Smart People, Dumb Decisions*

1. Charlotte Area Society for Human Resource Management August 11, 2014 Smart People, Dumb Decisions* *Remind You of Someone You Know? Smart People, Dumb Decisions* (Remind you of someone you know?)

2. Smart People, Dumb Decisions* *Remind You of Someone You Know?

3. Smart People, Dumb Decisions* *Remind You of Someone You Know?

7. Conventional Capital Budgeting Tools “The models we’ve developed for choosing decision support tools is dependent on managers being able to accurately determine the level of ambiguity and uncertainty they face.” Decision Support Tools Quantitative Multiple Scenario Tools Case-Based Decision Analysis Qualitative Scenario Analysis

8. Pea + Pear + Pope = Better Decisions in Work and Life

9. Past Emotion Automatic

10. $31.71 11/01/2011 -51% 16 months $15.87 04/28/2013

12. $16.97 07/07/2006 -85% 5 years 16 months $2.60 09/29/2012 $0.56 Today

14. Past Emotion Automatic Reflection

17. 99.4%; Prefrontal Cortex; 30 inputs; 7 Focal Points; Pattern Recognition; Emotional Tagging Automatic System; 80%; “Gut”; Reflective System; 20%; Rational; Dopamine Neurons; Habit

18. Past Emotion Automatic Reflection

20. Promoter of the Faith 1587-1983 (aka The Devil’s Advocate)

21. Canonizations 499 98 17 Years (1983-2000) 83 Years (1900-1983)

22. Reflection: Guarding Against Prejudgment Misleading Experiences -Uncertainties? -Relevant experience? -Misleading experience? Misleading Prejudgments -Uncertainties? -Prejudged the uncertainties? -Prejudgments supported by evidence? Source: Think Again; Sydney Finkelstein, Jo Whitehead and Andrew Campbell; Harvard Business Press 2008

23. Reflection: Guarding Against Self-Interest Inappropriate Self-Interest -Potential for Gain/Loss? -Contrary to shareholder interests? -Possibly distort the decision? Inappropriate Attachments -Impact on peripheral people or interests? Source: Think Again; Sydney Finkelstein, Jo Whitehead and Andrew Campbell; Harvard Business Press 2008

24. Reflection: Organizational Decision Diagnostic Unlikely Optimization Caution Self- Interest Danger Caution Likely Prejudgment Unlikely Source: Rex H. Gale, Smart People, Dumb Decisions 2013; Based Think Again; Sydney Finkelstein, Jo Whitehead and Andrew Campbell; Harvard Business Press 2008

25. Reflection: Organizational Decision Diagnostic Corporate Governance Who’s Your Chief Devil’s Advocate Officer? Source: Rex H. Gale, Smart People, Dumb Decisions 2013

26. Personal Reflection Decision Diagnostic Express contrarian points of view in group meetings When things are going wrong, you say so immediately Consciously acknowledge when your past experiences may be influencing your decision Consciously acknowledge when your emotions may be influencing your decision Consciously acknowledge when your personal interests may be influencing your decisions Seriously consider some else’s point of view when it differs from your own Re-examine your most deeply-held beliefs Often Never Always Sometimes

29. Reflection: Organizational and Individual Decision Diagnostics

31. Rex Gale, SPHR, HCS @rexgale #reflection #pearbrain #peapearpope #spdd Rex.gale@bcbssc.com Rex.gale@gmail.com