featured in Fast Company, CBS News, Time, CNBC, Inc Magazine, and elsewhere.
Timestamped Overview
During this episode, Gleb and I discuss the following topics:
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[00:00:00] Introduction to Decision Making: The importance of leaders making informed decisions rather than relying on gut instincts.
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[00:01:48] Gleb Tsipursky’s Background: Insights into Gleb’s expertise in cognitive neuroscience and decision-making.
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[00:03:17] Why Intuition Can Lead to Poor Decisions: Discussion on the pitfalls of relying on gut instincts in leadership roles.
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[00:08:07] Evoutionary Background: Explanation of how our instincts are not evolved for today’s business environment.
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[00:11:02] Organizational Tribalism: Exploring the impact of tribalism on organizational culture and decision-making.
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[00:16:04] Cognitive Biases and Leadership: Identifying common cognitive biases and their effects on decision-making.
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[00:25:06] Tools for Better Decision Making: Strategies to overcome biases and improve decision processes.
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[00:31:12] Effective Decision-Making Techniques: Tools and techniques leaders can use to make better decisions.
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[00:44:33] Final Thoughts on Decision Making: Importance of wise decision-making in leadership and organizations.
Guest Resources
If you are interested in learning more about Gleb and his resources be sure to check out the following links:
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Scott McCarthy
Transcript
The following is an AI generated transcript which should be used for reference purposes only. It has not been verified or edited to reflect what was actually said in the podcast episode.
Scott McCarthy [00:00:00]:
Decision making is the task which leaders are tasked with the most during their day. Unfortunately, most leaders are not trained how to properly make decisions and therefore end up simply going with their gut and not necessarily making an informed decision. Therefore, as leaders, you should never go with your gut, but learn how to make proper decisions. Today, my guest, Gleb, and I discuss why leaders should avoid their gut instincts, why the head is more important, the important aspects of organizational tribalism, how to look at situation through different lenses, amongst many other topics. Ladies and gentlemen, welcome to the Moving Forward Leadership podcast, episode 98, never go with your cup with doctor Gleb Sapursky. Welcome, Ward. Welcome all to the Moving Forward Leadership podcast. It’s chief leadership officer, Scott McCarthy, And thanks for tuning in.
Scott McCarthy [00:01:05]:
Thanks for tuning into this podcast all about you, helping you become a better leader. And that’s whether it’s yourself, your team, or your organization. Here, you’re gonna learn how to lead those three aspects better every day. And today, we’re talking about the, oh, epically important concept of decision making. And as decision making, you as the leader, you need to learn how to make better decisions. And that’s why I brought in doctor Superski because he’s a cognitive neuroscience. So he’s a expert on behavior, economics, and decision making. This is where he actually done his PhD.
Scott McCarthy [00:01:48]:
So you can’t find a better person out there. He’s the CEO of Disaster Avoidance Experts, and he’s spent over two decades, over twenty years consulting, coaching, speaking, and training hundreds of clients across the world, across big companies like IBM, Honda, Wells Fargo, etcetera in decision making. So today, we talk about his book, Never Go With Your Gut, and the whole principles behind it. It’s a great show, folks. It’s definitely an eye opener. So why don’t you sit back, relax, and enjoy my interview with doctor Gleb Sapursky, all about why you should never go with your gut.
Gleb Tsipursky [00:02:37]:
Well, man, welcome to the podcast. It’s great to have you here tonight.
Gleb Tsipursky [00:02:40]:
Thanks so much for bringing me on, Scott. It’s a pleasure.
Gleb Tsipursky [00:02:43]:
So I got a copy of your book here, Never Go With Your Gut. I was interested from as soon as I got the email about it because it’s it’s funny because you hear leaders out there and especially in the business world, you hear of the biggest business guys ranting and raving about intuition and going with gut instincts and making decisions, but your whole book is premised around not doing that. So I guess my first question with the show is, you know, why should leaders avoid their gut instincts in the first place?
Gleb Tsipursky [00:03:17]:
Well, if we look at the ways that gut instincts bring leaders down, we’ll see that it’s a serious problem. And why do our gut instincts bring us down? Well, give me let me give you a couple of examples. Let’s start with small businesses. Look at small businesses. Within five years, according to small business administration here in The US, probably similar in Canada, about half of all small businesses fail. Within ten years, most small businesses fail, you know, a lot more because of bad decisions by their leadership. If you look at so it’s kind of like one end of the spectrum. Now let’s look at the largest, bigger end of the spectrum.
Gleb Tsipursky [00:03:56]:
There was a study of the largest companies that went bankrupt of large companies that went bankrupt in The US from 1981 to 02/2007. So right before the financial crisis, the great recession, so it just kind of stopped there. Looked at companies that were worth over 500,000,000 that went bankrupt. And what it found was that these companies, huge companies, actually went bankrupt. Forty six percent of the reason for forty six percent of the companies went bankrupt solely due to a really bad decision making by the leadership. The really bad strategic decision making by the top leadership led to the bankruptcy of forty six percent of these companies. So 46 that’s, you know, just about half. Now for the large majority of the rest, better decision making by the leadership would have likely prevented bankruptcy.
