Decision-making: No problem

TECHNICAL

Michael Mauboussin, chief investment strategist at Legg Mason Capital Management describes some common decision-making mistakes that executives - indeed all decision makers - often make

There are a number of situations where your mind will want to think about a problem one way when there is a better way to think about it. All of us do this, but by understanding these situations and learning how we are likely to go wrong, we can take some steps to improve our decisions. I want to mention three of these situations in particular. 1. The first is the mistake of relying on the inside versus the outside point of view. This is prevalent in many organisations. The inside view says that when you are trying to predict something or to solve a problem, you will gather lots of infor...