Today’s decision-making trap (which is the 7th out of the 8 we will cover), is Prudence.
Prudence leads us to be overly cautious when we make estimates about uncertain events.
Example: you’ve invited 100 guests to a backyard barbeque party. I don’t think we’ll have more than 25-35 attend. So you only prepare enough food and arrangements for 30 or so people. 60 end up coming, and prudence has caused you a serious headache.
Prudence is the other side of the coin of overconfidence.
Closely related: pessimism and optimism. Just as unbridled optimism can get you in trouble at times, so too can unnecessary pessimism.
In business, accuracy in estimation and forecasting requires you to rely on data and maybe a little intuition mixed in there. It can’t be purely gut feeling or emotion.
The prudence decision making trap can cause you to be unprepared to capitalize on real potential opportunity. As leaders and managers, we must avoid the error of being overly prudent and cautious so that we can confidently take the next steps needed to achieve growth.