Gleb Tsipursky [00:04:44]:
So it was a component, a significant component, you know, not the whole story. So we see that leaders can make the top biggest companies or the smallest companies can make some pretty bad decisions when they go with their gut. And they trust their gut. Leaders tend to trust their gut too much partially because they’ve never been taught to do anything different. We have no education. We have no professional development in decision making, really. Like, if you go to any MBA program, you’ll see, you know, courses on economics, supply and demand, you know, macroeconomics, microeconomics. You won’t see courses on how we should make decisions effectively.
Gleb Tsipursky [00:05:22]:
That’s not kind of part of what the people are teaching. If you look at how people who haven’t don’t have an MBA, who they just get training on a job, they don’t get to taught how to make decisions. They just go ahead and do it. And, you know, somehow sometimes it works, sometimes it doesn’t. It’s a really terrible approach to decision making, and we suffer greatly because of it. We, individually, our careers the careers of leaders, individuals, professionals suffers greatly because of these poor decisions as well as the businesses. They suffer greatly because of these poor decisions. So So whenever somebody says, you know, go with your gut, it makes me really pissed to to hear that because it’s such bad advice.
Gleb Tsipursky [00:06:03]:
It’s horrible advice. And people just follow it, and they just follow it because they don’t have a better way. And I’m here to say that that’s really not good, and we need to have actually evidence based business decisions as opposed to, you know, right now, just intuitive based decisions.
Gleb Tsipursky [00:06:21]:
I I will back up some of your statements, especially with the MBA one. I do have the MBA, and I had absolutely nothing on leadership, nothing on decision making. There was some management one zero one type stuff. But, again, it was more along the lines of organizational theory, organizational design, not necessarily how you’re actually gonna run your organization. So I do like where we’re going with this conversation because I am actually more along the lines of the analysis, the statistics, looking at the the actual information, and making informed decisions. So with that, what I’m hearing from you is, you know, making decisions with your head is more important. So why don’t we go down that route and explain why that is to listener there?
Gleb Tsipursky [00:07:06]:
Sure. Just to and I wanna talk a little bit later about information because we tend to trust information too much and trust our intuitions around information. So that’s an important nuance. We don’t want to just say this is the data, and I’ll go with it, partially because of the dangerous judgment errors in our minds that cause us to make bad decisions about it. But let’s flag that for now. Now why do we want to look use our heads as opposed to simply trusting our guts and going with our gut? Because our gut is actually not evolved for the current business environment. It’s fascinating when we think about what are our instincts evolved for. Our instincts are the same primitive instincts, the same gut intuitions that we had as babies.
Gleb Tsipursky [00:07:48]:
Those are the same instincts. You have gut intuitions. They’re the natural thing that that that comes without any layer of civilization. It’s just natural primitive urges. That’s what the gut intuition is about. That’s what the instincts are about. And they are not adapted to the modern business environment. That’s not what they’re evolved for.
Gleb Tsipursky [00:08:07]:
The modern business environment has been around only since World War two. What they’re evolved for is the Santa Ana environment, when more hunters and gatherers and foragers lived in small tribes of, you know, 15 people to a 50 people maximum. So that’s the tribal response. So one of our two fundamental drivers of our instincts, of our intuitions is tribalism. There are two components to tribalism. One is we like people who look like us, think like us, have our beliefs, have our perceptions, have our feelings, values, and we don’t like people who don’t. That’s try that’s one aspect of tribalism, and that causes a lot of problems in business. We can talk about that later.
Gleb Tsipursky [00:08:49]:
Another aspect of tribalism that causes huge problems in business is our desire to climb to the top of the social hierarchy even at the expense of the bottom line of the company. That’s the internal politics that cause a lot of problems and a lot of external decision making that leads to really huge problems for a company. We can talk about companies like WeWork where Adam Neumann blew a whole huge anyway, we can talk about that too. So that’s tribalism. That’s one thing. The other thing that’s really bad about those savage, natural, intuitive gut reactions is the fight or flight response. That’s the second big component that comes from our from our savage background, our savanna background. Our ancestors succeeded because they and produced us, their descendants, because they were able to jump at a hundred shadows very aggressively, very quickly, and, you know, have the fight or flight, and they were able to escape from the saber toothed tiger or fight opposing tribal members, which that was really important for them to survive.
Gleb Tsipursky [00:09:55]:
In our current environment, we don’t have nearly so many dangerous threats to our survival. Our business environment is not about these immediate threats, but we need to respond quickly, immediately with aggression or flight. We need to think things through and analyze things from the smallest thing, like you get, some constructive critical feedback from a customer. What are you gonna do? You’re gonna fight them? You’re gonna say, no. You’re wrong. You’re gonna flee. You can kind of ignore it. A lot of people, unfortunately, who don’t have much business experience do that.
Gleb Tsipursky [00:10:28]:
They tell customers that, hey. You’re completely off. I’m I’m awesome, or they flee from the information ignored. Of course, seasoned business leaders, seasoned professionals know that that’s a really bad approach to critical, constructive customer feedback. But we had to train ourselves. We don’t we’re not taking the natural intuitive route, which is the fight or flight. We have to train ourselves to take constructive critical feedback, whether it’s from clients, whether it’s from supervisors, whether it’s from peers. And that’s just one example of where we have to do very intuitive things going against our intuition to succeed in business.
