There’s a curious fact about decision-making: most of us often make the wrong ones. If you’re trying to decide what to order at a restaurant, the consequences probably won’t be that severe. However, if you’re in a leadership role and you’re trying to enhance employee engagement or encourage behaviour change of some sort, bad decisions can turn that new balloon you’re trying to fly into lead.

Influenced by the work of American psychologist Daniel Kahneman, Harvard Business School professors John Beshears and Francesca Gino have come up with a five-stage process that has shown itself capable of delivering far better outcomes.

The first step involves understanding why we make poor decisions so often. Usually it’s because we’re relying too much on what Kahneman calls “System 1 Thinking,” which is emotional, intuitive and automatic. When we over-rely on it, we end up being hoodwinked by all sorts of cognitive biases, such as a preference for the status quo, loss aversion, overconfidence and groupthink.

We also have the option to engage what Kahneman calls “System 2 Thinking.” This is slower, more logical and more deliberate. Both can be used to improve employee engagement, motivation and performance. To determine which is the most apt, the second step of the process needs to take place: definition. According to Beshears and Gino, three considerations need to be explored: is the issue being caused by human behaviour, how narrowly can it be defined, and are people acting against their best interest?

The latter often occurs when an inefficient custom is adhered to simply because it’s become habitual and invisible to those performing it. Change here might require a switch to System 2 Thinking such as getting people to think about what they’re doing habitually, whether they think it could be improved, and whether they think that could make life simpler for them.

In Part 2, I’ll walk you through the next three stages of the process.

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