Why Do People Make Dumb Decisions?

Remember that project meeting where a stakeholder made a decision so baffling that you struggled to keep a straight face? Maybe it derailed a perfectly good plan, ignored expert advice, or just seemed like a surefire way to fail. Why did they do that?

The truth is, people—including smart, experienced leaders—make questionable decisions all the time. I make dumb decisions. You make dumb decisions. If you’re making more decisions every day than others, surely you’re more likely to make a dumb decision too. But are these choices truly dumb, or is there something else going on?

The Science Behind Decision-Making

At its core, decision-making is a complex process that blends logic, emotions, and subconscious biases. The human brain isn’t wired to make perfect choices—it evolved to make fast choices. That’s great for survival but less helpful in a high-stakes project.

There are two primary modes of thinking:

1. System 1 Thinking (Fast, Intuitive, Emotional)

   • Decisions made on gut instinct, pattern recognition, and past experience.

   • Useful for quick, everyday choices but prone to errors.

     
     

2. System 2 Thinking (Slow, Analytical, Logical)

   • Decisions that require conscious effort, reasoning, and weighing options.

   • More accurate but mentally demanding and time-consuming.

Most of the time, we lean on System 1 because it’s efficient. But when we do, we’re vulnerable to cognitive biases—mental shortcuts that distort our judgment.

Why Do We Make Dumb Decisions?

We tend to favor information that confirms what we already believe and ignore evidence that contradicts it. A project sponsor who believes an approach will work may dismiss valid concerns simply because they want to be right. This is confirmation bias. It’s hard to identify and hard to disrupt and we all suffer from it.

Ever heard someone say, “We’ve already invested so much in this—let’s see it through”? That’s the sunk cost fallacy. People struggle to abandon failing initiatives because they don’t want to admit past investments were wasted. In the worst cases, their job is on the line so they compound bad decision after bad decision. They’re in self-preservation mode.

Sometimes, stakeholders agree to a poor decision simply because everyone else seems on board. The pressure to conform can suppress dissenting voices and lead to disastrous outcomes. In the playground it’s called peer pressure, in the boardroom it’s called group think. It has the same effect. We get “carried along” to do things we wouldn’t do if we were on our own.

Ego comes into it soo. Some leaders believe they have all the information they need, even when they don’t. This can lead to reckless choices based on incomplete data.

Time pressure pulls us into make dumb decisions too. In fast-moving projects, there’s often pressure to choose the quickest, easiest solution—even if it creates bigger problems later. That’s assuming anyone stopped to think about what might happen later.

These cognitive biases don’t mean people are foolish. In fact, they are unavoidable—even the most rational thinkers fall victim to them.

What’s Happening When Someone Makes That "Dumb" Choice?

Not all choices that look dumb are as dumb as they look. From your perspective, their choice might seem irrational. But what if:

• They have access to information you don’t? Maybe they know about a regulatory change, an upcoming merger, or a market shift that makes their decision look smarter in context.

• They’re balancing competing priorities? What seems like a poor project decision might be the right business decision when considering the bigger picture.

• They’re playing the long game? Some choices look bad in the short term but pay off over time. Think of companies that sacrificed short-term profits to invest in innovation—Amazon, Tesla, and Netflix all made "dumb" decisions that later proved visionary.

It’s easy to judge when we only see part of the puzzle.

Dumb Decision or Inspired Move? It’s All About Perspective

Many of history’s greatest business decisions were ridiculed at first. Apple removing the headphone jack? A "stupid" idea—until it became the industry norm. Airbnb’s decision to let strangers stay in homes? Seemed absurd—until it revolutionized travel.

The same applies in everyday business. A decision that seems misguided today might turn out to be the right move in the long run. Conversely, a choice that looks brilliant now could prove disastrous later.

So the next time a stakeholder makes a decision that seems baffling, ask yourself:

• What information might they have that I don’t?

• Are they considering factors beyond what’s visible to me?

• Could this be a long-term play that looks bad now but pays off later?

Approaching situations with curiosity rather than judgment can transform how we work with stakeholders—and might even make us better decision-makers ourselves.