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  Apply the Psychology of Problem Solving and Decision Making.

Solving problems and decision making are key aspects of running any organization yet we tend to perform these tasks intuitively without much self-awareness or formal training. Psychologists have studied these topics intensively for decades and highlighted the errors, biases and habits that hinder our performance.

We offer a set of workshops to help you appreciate and understand the sub-optimal way we naturally operate and recommend methods to solve problems and make decisions in a more effective way.

Individual Problem Solving: The workshop helps managers to become aware of the common errors we all make such as such as rushing to solutions before understanding the problem and over-caution. It also recommends methods for increasing effectiveness in problem solving.

Individual Problem Solving.

Image of Problem Solving Dial.

Image credit: © Olivier Le Moal /

Our main offering in this area is a thought-provoking workshop intended to help improve effectiveness in problem solving. The first goal is to raise awareness that there is a problem. We tend not think too deeply about our approach to solving problems - we just get on with it. We like to think of ourselves as rational problem solvers. The workshop covers some psychological models and makes recommendations for increasing effectiveness:

Common problems:

Typical problems include:

  • Complacency - not realising there is a problem in the first place.
  • Framing - making the wrong assumptions about how to define a problem can lead to ineffective solutions.
  • The tendency to rush to action - before analysing the problem and considering alternate solutions.
  • The tendency to wait for more information before taking action.
  • The tendency to seize upon a single factor of a complex problem rather than taking a systems view.
  • Focusing on feelings versus solutions.

Models of Problem Solving

Daniel Kahneman has described how we seem to have two modes of thinking, a quick, intuitive style for common problems in which we make assumptions and take-shortcuts, without even thinking (fast and frugal heuristics). It is subject to errors but is effortless and gets us there most of the time. Then there is a slow, deliberative style which we use for less common, more complex problems, in which we attempt to be logical and rational. Even in this mode we make errors because of limitations in our neural circuitry such as short-term memory capacity, our learning mechanisms (e.g. confirmation bias) or our natural inability to handle numbers effectively (e.g. not using Bayes Theorem).

Gary Klein has described an alternative model: Naturalistic Problem Solving. Based on studies of people facing real-world problems (e.g. forest fires), Klein found two modes of problem solving: one is based on matching the current problem to previous situations. If there is a good match between the current situation and a previous one where there was a successful outcome, rather than wasting time thinking about it, the most efficient approach is to simply apply the solution that worked well last time to the current situation. This process can be done automatically. If there is an approximate match, people adapt a successful solution which worked in a previous similar situation, to fit the current one. If no good match can be found, i.e. it is a new scenario, a novel solution has to be found by effortful deliberation, going back to first principles and taking a step by step, logical approach.

The fact that most problems are familiar and do not require deliberation leads us to describe our approach as 'gut feel'. Sometimes we get an intuitive sense that a situation 'is not right' without explicitly being able to put our finger on why. Klein argues that is because the situation matches one that had a negative outcome in the past. We recall the emotional reaction before the details of a specific incident. His model predicts that errors occur when we match the current situation to a previous one inappropriately and select the wrong solution or adapt a previous solution ineffectively.

We also cover:

  • Analogies and their limitations.
  • Raising our game statistically.
  • Emotional self-regulation.
  • Finding the right balance between experimentation and deliberation.
  • Off-the Shelf Models.
  • Problem Solving Methodologies.

Group Problem Solving: Even if individuals did not have their own biases, a whole new class of issues emerge when groups of people collaborate in problem solving. These include: the tendency to put group cohesion above critical thought, the tendency to avoid conflict, power-plays, short-term thinking, complacency etc.

Group Problem Solving.

Image of group decision making.

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Our main offering in this area is a workshop intended to help raise awareness about how groups make decisions, sometimes get it wrong and what can be done about it.

Despite the problems individuals face in solving problems, in the organizational world, the problems groups face are bigger.

Our workshop covers:

  • personality and group dynamics.
  • politics and interests.
  • the need to achieve cohesion and consensus versus critical thinking.
  • power and dominance.
  • the benefits and limitations of diversity.
  • the limitations of voting to resolve differences.
  • potential solutions.

Decision Making: Decision-making is an essential component of problem-solving, but is a discrete element in its own right. It is less to do with finding options than selecting between them. Issues include: various biases such as confirmation bias, risk aversion, impulsiveness, our inability to combine different types of evidence etc.

Decision Making.

Image of a woman making a decision.

Image credit: Shutterstock / Roman Samborskyi

Our main offering is an interactive workshop which covers:

  • Biases in decision making. There is a vast list (e.g. anchoring, through mental accounting to sunk costs). How can you recognise and counter them?
  • The paradox of choice - too much choice can be a bad thing.
  • Limitations in the way we handle probability.
  • Uncertainty and risk. We cover Prospect Theory which proposes that we tend to put more value on a loss than a gain of the same magnitude. Generally we are more risk averse than if we relied on statistical logic yet we often seek risk when the probability of success is tiny (e.g. a lottery).
  • How does personality relate to handling risk?
  • How do we construct preferences? Emotion and choice.
  • How do we know we are getting it right? How confident are we in our decisions? How do we calibrate our decisions? Is optimism realistic or unrealistic?
  • How is decision making affected by time constraints?
  • Algorithms versus Human Judgment.

