Why Do Smart People Make Bad Decisions?: What Does It Take to Achieve Top Performance? A Look at the HCA Study: 150,000 Joining to Form Largest RN Union in U.S.: One Question, Three Different Answers
Apr 01, 2009
Solutions

Why Do Smart People Make Bad Decisions?

Even the smartest people on the planet can make some really bad decisions. In fact, in a recent letter to shareholders, the world’s wisest investor, Warren Buffet, openly admitted to doing some “dumb things” over the past year. So, what gives? How can proven professionals make silly mistakes? Below we take a look at four key factors that can cause savvy leaders to make bad decisions.
  • Too much reliance on experience. Leaders tend to heavily rely on past experience, which can be useful, but can also sometimes be dangerous. Indeed, experience is important, but some leaders rely on past experience when it doesn’t fit or relate to the situation they are in. A decision that proved well in a past situation isn’t necessarily going to work the next time around.
  • Self-interest. Many people don't realize how self-interested they really are. Further, self-interest can operate at a subconscious level; so a leader can essentially make a decision purely out of self-interest and not even be aware of it.
  • Prejudgments. Leaders can make prejudgments that turn out to be completely wrong. Moreover, leaders can be further debilitated when making an incorrect judgment and then sticking to it no matter what.
  • Attachments. Leaders can become extremely attached to their business and their employees. While this is a good thing, it can often cloud one’s judgment. In today’s economy, many organizations are engaged in downsizing. Attachments can really come into play in these types of situations. For example, leaders may refuse to sell off a business segment they helped build themselves or approach layoffs in an extremely biased manner.
    • How to Get Past the Culprits
    The good news is that once people are aware of the primary reasons for making mistakes, they can begin to move forward to eliminate them. For example, you can reduce your odds of making bad decisions by simply recognizing that you are biased in most situations. When you are in an important decision situation, the first thing you should do is acknowledge and identify any potential biases. Getting such items out into the open will help eliminate damaging, biased tendencies.

    The good news is that once people are aware of the primary reasons for making mistakes, they can begin to move forward to eliminate them.  For example, you can reduce your odds of making bad decisions by simply recognizing that you are biased in most situations. When you are in an important decision situation, the first thing you should do is acknowledge and identify any potential biases. Getting such items out into the open will help eliminate damaging, biased tendencies.
    It also helps to bring different people and opinions to the table. Colleagues and peers who challenge your ideas and offer fresh approaches will serve you better than people who go along with your every thought. Lastly, engagement from senior leadership is key. Leadership that is in touch and engaged with the issues at hand will undoubtedly offer value to the decision making process.
    "The greatest mistake you can make in life is to be continually fearing you will make one."  -Elbert Hubbard
    What Does It Take to Achieve Top Performance?
    A Look at the HCA Study

    The Hospital Corporation of America (HCA) recently performed a study to identify the characteristics of high performing hospitals. The HCA sought to identify best practices that could increase employee engagement, patient satisfaction, and physician satisfaction. More than 170 hospitals were evaluated to determine the characteristics of top performers. Although this study was specific to hospital settings, many parallels to other healthcare organizations can certainly be drawn.

    The study ultimately found that culture and employee satisfaction are highly correlated with outstanding patient care and patient satisfaction levels. In a nutshell, the HCA concluded that high performance hospitals:
  • Have more satisfied employees, patients, and physicians
  • Offer better quality with lower risks and claims potential
  • Generate higher earnings per facility
    • Moreover, the study found that all high performing hospitals had seven traits in common, which the HCA coined as the “seven truths of high performance.” These seven characteristics are briefly outlined below.
  • Visionary leadership: The study defines visionary leaders as available, approachable, and open with minimal micro-management.
  • Consistent and effective communication: Top performing facilities communicated through ongoing employee forums.
  • Select for fit and ongoing development of staff: High performing hospitals were willing to wait for the right person and had the courage to let go of the wrong individuals.
  • Agile and open culture: A blame-free environment is key to a high performing organization. Employees in these organizations often feel part of a family.
  • Accountability: Top performing facilities always strive to meet customers’ expectations and expect to be held accountable. Accountability should encompass every department and aspect of the company, including appearance, (both employees and the facility) attitude, and of course, performance.
  • Constant recognition and community outreach: Top performers are strongly committed to improving the quality of life while creating a greater sense of community involvement among staff and their families.
  • Solid physician relationships: Outstanding patient care largely depends on attracting and retaining outstanding physicians. Top performing organizations have meaningful and productive relationships with their physicians.
    • While the study uncovered seven truths of high performance, it also concluded that there is no high performing silver bullet. Successful hospitals/healthcare facilities will be those that can customize the seven truths to create a vibrant culture and achieve the related bottom-line results.
    "Hold yourself responsible for a higher standard than anybody expects of you. Never excuse yourself."  -Henry Ward Beecher
    150,000 Joining to Form Largest RN Union in U.S.

    In a dramatic move to unite the power and influence of America's leading direct care RN organizations, the United American Nurses, California Nurses Association/National Nurses Organizing Committee, and the Massachusetts Nurses Association are joining together to form a new, 150,000-member association. The new organization will be called the United American Nurses-National Nurses Organizing Committee, UAN-NNOC.

    
Union organizers stated that the UAN-NNOC aims to accomplish the following:
  • Build an RN movement in order to defend and advance the interests of direct care nurses across the country
  • Organize all nonunion direct care RNs (a substantial majority of the budget shall be dedicated to new organizing)
  • Provide a powerful national voice for RN rights, safe RN practice, including RN-to-patient staffing ratios under the principle that safe staffing saves lives
  • Provide a vehicle for solidarity with sister nurse and allied organizations around the world
  • Create a national Taft-Hartley pension for union RNs
    • Above all, the new organization states that it is founded upon the guiding principle that all RNs should be represented by an RN union.
    "When spider webs unite they can tie up a lion."  -African Proverb
    One Question, Three Different Answers
    A mathematician, an accountant and an economist apply for the same job.

    The interviewer calls in the mathematician and asks, "What does two plus two equal?" The mathematician replies "Four." The interviewer then asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says, "Yes, four, exactly."

    Then the interviewer calls in the accountant and asks the same question. "What does two plus two equal?" The accountant says, "On average, four—give or take ten percent, but on average, four."

    Then the interviewer calls in the economist and poses the same question. "What does two plus two equal?" The economist gets up, locks the door, closes the shades, sits down next to the interviewer and says, "What do you want it to equal?"