Three Common Pitfalls in Business Management That Can Impact Decision-Making

Understanding Business as a Reflection of Culture and Leadership

Businesses are not neutral entities but rather a reflection of culture, leadership style, and context. Within them, values, fears, beliefs, routines, and even silences converge to shape how people think and act.

The Challenge of Decision-Making: Balancing Tradition and Innovation

One of the major challenges in business management is decision-making: how to balance tradition with innovation? How can we ensure decisions are not influenced by emotions, hierarchies, or unconscious biases?

Three Concepts to Detect Hidden Dynamics

This article presents three concepts that can serve as practical tools to identify dynamics not immediately apparent but felt. These are present in meetings where no one contradicts, projects maintained out of respect, and repeated decisions without review. They can be sensed in the atmosphere of compliance or the comfortable silence of “this is how it’s always been done.” Detecting them on time is crucial to prevent strategic errors that could have been avoided.

The Dead Horse Theory

The phrase “riding a dead horse” has become a common metaphor in business management. It describes the resistance to abandoning outdated practices or business models.

Accepting that something no longer has a future does not mean disloyalty or dishonoring the past, but rather having the courage to make difficult decisions to ensure business continuity. Letting go at the right time is key for progress.

Organizations persist in ineffective practices due to fear of change or attachment to the past. However, they must accept transformation as part of growth. Businesses do not die from changing; they die from failing to dare.

One of the most notable examples of this theory occurred in 2000 when Blockbuster declined to purchase Netflix for $50 million, considering it an unpromising company. The then-giant of physical movie rentals (VHS, DVD, etc.) failed to recognize the emerging trends towards streaming and digital consumption. In September 2010, Blockbuster filed for bankruptcy. Today, Netflix is valued at nearly $500 billion.

The Ten Percent Rule

This principle originates from strategic analysis and is related to intelligence and national security. It establishes that if nine people in a room agree on a decision or hypothesis, the tenth has the obligation to assume an opposing stance, even if they don’t share it.

The intention is to identify potential errors, blind spots, or alternative scenarios. Its application in businesses, where decisions are often made consensually or within small circles of trust, allows for anticipating unwanted events.

Fostering a critical voice is essential to avoid groupthink. It’s not about seeking conflict but opening the door to new perspectives and reducing the risk of unilateral or poorly founded decisions under groupthink pressure. The issue is cultivating a corporate culture based on critical thinking and diverse criteria.

An example of this rule is the Challenger space shuttle disaster case in 1986. Groupthink prevented questioning the decision to launch the shuttle despite technical warnings advising against it. After the accident, a culture was promoted where, for critical decisions, one team member would always assume the role of “devil’s advocate.”

As economist Jordi Canals notes, “A healthy corporate culture is one that promotes dialogue, listening, and respect for dissent.”

Cognitive Biases

Confirmation bias leads us to seek, interpret, and remember only information that confirms our previous beliefs or decisions while ignoring or discarding what contradicts them.

In the business realm, its presence can be subtle but highly dangerous. We identify confirmation bias when decisions are justified with arguments like: “This has always worked this way,” “we know what we’re doing,” or “the data doesn’t capture what we know about the business.”

This can lead to validating inefficient projects, maintaining obsolete products, or underestimating market signals that contradict the dominant narrative. It becomes a form of “organizational myopia” that blocks the ability to anticipate and adapt.

Countering it is crucial for developing a culture of contrast, where objective data analysis, external opinions consultation, and constant review of strategic assumptions are fostered. Evidence-based decisions, not wishes, memories, or inherited intuitions, should be the norm. True intuition is nourished by experience, reflection, and data. And I add one more element: ethics.

An example reflecting confirmation bias is the Volkswagen case: in 2015, it was discovered that the German automotive giant was falsifying emission data for its vehicles. Key business decisions were made by ignoring actual emission data instead of honestly confronting reality.

These three cases correspond to old problems that persist in many organizations. Despite technological advancements, our emotional mind still operates under the same rules as thousands of years ago.