Guest Post by Ed Perkins (first posted on CERM ® RISK INSIGHTS – reposted here with permission)
There is no end to helpful advice about making decisions.
Most of this advice assumes that decision-making is fact-based, procedural, and decision-makers can follow a process. You need to have proper “framing”, know desired outcomes, be objective, evaluate alternatives, etc.
In theory, this is very good advice.
But as we have seen in prior articles (e.g. http://insights.cermacademy.com/2013/11/30-how-not-to-make-bad-risk-decisions-ed-perkins/#more-3026) in practice decision-making is a messy process, and many things can occur that result in “bad” decisions.
In a recently published study, researchers at Duke University’s Fuqua School of Business found that people evaluate the need for a decision based on whether they view the implications of the solution as desirable.
If they are skeptical of the solution(s), they tend to deny that the problem exists.
The researchers used some policy-related topics such as global warming, air pollution, and gun crime, and presented study participants with two solution options.
Interestingly while most participants agreed with the premise of the topics (the need for a solution), they disagreed with a solution if they felt that solution was unpalatable to their ideological worldview.
In their study, they used groups of conservatives and liberals. For conservatives, when the solution options involved some type of regulation, they disagreed (as they were ideologically opposed to regulation), but when it involved a market solution, they agreed (as they were ideologically disposed to free markets).
Lest they be accused of anti-conservative bias, they ran a second experiment on gun control, in which case it was the liberals who disagreed with the solution options that were ideologically challenging.
The researchers called this phenomenon “solution aversion”. They noted that in general people will deny facts that threaten their ideologies, whether they are on the left, right or center.
How does this apply to risk decisions?
We all have seen instances where, especially for risk mitigation, decision makers refuse to adopt a solution. Despite all the evidence, if they don’t like the options they oppose them and argue against the need for the decision in the first place. (“Do we really need to do this?”, “These options won’t solve the problem”, “The ROI is too low/cost is too much”)
Thus the decision may be ‘no decision’ (e.g. keep with the status quo) even though it is obvious the status quo is not a desirable solution.
So now we can add Solution Aversion to Confirmation Bias and Attribution Error as behaviors to be wary of when making risk decisions.
So what should you do
So what does this mean if you are the risk manager requesting a risk decision?
You need to be aware if there are ideological biases that will result in solution aversion and see if you can offer solution options that are not viewed as adverse.
And what does this mean if you are the risk decision maker? This means that if you allow ideological concerns to interfere with your duty and responsibility, you may find yourself increasing the risk to your career longevity – you may be facing the consequences sooner or later.
The news is full of risk decision makers who chose unwisely and were unable to escape the consequences.
 “Denying Problems When We Don’t Like the Solutions”, see http://today.duke.edu/2014/11/solutionaversion
“Solution aversion: On the relation between ideology and motivated disbelief”
Campbell, Troy H.; Kay, Aaron C.
Journal of Personality and Social Psychology, Vol 107(5), Nov 2014, 809-824. http://dx.doi.org/10.1037/a0037963
Ed Perkins is a principal cyber engineer at Quality + Engineering. He can be reached at 971.344.5976,.