Gleb Tsipursky [00:11:02]:
So that’s kind of why it’s very dangerous to trust your gut impulses. And instead, it’s very important to check with your head before deciding whether to follow a gut impulse or not.
Gleb Tsipursky [00:11:15]:
You’ve mentioned a lot of things in there, and one that definitely stuck out, was of interest in mine is one that you said that we can go back to. So I wanna go back to in this, you know, organ I’ll call organizational tribalism. I wanna call it business tribalism because we reach out to people outside or even outside of the business community. Yes. We have a lot of business listeners there, but, you know, I’ll call it organizational tribalism because it still it still exists. Believe me. I see it in the Canadian military too.
Gleb Tsipursky [00:11:41]:
Of course. And we have I’ve worked to I’ve worked with the military, and I’ve seen it really especially between different military branches.
Gleb Tsipursky [00:11:48]:
Yep. Yep. Branches, occupations, etcetera, etcetera. So why don’t we go down that road? So what is tribalism? How does it occur? How does it form? And and why is it so detrimental to to the effect efficacy of an organization?
Gleb Tsipursky [00:12:06]:
So we talked a little bit about why tribalism forms. It’s part of our natural instincts, our natural intuitions. If you look at again, let’s go to babies. They are the ones who are the the easiest examples of who, are where our instincts come from. If you look at a baby that go that looks at another baby that looks like it or that likes the same things that it likes, it will like that baby. It will want to play with that baby. If it if another baby looks like it doesn’t like the same toys that this baby does, this the baby will not like that baby. So it’s kind of like that is inborn in us.
Gleb Tsipursky [00:12:41]:
That is an instinct. That’s an intuition to like people who look like us, who we perceive, who think like us, who like the same things we like. We perceive these people to be part of our tribe. So that is something that was really important for us in the savanna environment to survive. If we were thrown out of our tribe, we would be we would not survive. We would die. So that was really bad. So we have these strong instincts.
Gleb Tsipursky [00:13:04]:
Now how that plays out in organizations is quite problematically in many ways. So you probably heard about, the value of teamwork where people say, hey. Teamwork is great. Teamwork is awesome. Unfortunately, they don’t talk about the negatives of teamwork. I would did a contract for a company that managed so I’m a consultant coach trainer on these topics. I’m also a cognitive neuroscientist and behavioral economist who researches these topics. So I do consulting, coaching, and training.
Gleb Tsipursky [00:13:34]:
And one of my consulting clients is a company that manages housing associations. And the company actually grew very fast through mergers and acquisitions, and it had a central office, and it had branch offices. The central office is responsible for managing finances and all that good back end stuff. The regional offices are responsible for client relationships, sales, and so on. So what happened there was that there was a strong sense of teamwork among the people in the central office and a strong sense of teamwork among people in the regional offices. And they often clashed because the finances people often wanted policies to be very strict, whereas the regional people in the regional offices who are responsible for sales and customer service wanted to adapt policies to the needs of the customers. And so they had the strong sense of teamwork within each one that resulted in big, big clashes between them where they wrote you know, they ended up writing nasty emails to each other using all caps and criticizing each other, cc’ing the CEO. And, I mean, the CEO had to get involved a bunch of times to address that.
Gleb Tsipursky [00:14:41]:
So, yeah, that’s an area that I worked on at resolving the kind of tensions that they were experiencing because of this teamwork that’s another word for tribalism, you know, their tribe that had really negative consequences within the company. So that’s another that’s one example of really problematic consequences within a company of tribalism.
Gleb Tsipursky [00:15:04]:
No. Yeah, I could definitely see how that would be a negative consequences for sure. Like and and I can see the problems there. And, ultimately, it’s bugging the leader down. Right? It’s bugging it’s bugging the leader down in in the ability to to build the team the team, but at the strategic level building the team because all of a sudden you got a us and them mentality that’s breeding within your organization. And that leader may come from one of those two sides, and all suddenly, they are actually biased in how they look at Mhmm. The situation and may make a decision in the wrong way. And I think we’re kinda jumping ahead here in your book because you talk about in your book looking at situations through different glasses or different lenses.
Gleb Tsipursky [00:15:49]:
So I think this is actually a good dovetail into that discussion because how can leaders ensure that they don’t become biased, that they do look at a situation holistically and use the proper lens or glass for it?
Gleb Tsipursky [00:16:04]:
Well, there are a whole bunch of techniques that are discussed in my book, Never Go With Your Gut, How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters. But let’s talk about what you just said. One of the techniques is considering other people’s perspectives. We don’t tend to consider other people’s perspectives nearly enough. We have we suffer from a cognitive bias known as the false consensus effect. Now the false consensus effect is one of many cognitive biases, and cognitive biases are the dangerous judgment errors that we make because of how our brain is wired, which comes in part from the our evolutionary psychology, of course, from the how we evolved. It comes in part from limitations due to the structure of the brain, how we process information. So these are cognitive biases.
