decision making

Moral Choices

What makes a good decision maker – the three ingredients

Psychology / By

What makes a good decision maker – the three ingredients

A 2004-2005 Teradata Report on Enterprise Decision-Making showed that over 70% of the respondents in their survey said that poor decision-making is a serious problem for their business. Other research in the UK conducted by the research agency YouGov for the Investors in People organization highlighted the negative impact that poor decision-making was having on employees. Other research in the area of organizational performance is consistent, with some suggesting that well over half of all decisions fail in some way. Specifically that the outcomes of the decision making process was poor – the ‘wrong’ decision had been taken or simply never implemented. It seems obvious that if decisions can fail for up to half of the time then organizations need to pay very close attention to the quality of their decisions and the people carrying out this role, but to-date, there is not much evidence that they are.

Decision-making is an age old problem that is being compounded today by increasing knowledge, population, complexity, speed and change. The number of decisions being made is increasing as is the pace of change and the number of people in an organization involved in the thousands of day-to-day decisions, from a new product launch to a decision on a new hire that have to be made. Decision-making is an essential requirement of management especially at the senior level and is perhaps the true core competence of leaders … ‘our society has largely neglected the fact that sound judgment and decision making are the crux of many professions’ (Smith et al 2004). The very best leaders appear able to make crucial decisions effortlessly ‘standing on their feet’ drawing on unseen resources of domain knowledge and experience that set them apart from the crowd. How effective managers and staff are in general at making good decisions is a moot point and understanding the process of high performance decision making is becoming critical to organizational success.

Problem-solving and decision-making are closely linked as each requires creativity in identifying, developing then evaluating options from which a course of action needs to be chosen. A problem always denotes that there are options to be chosen from – if there is a known solution then this is a puzzle not a problem. A decision is basically a problem solving process under uncertainty, so the steps or stages of decision making are more or less the same as those for problem solving. There are many n-step problem solving routines to guide decision making but at the heart of the decision making problem are the following three main aspects: how the problem is seen, how alternatives are generated, and how the decision is actioned.

The three key aspects of high level decision making:

  • Proactive cognition is a feature of people who actively seek to change the environment and not passively react to it. People strong in this feature scan for opportunities in the world preferring to make choices rather than follow procedures and create novel options by seeing problems differently rather than considering just the obvious.
  • Deciding is about making the decision, weighing and chewing over the options and above all considering the risk of alternatives. People who are high in this ability often draw on extensive domain knowledge and experience enabling them to make mental short cuts and come to a decision apparently quickly hiding the deep processes really going on.
  • Finally Action Control – making and enacting the choice. The effective planning and scheduling of actions to deliver the decision are examples of behavior of people who are able to ensure that decisions are not postponed, procrastination is avoided and decisions are implemented without delay.

A good decision is the direct result of clear criteria, the scope of the choice to be made together with the risk of each alternative – then taking action. From this perspective a good decision is the outcome of a process of optimally achieving a given objective from a certain starting point. A good decision is a logical one (or at least defensible and traceable) based on the available knowledge to hand that answers a particular organizational problem. Measuring whether or not decision making is good or bad needs to assess both the process and the outcome, the effectiveness and the quality of the decision making, as these are two quite distinct things. Effectiveness is how well the process of decision making is managed and how learning takes place – what caused a poor outcome to occur is fed back into the process. Output quality is to some extent comes well after the decision has been taken and is a reflection whether the right choice was made as well as on how well the choice was placed into action and implemented. There are many examples, particularly in the political world, where there is an assumption that the decision is the same as the implementation. A good decision making process therefore integrates the choice with the implementation and looks at the outcome to ensure learning takes place.

It is this latter point that completes the circle – it is a balanced decision making process that seems to be about right. Consciously attending to all three areas of the decision making process is key. The seeking of ways to control and act on the world, weighing up options carefully thinking about the choice then ensuring implementation takes place are the three key facets of effective decision making and features of high performers. When this balanced process is in place in more organizations perhaps then can the abysmal performance we currently have in this core area be improved.

Royston

The Means-Ends Problem Solving Technique

Tools & Methods / By

MEA (Means-Ends Analysis) is an a approach that puts together aspects of both forward and backward reasoning in that both the condition and action portions of rules are considered when we decide which rules to apply. The logic of the process takes into account the gap between the current situation and the desired goal – where we wish to get to and proposes actions in order to close the gap between the two.

The method uses a set of rules that enable the goal to be achieved iteratively. The rules consist of two parts: rules that are prerequisites and ones that show the changes to be implemented.

MEA works by considering the present position as the current state and the objective as the goal state. The differences between the desired and the goal state are considered and actions are proposed that reduce the ‘gap’ between the initial and desired states.

Since the process is working from the current state towards a goal it is said to be doing forward chaining which implies a search strategy and a procedure that regards goal achievement as success – or if the outcome of a sub-goal is failure a new search is begun (or the process terminates as not possible).

Consider the following examples.

  1. In a travel problem the current state and the goal state are defined by physical locations where we are now and where we have to get to.
  2. In an assembly problem such as an IKEA flat pack the current state and the goal state are defined by the raw materials lying in a heap along with instructions on the floor and the finished product in your kitchen.

Aunt Agatha and the invite to tea

Aunt Agatha lives in Brighton and has invited me to tea this afternoon – she has a lot of money which she may leave to me which is actually a longer term goal for this journey. I am sitting in my office in London and need to decide how to get to Brighton.

Now there are lots of ways to do this: train, car, bus, on foot, private jet or roller blades but I subject myself to the following cost constraints:

  • I must arrive at Brighton today within three hours
  • The journey must cost no more than $100
  • Any distance less than one mile must be walked

To begin this process I consider the available means against my constraints and decide on taking the train via Victoria to Brighton. To do this I need to leave my office and travel to the main station at Victoria which is a new goal.

To get to Victoria I can walk, take a taxi, bus or go by underground. Because of time constraints and cost I decide to take the underground to Victoria – this becomes a new sub goal. The nearest tube station being less than one mile away I walk

On arrival at the station I find the line is down due to a breakdown (goal failure). I can return on foot to get my car to drive to Brighton but this moves me away from my goal on cost and distance. I decide to take the bus to Victoria which becomes a new goal and as the distance is less than one mile I walk to the bus station.

I take the bus to Victoria alight and walk to the station office and purchase a ticket to Brighton. At Brighton I have to get to Agatha’s house – I can use the Bus, Taxi or Walk. As the distance is less than one mile I walk and arrive at Aunt Agatha’s house the end goal.

Just then my cell phone rings with a message and it’s Aunt Agatha, ