The Key to Making Informed Choices

Making decisions is a critical aspect of life, both personally and professionally. However, not all decisions are created equal; some decisions are more informed and better thought out than others. The first decision we must make is whether we are okay with making a selection or a truly informed decision. The second decision we need to make is whether we want to be “right” or if we prefer to be accurate.

To make truly informed and accurate decisions, we must appeal to Knowledge-Based Decision-Making. Knowledge-Based Decision-Making is a concept that relies on the idea that knowledge itself drives the decision-making process. This approach puts a premium on acquiring and using information, facts, and data to make informed choices. This may seem obvious at first, but there are undoubtedly elements that you have not considered.  

Data, Information, and Knowledge

Data, information, and knowledge are often used interchangeably, but they differ. Data refers to a body of facts, statistics, or items of information collected together for reference, analysis, or planning. Conversely, information is usually factual data or details received or communicated about a person or thing. Knowledge, in turn, is defined as awareness, understanding, or acquaintance of facts, information, and skills acquired via experience or education (IE: exposure). Knowing the difference between the three helps set the stage for better decisions (and communication).

Critical Thinking in Knowledge-Based Decision-Making

One critical aspect of Knowledge-Based Decision-Making is the role of critical thinking. Critical thinking is analyzing and evaluating information to make informed decisions. First and foremost, it involves questioning assumptions. From there, we must examine the evidence and weigh the pros and cons of at least three options. A critical thinker can assess the validity of information, separate fact from fiction, and make informed decisions based on the best available evidence, regardless of how we “feel” about them. Again, we seek to be accurate.

The Influence of Emotions and Tribal Knowledge

One of the biggest hindrances to Knowledge-Based Decision-Making is the influence of emotions. In today’s world, we are conditioned to attach emotions to everything. However, emotions drive bias and can lead to poor decision-making by clouding our judgment. To counteract this, we must develop the ability to identify and manage our emotions.

What you believe are the facts may not be the facts at all. The role of tribal knowledge cannot be overstated in Knowledge-Based Decision-Making. Tribal knowledge refers to the accumulated wisdom and experience of a group that is passed down from one generation to the next. However, while this knowledge is often quite valuable, it must also be balanced against the need to seek out new information and challenge assumptions. The primary reason is that information changes constantly, and what we thought we knew might no longer be the case.

Continuous Learning and Improvement

Leaders are learners. Continuous learning and improvement are essential components of Knowledge-Based Decision-Making. We can never know everything, but we can always seek to learn more. This relentless pursuit of knowledge and information should be a daily exercise. This means setting aside time to read, study, and reflect and seeking opportunities to acquire new knowledge and skills. In a fast-paced and rapidly changing world, staying current and being prepared to adapt to new information and changing circumstances is critical.

Collaboration in Knowledge-Based Decision-Making

Collaboration is vital in Knowledge-Based Decision-Making. Individuals can pool their knowledge, expertise, and resources by working together to make informed decisions. Teamwork helps to ensure that all relevant perspectives are considered and that decisions are made based on the best available information. Collaboration also helps create a continuous learning and improvement culture and encourages individuals to share their experiences and insights. However, we must be cautious about groupthink and avoid contrasting opinions or viewpoints. The key is in the contrast!

Establishing a Culture of Informed Decision-Making

Organizations can take several steps to establish a culture of informed decision-making. These steps include:

  1. Establishing a clear decision-making process that outlines the steps involved in making decisions and the criteria used to evaluate different options. Such processes keep emotional contortions from hindering effective decision-making.
  2. Developing a culture of continuous learning and improvement to foster informed decision-making. This can include providing training and professional development opportunities, encouraging collaboration, and promoting critical thinking.
  3. Leveraging technology to support informed decision-making. This can include using data analytics, collaboration software, and knowledge management systems to access and share information.
  4. Measuring the effectiveness of decision-making processes and systems. This can include tracking outcomes, gathering feedback, and conducting regular evaluations to identify areas for improvement.

Warnings to Consider

Knowledge is power, but it’s important to remember that a few things can hinder knowledge acquisition. Astroturfing, social proof, the Dunning-Kruger Effect, and bias can significantly undermine the validity of information and data, leading to poorly informed decisions. Leaders must be on the lookout for each of these.

Astroturfing refers to disguising a paid or politically motivated campaign as a grassroots movement. This can lead to the spread of misinformation and significantly impact public opinion and decision-making. Leaders need to know that this is a multi-billion dollar industry loaded with “experts” who might appear credible.

Social proof refers to the phenomenon of people conforming to the actions and opinions of others. This can lead to groupthink and the spread of false information and undermine the validity of data and information used to make decisions. When it comes to what is seemingly popular, remember that just as a herd can be led astray by a single misinformed animal, individuals can also be influenced by false or misleading information if they perceive that many others believe it to be true. This is especially true if highly influential and charismatic people share the information.

The Dunning-Kruger Effect refers to people with limited knowledge and skills overestimating their abilities and people with exceptional abilities underestimating themselves. This interesting situation often leads to the ignorant being exceptionally vocal and the intelligent being somewhat reserved. This can lead to poor decision-making on many levels for many reasons. The advice here is to beware of the gurus and influencers. They might be unable to assess their limitations accurately, and therefore, they might truly believe in their misconceptions. Seek the necessary information, contrast, and resources from better and more qualified sources to make informed choices.

Bias refers to an inclination or prejudice for or against one thing, person, or group compared with another, often not based on reason or actual experience. Bias can lead to the selective interpretation of information and data and undermine the validity of information and data used to make decisions. Confirmation bias, selection bias, and availability bias are usually significant issues in decision-making. Be aware of these potential hindrances and do what you can to temper their influence.

Putting it Together

As you can probably see, there is a little more to decision-making than simply selecting between a couple of options in front of you. Remember that Knowledge-Based Decision-Making puts a premium on acquiring and using information, facts, and data to make informed choices. Arbitrarily choosing what “sounds about right” is not the best approach. Effective decisions require critical thinking, continuous learning and improvement, and collaboration.

Organizations can take a number of steps to establish a culture of informed decision-making, including establishing a clear decision-making process, leveraging technology, and measuring the effectiveness of decision-making systems. However, it’s important to be aware of potential hindrances to knowledge acquisition, including astroturfing, social proof, the Dunning-Kruger Effect, and bias. Mastery happens through repetition, so don’t be discouraged if you mess up a few times.

The reality is that much more could be written on this topic. For example, there is an effective way to make the decision process much easier once you have established your options. I teach my students this method. Of course, if this seems like a lot to take in, you are not alone. Don’t worry. Continuous learning helps fill the gap. If you would like to expedite the process, remember that leadership development (provided by a trained leaderologist) can help individuals improve their knowledge-based decision-making skills and much more. 

Remember! Not all development programs are created equal. Read my article Ten Reasons To Avoid Group Development