Gleb Tsipursky [00:16:48]:
There are over a hundred of them. You can look them up on Wikipedia, a good source. Doesn’t talk about them in business settings just because has dry information about them. My book looks at the 30 most dangerous ones for businesses and describes how to address them thoroughly each one. So one of the ways to address these cognitive biases is to understand that there’s one of these biases called the false consensus effect where we tend to think that other people think in the same ways that we do. Again, we that other people think in the same ways that we do, hold our beliefs much more than they actually do. So we make serious mistakes about other people, about their beliefs of I’ll give you another example that has to do with generational differences. Right now, there are a lot of people who are coming to the workforce who are digital natives.
Gleb Tsipursky [00:17:38]:
And, unfortunately, senior leaders, people the baby boomers, generation x, and so on, or senior leaders will be baby boomers. They tend to perceive these people who are coming, these young people, as younger versions of themselves. So they imagine, hey. What was I like at, you know, 22? And they think, oh, that must be what this person is doing, what this person is feeling, what this person is going for. And, unfortunately, that’s not the case. A lot of research about young people right now show that people who are digital natives have some significant differences from what the young people were the way back when in the fifth in the seventies and eighties, you know, when the when the baby boomers were in their twenties. So what young people right now, digital natives, tend to be like is that they are quite a bit less extroverted. They’re quite a bit more introverted because of their use of technology.
Gleb Tsipursky [00:18:32]:
They’re much more used to using technology, and they prefer to interact much more for technology. That’s one thing. Second, they’re much less oriented towards stability. They care much less about stability. They care much more about having a fulfilling, meaningful workplace and their environment. And they care about having positive relationships with their colleagues as opposed to, again, stability. So that’s kind of another dynamic that causes leaders to make a lot of bad decisions about young people in the workforce. And so the way to address the false concepts effect, which is one of many cognitive biases, and we can talk about others, the way to address that is to step back and say, hey.
Gleb Tsipursky [00:19:10]:
I’m likely, for all people, overestimating the extent to which they are like me. So let me figure out much more about what this person actually values, what this person cares about, how what how this person prefers to engage and interact, and how the group of people like this person prefer to engage and interact. And then I can calibrate my leadership to this person because, of course, leadership is about inspiring others to accomplish organizational goals. And you’re not gonna do that if you try to force them into you know, force a square peg into a round hole.
Gleb Tsipursky [00:19:45]:
No. That’s awesome awesome advice there. And, yeah, I I like it a lot. So why don’t we do go down the road of a couple more of those biases? What are, you know, what are, you would say, the top three that are most common within, organizations and most importantly, leaders out there and how they, what they are, and how can leaders avoid them.
Gleb Tsipursky [00:20:07]:
So the let’s skip from the false consensus effect to one that’s not too far from it called confirmation bias. The confirmation bias is our tendency to look for information that supports our beliefs and to ignore information that goes against our beliefs. Again, look for information that supports our beliefs and ignore information that doesn’t. This is a big problem for us when we want to make good decisions because we would only tend to look at the information and the people who bring us the information that we like. So leaders, unfortunately, tend to surround themselves with yes people, people who agree with them. And they tend to hire people who are like them, who hold their beliefs, who have a similar perspective. So for example, if a leader is someone who is really big picture oriented, has is very strategically oriented, kind of has a big vision, they’ll tend to hire other people who are very big picture oriented, and they’re not going to get enough people who hold their feet to the ground. And then the company will be pulled in too many directions and will not have a central effective strategic plan, or a team will be pulled in too many directions if everyone has just grand ideas and grand visions.
Gleb Tsipursky [00:21:18]:
So that’s kind of a typical problem that you run into where you go into a business unit. I go into a business unit and I see, oh, you know, the leader hired a bunch of people like herself or himself, and they are making bad decisions together because they are like the leader. So that’s one element. And, of course, the leader is also likely to ignore information that goes against their preferred beliefs. Now a lot of leaders like to think of themselves as honest, fair, liking constructive critical feedback. But, unfortunately, when you look at the research on the actual people’s behavior, they unintentionally unintentionally push away people who give them constructive critical feedback. So, again, unintentionally, they don’t necessarily want to. They’re they’re not aware that they’re doing it.
Gleb Tsipursky [00:22:06]:
But that’s exactly what happens because they don’t realize how much their behaviors are driven by emotions and how the much their decisions are driven by emotions. Our emotions, our intuitions, our gut reactions drive about 80 to 90% of our decisions. Again, 80 to 90% of our decisions are driven by our gut intuitions, by our emotions, by our feelings. And so that causes a number of problems because when somebody goes to construct a critical feedback, we have an immediate dislike of this person. It feels like a rejection from other tribal perspective. So we need to work hard against that intuition and the most effective leaders, kind of one of the things I work on with leaders, is to create an atmosphere of not simply saying, hey. My door is always open. Sure.
Gleb Tsipursky [00:22:52]:
Give me constructive critical feedback. But uplifting the person who gives constructive critical feedback, giving them a a role saying, hey. You’re gonna be on the devil’s advocate team. You’re going to be awesome. We’ll give you a promotion. We’ll give you more power within the hierarchy. We’ll give you a higher salary. All of these good all of these things that signify that this person is succeeding and being promoted and being raised in the hierarchy because they are providing constructive critical feedback to the leadership.
