Convenience-store leaders are constantly making important decisions for their companies, from where to build the next store to what beverages to include in the cold vault to whether to use self-checkout machines. But there are ways leaders can make better decisions.
If a company has an all-male team, that team makes a good decision about 58% of the time; however, if a team has age, gender and geographic diversity, that team makes a good decision 87% of the time.
Quendrida Whitmore, senior consultant with Leading NOW, shared these stats from Australian publication SmartCompany at CSP’s second-annual Convenience-Store Women’s event, held in November in Charleston, South Carolina. Leading NOW is the educational content partner for CSW.
“When you have different perspectives at the table, and you make it safe for people to say those perspectives, and have the right level of dialogue, you get much better decisions out of it. It’s literally that simple,” Whitmore said.
There are several reasons why people make bad decisions, Whitmore said, including framing the wrong issue, being reactive, feeling stressed, letting ego drive decisions, remining stuck in an old paradigm, being fearful of criticism and more.
The way humans’ brains work can also get in the way, she said, citing a study from the Harvard Business Review. Those psychological traps that are likely to undermine business decisions are anchoring, status-quo, sunk-cost, confirm evidence, framing and estimating/forecasting, according to the journal.
The best way to combat this “human nature” when it comes to decision making is for leaders to be self-aware, Whitmore said.
“If you’re not identifying that you do it, there’s no way that you’re going to actually step around it when it’s actually occurring, or be able to go, ‘Oh, that’s what I tend to do when I get stressed,’” she said. “So self-awareness…is one of the biggest things to do to make sure that you combat human nature and that you remove bias from your decision-making process.”
Here are the six traps for decision-makers to be aware of and what they mean:
- Anchoring: When considering a decision, the mind gives disproportionate weight to the first information it receives, the Harvard Business Review said. Whitmore said one person may “anchor” in decisions and latch onto the first information that comes in the door. “If you’re a person that’s about efficiency, you may actually overuse this, and say, ‘Great, right answer, let’s move,’” she said.
- Status-Quo: “The status quo keeps us safe,” Whitmore said. “We’re comfortable with it. But it does not keep us growing and thriving. It involves the thoughts of, ‘We’ve always done it this why, why change?’”
- Sunk-Cost: This is when a company puts more time, resources and money into something that it knows is not the right thing, but it feels too far down the road to change it, she said.
- Confirm Evidence: “It’s when you look for things that actually confirm what you already believe,” Whitmore said.
- Framing: Framing is when someone positions something to sound really good or to lead others to a predetermined answer, she said. A good decision-maker must do the research and work before coming to a conclusion.
- Estimating/Forecasting: This is when a company estimates completely wrong, over or under, she said.
“We all do this. These are human nature,” Whitmore said. “It just depends on, what do you do more often? Why do you do it? And do you understand when you’re doing it enough to stop it, and to pull in the right folks to make sure that we don’t do this”?
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