Friday, 17 January 2014

The human tendency to short-change the decision-making process is a given. Keep that in mind when making decisions at work.

The word decision is one that is used so frequently that one would assume that people are adept at making good decisions. Unfortunately, I find it fairly common to see people take the wrong decisions. Decision making is a cognitive process whose outcome is the “the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice. The output can be an action or an opinion of choice.”

We are aware that the typical decision-making process starts with framing the decision to be made; gathering information on the alternatives and how to evaluate them; taking a decision i.e. picking an option from the alternatives; and finally sense making of the decisions outcome so that our decision-making ability can learn and mature from what we learn as feedback from the impact or outcome of our decision(s).

My desire to write on decision making arose because I am constantly amazed to see how decisions are made and the uncommon nature of common-sense that rears its head at times in the corporate world. The human brain is a potent weapon and due to the nature of its talent also has inherent biases that can help in suspending common-sense that is much needed when making a simple decision! Decision-making in the corporate world is challenging. Those at the top do not typically consult with those lower in the hierarchy and when they do what flows back up is usually not honest enough to help in the decision. I particularly am focused on rechecking and realigning top-driven decision-making process and enabling a transparent honest process that helps senior management. The larger the organisation the higher the probability that a 'Dilbert-moment' awaits where the decision-makers i.e. the ‘strategists’ are out of sync with the ‘tacticians’. However, that is for another blog and another day. The focus at this point is on the individual sense-making undertaken by my fellow employees and corporate citizens.

Decision making is both an art and a science but despite building rigour into the process or using a frame-work to structure one’s thoughts I see outcomes that fall short of expectation. Trying to get yourself or others to understand how to weave through a decision making process is always confounded by being unable to relate to the underlying current of how your thoughts or biases get the better of you. In general, the single biggest cause of improper and weak decision-making is because individuals do not attempt to understand or adopt decision making frame-work(s) or processes or because most decisions that we make do not allow for using structured processes or we just don’t have the time or patience to apply structure to the decision-making process! Applying one’s mind is fine but applying it in a manner to ensure that we eliminate guess work and/or cognitive biases that are inherent to rational man is the real challenge.

I can assure you that most individuals may state that they are going through this cycle of decision-making but the reality is that a good decision outcome is still elusive as the negative consequences of the decision have been potentially weighed down by sheer optimism or some inherent bias. In simple terms, we are programmed to naturally incline towards a desired outcome. This is typically more pronounced when the decision outcome leads to gain for the decision making individual rather than a loss for him or her. We are wired towards gain and will rate our chances of success far higher than our chance for failure i.e. we have an inherent optimism bias!

Decisions are impacted not only by lack of vigour in any process but because we selectively downgrade the vigour as many of us have already got a bias towards an alternative or there is a bias to be seen to be acting immediately and with fervour. This could be cultural but in general I notice that some organisations have an organisational culture that values speed over deliberation and an active fear of ‘analysis paralysis’. However, a 'bias to action' is not undesirable but it becomes undesirable if it is a trade-off to manage perceptions and/or rush an agenda when making a decision!

Another critical aspect of flawed decision-making is the motivation and incentive inherent in the outcome of the decision. I feel that if we force a better review of the motivation and the incentive for the decision-maker then it forces clarity and honesty in the decision-making process. Sometimes acknowledging this takes away the angst arising from hidden agendas and personal desire to achieve an outcome that is what one wanted in the first place but then forced the outcome in any case. If your internal or hidden agenda is moving you away from a sensible outcome then force yourself to think of the desirability of the outcome and what would be needed to fix the mess arising from the wrong decision being implemented or encouraged. Consult openly and freely. Get as much insight to ensure that you understand what is needed to get to the right decision. The notion that “I know it all” or that hierarchical positioning has given you a divine advantage is at best a misnomer. How many failed decisions have led to a post-mortem where someone senior has admitted to having made a mistake? Many managers suffer with a “decide-first-then-advocate-later" model of decision making. This is the classic situation where the decision is made but now all facts are to be arranged to ensure that the decision appears to be the logical one! How relevant is data in the decision? Do you have the data? Do you understand the data? Poor data analysis is the best foundation stone to inappropriate decisions where the decision is being made that would impact the very data in the future that is being used for the current assessment. The issue is usually not the absence of data. It is the absence of information. Additionally, at times people hesitate from making the full or total investment required as they are fearful of taking risk (even if it is a calculated risk). This is a function of the corporate culture that is geared towards either encouraging risk or actively dissuading risk. To me this is like an artificial 'speed-throttle' that kicks in just when you need to speed up on the competitive highway. Not many admit to this but this is another reason why some decisions stop short of achieving 'greatness'.

Human beings tend to frame options in a binary manner. It appears to be a choice between two alternates but given the bias for action we need to understand that on many occasions a new option emerges that was not foreseen or is a variant of one of the earlier options. To me the need of the hour is to develop the ability to identify emergent options and have the wherewithal to incorporate the same into a highly flexible decision-making process that is dynamic and not static. This is where the feedback loop and on-going learning can do wonders to how one thinks about a decision and evaluate options.

If I could summarise my own approach to decision making then I would offer the following simple guidance:
  • Be transparent and seek guidance to the extent needed
  • Figure out 'hidden agendas' and the intent of the different players involved in the decision-making process
  • Focus on data but also focus on deriving information from the data
  • Understand if there is sufficient risk factored into the process or are you applying illogical constraints (will help in out-of-box thinking)
  • Evaluate alternatives besides binary options. Did you evaluate potential contingencies or emergent options
  • Develop solid feedback mechanisms to your decisions
  • If using past intuition or experience just confirms that the rules of engagement and the characteristics of the same problem are actually the ‘same’. It is surprising how people expect the same style or decision outcome to work on a consistent basis over time and space
  • Be aware of any inherent biases in your thinking and actively consult to bring the same down. Having a devil’s advocate or mentor involved in the process can help also
  • Are the objectives of the decision in line with the organisation’s objectives and goals. What are you aiming for needs to be clearly defined and understood by yourself (before you try to explain them to others).

In the end, I concede that you will be party to many bad decisions at different points in your career journey. No shame in that. The shame would be to be an on-going party to bad decisions and to not learn from them as you move forward in your career. Right?


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