Gleb Tsipursky [00:23:24]:
And that’s not easy, and that goes against a lot of policies out there where, again, people don’t tend to do that, and that’s a big problem. So that’s one way those are some ways that you can address the confirmation bias. You wanna surround yourself with people who give constructive critical feedback, and you wanna watch out for hiring people who are like yourself. You wanna make sure to surround yourself not simply with people who give you constructive critical feedback, but people who have different thought patterns, different approaches to things than you do to get that benefit. So that’s one of that’s one of the three most dangerous cognitive biases that I would identify for leaders.
Gleb Tsipursky [00:24:00]:
Awesome. I really like that. And in fact, I will back you up 100% on that whole ideology having, you know, empowering people to let you know. Because I one of my last jobs was I was a squadron commander of 200 soldiers, and I had my inner circle and a couple people which I empowered to say, you can come in. It’s not the whole open door thing, but I’m like, you can come in, shut the door, and tell me I’m effing, you know, crazy to that point as long as it’s done within, you know, within within reason, of course, and respect. But end of the day, my decision I I hold the decision, but still, it enabled me to sometimes have my eyes open up to, like, oh my god. Am I actually look at this situation in the right lens? No. I’m not.
Gleb Tsipursky [00:24:43]:
I’m not I’m not actually looking at the whole scope of it or or analyzing it to the point where it needs. I’m getting I am getting emotional to it. So, yes, having those people to that are empowered to the point where they can walk in, shut the door, and tell you to wake up on a situation is absolutely crucial to success. So I back you up a %. So you’re about to dive into the next one.
Gleb Tsipursky [00:25:06]:
Absolutely. Great. Well, clearly, we we shared them. Thank you for sharing your experience with that. Another one that’s really interesting and also kind of counterintuitive. The confirmation bias is kind of more known, and there’s more intuitive. Oh, yes. You know? You shouldn’t look through rose colored glasses at your own actions.
Gleb Tsipursky [00:25:23]:
This one is a little bit more complex and has to do with planning. And you’ve probably heard the the phrase, very famous, you know, that, failing to plan is planning to fail. Very famous phrase, failing to plan is planning to fail. Unfortunately, that phrase is often misleading in some of the same ways that go with your gut is misleading because we tend to plan as though our plans will be correct, will turn out true. We like ourselves. We feel intuitively that we are good. We feel intuitively that our goals are good. Our projects are good.
Gleb Tsipursky [00:25:56]:
Everything will be turn out well. And this is a big problem because we don’t plan for contingencies. We don’t anticipate problems. We don’t think there will be any problems with our plans. Give you an example of an interesting study. There was, some undergraduates who are asked how long who there was half a class of undergraduates who had a final term paper. And they asked, hey. How long do you think it will take you to complete the term paper if everything goes perfectly, if there are no problems at all, you know, everything goes hunky dory? And they said, five weeks.
Gleb Tsipursky [00:26:27]:
Great. Then the other half of the class were asked, how long do you think it will take you to complete the term paper? And that those people said five weeks. So, you know, if everything goes perfectly, it’ll take them five weeks. Hello?
Gleb Tsipursky [00:26:43]:
Yep. I’m here.
Gleb Tsipursky [00:26:43]:
Yep. Okay. If everything goes perfectly, it will take them five weeks. And if everything doesn’t go perfectly, it will take them five weeks. So people don’t think about all the problems. And the same we have the same mindset as those undergraduates. That’s just how we think. That’s just just how our brain operates.
Gleb Tsipursky [00:27:02]:
So because of this mindset, we need to specifically plan for problems, plan for contingencies, plan for issues. So much better phrase is failing to plan for problems is planning to fail. Again, failing to plan for problems is planning to fail. I’ll give an example of how this, tendency, the planning fallacy, our tendency to think that the cognitive bias of our tendency to think that our plans will go perfectly works out in reality. There is a manufacturing company in Pittsburgh that, here, sitting in The US, that of that, I worked with, and it was a heavy manufacturing company. It made bids and projects to of 2,000,000, 3 million bids like that. Now, unfortunately, it had a pattern. This when I was doing the training, the CEO told me that it had a pattern of underbidding where it would bid 2,000,000 on the project, and the project would take 3,000,000.
Gleb Tsipursky [00:27:56]:
You know, it would bill bid 4,000,000 on the project, and the project would take 6,000,000 or some those sorts of numbers. And in some cases, I mean, not only does this seriously cut into the profit margin of the company, but it also sometimes resulted in a project being a loss. So that’s obviously a big problem. And the company kept doing it and doing it and doing it again. And so we came I came in, and I I looked at the pattern. And what I saw was that the company was not incorporating its past experience into making new bids. It was just saying, hey. You know, we think we’ll get it done this time.
