BUT FOR BAD DECISIONS AND MISTAKES

The late Dr. Donald Cressey was the first to recognize the relationship between behavioral transgressions and the ability to rationalize. As a sociologist and criminologist, Cressey expressed his theory in what has become known as the fraud triangle. Of its three elements, opportunity, motivation and rationalization, according to Cressey organizations can only control opportunity. Though created to assist in the design of organizational internal controls, this model is useful in understanding the mind of the organizational malfeasant and the significance of his ability to rationalize. Cressey was quick to point out that even the best systems of internal control and forbearance cannot provide absolute safeguards against irregular activities perpetrated by insiders.

Anthony Cantanese, Ph.D. takes another view. With over thirty years in academia and study in the field of public planning and development he believes good people are not only capable of doing bad things intentionally but also because of their susceptibility to common human foibles. Cantanese cites five possible factors:

 

  1. Timing and the push toward deadlines. Urgency breeds mistakes because decision-makers sometimes value the importance of time more than outcomes;
  2. Distractions—the cause of most accidents and mishaps also influence our decision making. When we allow them, distractions divert our attention and energy;
  3. Bad information often leads to bad decisions. If our assumptions are inaccurate our ability to make good decisions is greatly diminished;
  4. Poor advice. Combining bad information with poor advice multiplies the probability of ruin; and
  5. “Satisfizing”.

 

According to Cantanese decision makers often make profound decisions not based on the best information available, but in the pursuit of outcomes that will satisfy the largest number of constituents. Thus, they opt to satisfize and in doing so compromise the inner voice of their conscience and sometimes even their personal ethics. Cantanese however does not minimize the role influencers. Influencers are usually insiders. They are often members of the decision maker’s inner circle. They are trusted and thus believed. When they create distractions and intentionally provide bad information, decision makers, inevitably make bad decisions.

Mistakes play a role as well. Consider the condition known as innumeracy—the unfamiliarity with mathematical concepts and methods. Even the brightest people suffer from this common malady. Unfortunately, innumeracy can lead to disastrous outcomes. The bias it fosters provide its victims a false sense of assurance when making decisions. To make the point, consider your understanding and appreciation of simple probability. In a randomly selected class of thirty students, what is the probability that two or more will share the same birthday?

While an approximate answer to this seemingly simple question may appear intuitively obvious, only the decision-maker who has exceptional intuition will likely answer correctly. Intuition is an expression of probability and reflects the current state of knowledge about the problem being worked. This sort of leader sees things others do not, that is; he demonstrates that unique creativity we sometimes call genius. What’s more, intuition is an attribute that is usually derived from life-long personal experiences and not necessarily from formal education. As such, incisive insight is a corresponding attribute that allows the prediction of events and the ability to visualize unexpected patterns, periodicity or structure amid apparent chaos. It is likely your intuitive answer of to the Birthday Paradox is surprisingly wrong.

 

Answer: The probability of at least two students with the same birthday in a group of 30 is a whopping 70%.  In fact, we find that in a group of 23 students, the odds are better than 50% to find at least two with the same birthday. Here’s the formula:

 

365!

———-

(365-n)!

 

The exclamation point means “factorial”. Factorials are defined as n*(n-1)*(n-2)… (3)(2)(1). For example, 6! = 6*5*4*3*2*1. In this example, n is the number of students.

 

Thus, if our initial presumptions are not accurate or contain imperfect data, the final conclusion we draw will likely be inaccurate. When innumeracy is combined with intentionally inaccurate information provided by members of the decision maker’s inner circle, doom is almost certain. The belief that all members of our chosen team, share a agenda is the bane of many fallen leaders.