Critical Thinking: One key skill to address the above problems and help you navigate through complex dilemmas is critical thinking. We offer a workshop to build your skills in this area.

Critical Thinking.

Image of problem solving dial.

Image credit: Shutterstock / Olivier Le Moal

Much of our discourse is based on a set of 'taken for granted' concepts. We rarely question hidden assumptions. We lack a vocabulary to point out logical fallacies. We have a desire to respect people, to give them the benefit of the doubt and avoid conflict. We defer to the pronouncements of experts in areas where there is contention. Unfortunately all this often allows poor decisions to pass unchallenged. Critical thinking helps tease apart the lack of rigour with which we are often faced and reach a wiser view of the world.

Topics covered include:

  • Reasoning, inference and argumentation.
  • Evaluating the strength or weakness of an argument.
  • The Dunning-Kruger Effect - the less people know the more confident they are about their views.
  • Lies, damned lies and statistics.
  • Questioning (often unstated) assumptions.
  • Questioning how a discussion is framed. Why are we looking at the problem this way? Are there other perspectives?
  • Questioning evidence. Who produced the evidence? Did they have a motivation? Does anyone else disagree? etc.
  • Root cause analysis (5 whys).
  • Spotting logical fallacies in arguments. There is a long list of methods people can use to make invalid arguments. e.g. from straw men to slippery slopes. Learn how to identify and counter them.
  • The power and limitations of analogy.
  • Dealing with dilemmas i.e. what do you do when none of the solutions are palatable?
  • How to challenge flawed thinking diplomatically.

Systems Thinking: Another essential element of the manager's toolkit is Systems Thinking. We offer a workshop to help managers examine the relationships between the many factors in a problem and how they interact and play out over time (rather than focussing on a single factor). The "System" can be people with their interests and idiosyncrasies, as much as organizational processes or technology.

Systems Thinking.

Random system diagram.

Image Credit: Gerd Altmann from Pixabay

This workshop helps you build a systems model of your working environment to help you gain a better understanding of its dynamics.

The default way of thinking about the world is in terms of cause and effect. One object carries out a single action which creates a single result - like potting a snooker ball. The real world is more complex.

Interacting Loops.

Often in a system, many factors can affect a result. And some of those influences are in dynamic relationships with each other - such that the outcome can affect an influencing factor which in turn contributes to producing a different outcome. Such loops can cause the outcome to grow or decline unexpectedly. An example of a simple loop is the negative feedback loop used in a central heating system to keep the temperature stable. A thermostat uses the output from a temperature sensor to increase or decrease the output from a heater to keep a room warm. In the organizational world, there can be multiple interacting loops, loops within loops and loops operating over different time-scales. The factors can be physical such as stocks of inventory or intangible such as attitudes or beliefs. Faced with such systems, people come to believe the world is chaotic, random and uncontrollable. In reaction, they attempt to keep things simple by focusing on a single control lever (such as the Bank of England focusing on interest rates) and wonder why the world doesn't behave as they expect.

There are general classes of system structures which are found in a range of different types of system e.g.

  • the negative feedback (or balancing) loop), which is used to keep a system steady. It is widely used in physical systems such as central heating, a toilet ballcock, car cruise control and is found widely in physiology e.g. temperature, blood pressure or blood sugar control and photosynthesis. The balancing loop has a set point (or goal-state) and a mechanism to increase or decrease the output to bring it back to the set point.
  • In a feedforward or reinforcing feedback, the output causes the influencing factor to increase its effect without a set point - producing accelerated growth e.g. the terrible screeching you get holding a microphone near a connected loudspeaker.
  • A delay or lag can occur in loop. It can cause problems in a balancing loop. A correcting action may be made too late, or made when the set point has been reached - pushing the system off-course again.


Peter Senge describes Archetypes which are generic types of system, found repeatedly in the organizational world. Here are six examples (there are more):

  • Tragedy of the Commons. A group of people make use of a limited resource. Individually, none of them act in a particularly greedy or unethical way. But over time the resource is eventually completely depleted and everyone suffers e.g. fish stocks.
  • The Winner Takes It All. In this situation two parties share limited resources. One party becomes successful, acquiring more resources. The less successful, by virtue of having fewer resources loses out further e.g. internet retail versus high street retail.
  • Escalation. This situation involves two parties which view themselves as competing rather than co-operating. A provocative action by one is met by a retaliation by the other. This loop can soon get out of hand e.g. an arms race.
  • Limits to Growth. An agent may be taking action to increase some outcome but factors in the outside world, beyond the system's scope, work against it. So the system has to work harder and harder until a crunch point comes.
  • Shifting the Burden. The short-term effect of a problem is reduced with a short-term low-cost action. Meanwhile the Fundamental Problem is not addressed, festers and comes back to bite you. e.g. paying debts by borrowing, using agency staff rather than training your own people.
  • Eroding Goals. A variant of Shifting the Burden in which the effects of the Fundamental Problem take so long to materialise that it gets forgotten about e.g. the national debt.

Top Image Credit: Alfonso Cerezo from Pixabay

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Oxford Business Psychology 2022