Gleb Tsipursky [00:28:32]:
And that’s exactly what they went ahead. You know, the the person who was responsible for bids went ahead and said, we’ll get it done this time, and everyone went ahead with this person. So we changed the process, the system, where the bid had to incorporate their previous experience with similar projects. And if they didn’t have similar experience, they had to bid much quite a bit more than they intuitively thought because, obviously, new project will take much longer than the project we did before. So that really helped fix the situation that cleared up a lot of the planning fallacy where they incorporated their previous experience into the new projects, into the future bids for projects they were familiar with. Now with projects they weren’t familiar with or with strategic plans, what you want to do is identify the kind of problems that might come up. Think about all the problems and try to address them in advance as much as possible. And the same thing for opportunities.
Gleb Tsipursky [00:29:28]:
Think about the opportunities that might come up and try to steer toward them as much as possible as opposed to just going down with your plans and reserve some extra resources of time, money, energy, social capital for projects, for, opportunities that might come up that you didn’t anticipate and problems that might come up that you didn’t anticipate. So that’s the way that you adjust the climate fallacy.
Gleb Tsipursky [00:29:50]:
I like it a lot. And, there’s a lot there, a lot of parallels to how we do business with that. And I won’t go into too much detail, but we do what we call a rehearsal of of concept drill where we actually go through, you know, a plan and say, okay. Step one is this. Alright. What’s everybody doing? What are the potential pitfalls? How is synchronization working? Where are threats? Where are opportunities? And we’ll go through right through a whole operation and doing what we call that rock drill. Right? That’s exactly what we’re looking for is those those pitfalls, those problem areas that we haven’t even necessarily thought of. The second part that I really like that you mentioned is learning from your your past and lessons learned.
Gleb Tsipursky [00:30:31]:
If you can’t do that as an organization, as a leader of organization, you’re you’re definitely leaving a lot on the table and a a lot to a lot of potential and, you know, in potentially even causing a lot more problems. You need to learn from those past mistakes. You need to learn from those past, you know, operations, past, contracts, whatever it is. And, unfortunately, too many organizations go, alright. This job’s done. Moving on to the next. Yeah. Awesome.
Gleb Tsipursky [00:31:00]:
So in your book, you’re talking about organizations and judgment errors that organizations are prone to. So what are you know, we we’re talking about cognitive biases. Are these similar or the Yes.
Gleb Tsipursky [00:31:12]:
The dangerous judgment errors are the cognitive biases. So that is the dangerous judgment errors that we make. Those 30 most dangerous judgment errors that I talk about in my book, Never Go Their Gut. Right. Outstanding leaders make the best decisions and avoid business disasters. So that’s what that that’s what the dangerous judgment errors are.
Gleb Tsipursky [00:31:29]:
Awesome. So we talked a lot about how, basically, the bad side of this. Right? Yeah. All the negative aspects of, you know, the bad things that, going with your gut comes with, the cognitive biases, the, the, judgment errors, and so on and so forth. So how should leaders go out there about making their decisions? Because this is what we’re talking about today. We’re talking about decision making, and that’s the Mhmm. One thing I would say leaders do most of them in their daily basis is that’s what they’re there for is to make decisions. So according to you, in the way you’ve outlined the book, how should they go about making those decisions?
Gleb Tsipursky [00:32:04]:
Well, first of all, they need to be much more humble about their decision making. They need to realize that their current if they haven’t gotten any professional development, which the vast, vast majority of people have not I mean, when I looking at decision making, I know that the Harvard Business School has a separate decision making. That’s kind of one of the only only, business schools that has a decision making facility. The vast majority of people don’t have any training in decision making. And we’re only right now discovering what are the most effective strategies of making decisions. Previously, the previous wave of scholars of cognitive neuroscientists were discovering all the ways that we were screwed up, all these dangerous judgment errors that I talked about. My wave of cognitive neuroscientist scholars like myself, what we are discovering is how to address these problems. So I described some strategies kind of looking at your past and so on that you can use to address these specific problems.
Gleb Tsipursky [00:32:55]:
But, fortunately, there are also ways that you can globally address a whole bunch of problems at once. And I outlined them in my book, Never Go With Your Gut. Now the for quick and effective strategies, I mean, leaders have to make a lot of decisions every day. And, unfortunately, they tend to make these decisions too quickly and too poorly. Whenever you want to make a decision that you don’t want to screw up, that you wanna make sure it’s right, whether you want to send an important email, prepare for an important meeting, or make a decision about a supplier of not something crucial, but something that makes an impact to your bottom line. This is this technique that I’m about to say describe is kind of takes couple of minutes. It takes less than five minutes, two minutes, three minutes, Very short technique. Shouldn’t use it on major decisions.
Gleb Tsipursky [00:33:44]:
You shouldn’t use it on better company decisions or one of those kind of projects that I was talking about, the 2,000,000, three million projects that’s was really important for the midsize manufacturing one. So that though those are things that take more time and more efforts. There’s link for that. We can talk about that. But this technique is a short quick one. So quickly, five questions. Five questions you can ask about any decision that you don’t want to screw up. First question, what important information that I not yet fully consider? Again, what important information did I not yet fully consider? You want to especially look at information that goes against your intuitions to fight the confirmation bias and other and the planning fallacy and other sorts of problems like this, the false consensus effect.
