Today’s businesses must innovate and evolve to stay ahead of the competition. However, despite the best efforts of business leaders, many organizations struggle to produce new, innovative ideas to keep up with the changing landscape. This is partially due to the limitations of the human brain.

This article delves into the concepts of bounded rationality and cognitive tunneling, two limitations that can make it difficult for businesses to produce new and innovative ideas. Leaders who are aware of these challenges can take steps to mitigate them, such as allowing for more time to make decisions and encouraging the exploration of multiple options.

Bounded rationality

Have you ever found yourself making a decision that you later regretted? Perhaps you chose the wrong item on a menu or made a rash purchase without considering all your options. You’re not alone. This is where bounded rationality comes in. In plain language, it means that our brains are only able to process a limited amount of information at a time, which can lead to less-than-optimal decisions.

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