Behavioral Economics has exposed that not many strategists making crucial decisions consciously consider cognitive biases. These biases are systematic human tendencies to deviate from rational calculations. In strategic decision making, leaders need to recognize their own biases, as these biases influence important strategic decisions made by the smartest managers in the best companies.
This slide deck begins with a discussion on the 9 most common Cognitive Biases in humans:
1. Conservatism Bias
2. Base Rate Neglect
3. Confirmation Bias
4. Sample Size Neglect
5. Hindsight Bias
6. Anchoring and Adjustment
7. Mental Accounting
8. Availability Bias
9. Framing Bias
These subconscious biases impair strategic decision making. Leaders need to manage them to improve corporate performance.
The presentation then discusses the results of a decision making study quantifying the financial benefits of processes that "de-bias" strategic decisions and make a case for applying behavioral strategy. Next, there is a deliberation on the 3 key factors affecting decision making effectiveness.
Finally, the deck talks about the 5 Building Blocks of Behavioral Strategy that are extremely useful in offsetting human biases and enabling unbiased decision making:
1. Counter Pattern Recognition Biases by Reframing the Perspective
2. Counter Action-oriented Biases by Recognizing Uncertainty
3. Counter Stability Biases by Changing Things Up
4. Counter Interest Biases by Making Them Explicit
5. Counter Social Biases by Depersonalizing Discussions
The slide deck also includes some slide templates for you to use in your own business presentations.
This comprehensive slide deck delves into the intricacies of cognitive biases and their impact on decision-making. It highlights the importance of recognizing and mitigating biases to enhance strategic outcomes. The presentation includes detailed analyses of various biases and offers practical frameworks for leaders to implement behavioral strategies effectively. It also provides actionable insights and templates to facilitate the application of these strategies in real-world scenarios. This resource is essential for executives aiming to refine their decision-making processes and drive better business performance.
Got a question about the product? Email us at flevypro@flevy.com.
Source: Best Practices in Decision Making, Cognitive Bias, Behavioral Economics, Organizational Behavior PowerPoint Slides: Building Blocks of Behavioral Strategy PowerPoint (PPT) Presentation Slide Deck, LearnPPT Consulting
This PPT slide outlines the essential components that contribute to effective decision-making in strategic contexts, such as acquisitions or capital expenditures. It emphasizes 3 critical elements: gathering facts and analysis, perceptions and judgments of executives, and a defined process. Each of these elements plays a significant role in shaping the quality of decisions made by leadership.
The first element, "Gathering facts and analysis," highlights the importance of thorough data collection and analysis. This includes detailed financial modeling and sensitivity analysis, which are crucial for understanding market reactions. The slide indicates that this element accounts for 8% of the performance explained by the decision-making process.
The second element focuses on "Perceptions and judgments of executives." This aspect considers how company or industry variables influence executive decisions. Factors such as the number of investment opportunities and the predictability of consumer tastes are included here. This element contributes 39% to the overall performance of decision-making.
Lastly, the slide discusses "A process" that facilitates the exploitation of gathered analysis to reach decisions. It underscores the need for a structured approach that encourages diverse perspectives and open discussions. This element is shown to be the most significant, accounting for 53% of the performance explained.
Overall, the slide conveys that all 3 elements are interdependent and crucial for formalizing sound decisions. For potential customers, the insights provided can guide the development of a robust decision-making framework that integrates these elements effectively.
Did you need more documents?
Consider a FlevyPro subscription from $39/month. View plans here.
For $10.00 more, you can download this document plus 2 more FlevyPro documents. That's just $13 each.
Decision Making Cognitive Bias Continuous Improvement Growth Strategy Presentation Development Organizational Behavior Behavioral Economics Quality Management & Assurance Total Quality Management Vision Statement Market Research Core Competencies Competitive Advantage Human Resources Pyramid Principle Porter's Five Forces Communications Strategy Balanced Scorecard Innovation Management Hoshin Kanri Strategy Deployment & Execution Strategic Planning Kaizen Product Launch Strategy Product Strategy Product Adoption Problem Solving Consulting Frameworks
![]() |
Download our FREE Strategy & Transformation Framework Templates
Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more. |