Gleb Tsipursky [00:34:25]:
Other sorts of problems like this, you want to look at information that goes against your preferred choices so that you see because we otherwise tend to ignore it and shove it aside. So look at the information that this confirms your choice. And if you can’t disconfirm your choice, if you can’t show that it’s wrong, then it’s much more likely to be right. But you want to make sure to thoroughly try to disprove it. So it’s kind of a very scientific approach to business. So that’s first. Second, what dangerous judgment errors that are not yet fully addressed? And, of course, these are the cognitive biases. What cognitive biases did it not yet address? My book has an assessment in the last chapter, chapter seven, which goes for the 30 most dangerous judgment errors one by one and focuses on the specific behaviors that you would see if you’re falling into it.
Gleb Tsipursky [00:35:09]:
So, for example, for the planning fallacy, how often does your budget tend to go the do your projects tend to go over budget or over time or both? Now when I go to a training and I hear, leaders tell me, oh, you know, 60%, seventy %, fifty %, that’s when you can tell that they are really falling to the planning fallacy, and it’s pretty typical for them. So that and there are, of course, 29 others. So third, you what would a trusted and objective adviser suggest you do? Again, what would a trusted and objective adviser suggest you do? So think about somebody who’s like that. Now think about Scott. Think about somebody you respect, some somebody you trust. What would that person suggest you do? And sometimes you might actually wanna reach out to that person, or sometimes you just want to imagine that person and what they would tell you to do. And, actually, the research should suggest that just by imagining what this person tells us to do, we get about 50% of the benefit of reaching out to ask that person. So that’s three.
Gleb Tsipursky [00:36:10]:
The fourth one, we’re switching to how to implement the decision effectively. Fourth question, how have I addressed all the ways this decision could fail? Again, how have I addressed all the ways this decision could fail? Talked about that a little bit before. What are all the kinds of problems that might arise that you might not be thinking about intuitively because you’re making perfect plans? What are all the opportunities you might be missing because, again, you’re thinking about that things will go according to plan? Think about all the ways that could fail, not by seizing by not seizing opportunities, by not addressing risks, and implement integrate that into your decision. And finally and this is really important. People tend to skip this way too often. What new information would cause me to revisit this decision? Again, what new information would cause me to revisit this decision? Why this is so important is because we tend to jump into the implementation of the plans. And when new information comes up that might be negative about our initial decision, we tend to be too attached to our implementation to consider it thoroughly. And that is a serious problem because sometimes information might be seriousness for us to change our minds, update our beliefs.
Gleb Tsipursky [00:37:14]:
So you want to decide in advance what information do would you need to change your mind. And one way of doing so would be to set a time point. You know? If in three months, this the new product that we launched doesn’t reach $4.54500000.0 in sales, we will seriously revisit the product launch plan. We’ll pivot or so on. And if it does reach that, we’ll just go out and focus on implementation. So that’s an easy way of just setting a time point and an evaluation point that can help you really inform yourself going forward. So those are five questions. And what I find leaders are it’s not only helpful for leaders individually, but it’s very helpful for them as teams.
Gleb Tsipursky [00:37:53]:
If everyone in their team asks the quest these questions and leaders teach it to everyone on their teams to ask these questions, then you can be much more confident about how well the decision making process is going in everyone on your team, everyone in your, business unit. And when you gather together for decision making meetings or just the weekly staff meeting, you’re going to be much more effective at going through various points because you can structure your agenda by these five questions. So it’s a much more effective approach to holding meetings than just talking about things and going forward. So that’s what, this is a very effective technique that pretty much almost all of my clients use.
Gleb Tsipursky [00:38:33]:
I like it a lot, and I especially like the last part there, you know, asking the question whether or not the situation has changed. And I I do agree with you. You often that does get skipped. That does get skipped. It gets skipped with my coaching clients as well. Mhmm. And the reason I I think the reason why I believe it gets skipped is because it’s at the end of the process. And if you answer yes to that question, you all suddenly go right back to the beginning.
Gleb Tsipursky [00:38:54]:
Right? And people don’t want they wanna hit that finish line. They wanna move forward. They wanna carry on and, you know, get the project done. But, also, it’s like, oh, no. This you know, if I asked you, has the situation changed? And I go, yes. I go right back to the beginning, and all of a sudden, I’m gonna look not as effective, not as efficient, weak to my bosses or my subordinates and etcetera. So I think that’s the reason why I get skipped, but at the same time.
Gleb Tsipursky [00:39:17]:
Yeah. And this yes. It’s crucial. And if you have it integrated, that’s why I strongly encourage leaders to have it integrated for the organization, for the team. Because then if you know that everyone’s asking that question, you don’t look weak when you go back. You’re you look smart. You look wise. You look effective.
Gleb Tsipursky [00:39:35]:
You everyone knows that, oh, yes. You did the right thing. You did the smart thing. You did the wise thing for the bottom line by going back and revisiting a decision. Now there’s a famous one of the cognitive biases that we didn’t talk about yet. It’s called the sunken cost fallacy. The sunken cost fallacy. It’s when we tend to throw good money after bad.
