Failure in Innovation Decision Making

Abstract

In this chapter cognitive traps are addressed that may raise the likelihood of failure in innovation decision making processes. At the beginning of the chapter we will discuss why managerial decision making processes in innovation projects are marked by challenging attributes such as novelty, uncertainty, complexity, a high level of conflict intensity and volatility. Managers can deal with those challenges only within the limits of their “bounded human rationality”. Based on a cognitive psychological perspective, typical biases in judgment and decision making in innovation contexts are presented. It is argued that bad decision outcomes and experiencing failure in innovation decision making is not to be avoided completely: biases are a part of human decision making. However, one effective strategy to address biases in decision making is presented: Embracing and accepting one’s own cognitive limits can actually reduce the vulnerability to typical biases in managerial decision making.