Gleb Tsipursky [00:39:54]:
If a project is going wrong, you know, you’ve probably heard the statistics that 95% of product launches flop, and it’s probably not quite as bad, by now. I think that that statistic is more from the nineteen eighties, but it’s still the case of very many product launches swap. And that is a serious issue if you keep if you keep pouring money into a product launch without pivoting and revising the product launch plan, seeing, hey. How can I salvage this? Maybe my original plan wasn’t very good. Or maybe you wanna stop producing the product altogether. Depends on the situation. So we tend to throw too much good money after bad. And if you have a process of revising the decision that you decide on in advance, that’s going to make you look better as someone who revises the decision and as someone who makes sure to save the company money and is a stronger leader for willing to change for being willing to change their mind.
Gleb Tsipursky [00:40:45]:
No. I like it a lot. And, yeah, that song can cause fallacy. Why? Yeah. Let’s not go down that route. Clive, it’s been it’s been, it’s been awesome chat. I think we could probably go on for two more hours, but I’m gonna wind it down here. Before we wrap up, I do have a couple last questions.
Gleb Tsipursky [00:41:03]:
Mhmm. And the first one is, according to you, Gleb, what makes a great leader?
Gleb Tsipursky [00:41:11]:
So, actually, something that we just talked about, the ability to change your mind. I think there too many leaders who call themselves great and who others call great who are incredibly arrogant and who are unable to change their mind and who get tripped up by this in the end. Whereas there are plenty of other leaders, people who are withdrawn, people who are not at the top, you know. For example, Alan Mulally at Ford. He is very well known as someone who is was able to pivot Ford a number of times, and that is a big, big reason why he was able to succeed so well at his time at Ford. So being able to change your mind is one of the biggest and that humility that it requires, the humility to change your mind to say, hey. I might be wrong. That’s a big, big thing to be able to do, and that’s something that I strongly admire leaders for.
Gleb Tsipursky [00:41:58]:
Couldn’t agree with you more. The arrogance is definitely a a crucial key turn off for me, and, humility is a huge, huge piece that I I believe as well the leaders. Well, the last thing is I’m gonna I’m gonna let you know you don’t necessarily have to be humble for this last bit. Where can people find you? Where can they find the book? Feel free to give yourself a shameless plug. It’s all yours right now.
Gleb Tsipursky [00:42:20]:
Great. So folks can find my book, Never Go With Your Gut, how pioneering leaders make the best decisions and avoid business disasters in bookstores everywhere. It’s been published by the well known business publisher, Career Press. So it’s in physical bookstores, physical form, you know, Barnes and Noble, whatever, you know, university bookstores, airport bookstores, indie bookstores, you’ll find everywhere. And, of course, online, Amazon, Barnes and Noble online, everywhere online. So check it out. You can also sign up for my wise decision maker course, and that’s a course of eight online modules that talk about all the most important strategies of making the wisest decisions. That’s going to be at my website, disasteravoidanceexperts.com slash subscribe forward slash subscribe.
Gleb Tsipursky [00:43:04]:
Again, disasteravoidanceexperts.com forward slash subscribe. And, of course, with my website, disasteravoidanceexperts.com, you can find my blog, videos, podcasts, a lot of resources, manuals that you can use, assessments that you can use to help yourself make the widest and most profitable decisions. Check me out on LinkedIn, doctor Gleb Tsipursky. Happy to connect. G l e b t s I p u r s k y. On Twitter, gleb underscore zypurski. Let’s connect there. And, of course, if if you have any questions about anything you heard today, please give me an shoot me an email.
Gleb Tsipursky [00:43:40]:
Happy to chat. Gleb,gleb,@disasteravoidanceexperts.com. Again, gleb at disaster avoidance experts dot com.
Scott McCarthy [00:43:51]:
Awesome. And for the audience, as always, it’s easy for you folks. Just go to movingforwardleadership.com/989eight, and all those links are gonna be in the show notes for you. Gleb, again, thanks for taking time out of your busy schedule to come talk to me, most importantly, the listener, on all about decision making because as I always say, decision making is basically what leaders are here for. They’re it’s what they do most of the day. And if we mess that up, then we’re going to ultimately make our peel people fail because we’ve made the bad decisions. And not going with your gut, you know what? Maybe I’m gonna have to go with my gut and make sure this gut book gets around more. But, again, thank you thank you for coming out and thanking your time.
Gleb Tsipursky [00:44:33]:
I really appreciate you having me on. Thank you so much, Scott.
Scott McCarthy [00:44:45]:
Alright. That’s all I got for you fine folks today. I hope you enjoyed the show. I hope you enjoyed the interview and most importantly, I hope you got something out of it. And if you did, remember r squared, s squared, right? Right and review the show so that it gets a little bit noticed a bit more but most importantly, I can help more people because that’s what I’m here for, that’s what my guests are here for is to help more people become better leaders and not being bosses. Right? So remember that r squared, rate in view. S, share the show. Share this show with someone who you think can relate to the podcast as a whole and today’s topic.
Scott McCarthy [00:45:25]:
And then finally, subscribe. Subscribe so that you never miss another episode and you can do that via your podcast playing app of choice through movingforwardleadership.com forward slash subscribe. That’s it for today ladies and gentlemen. And as always, stop bossing and start leading. Take care now.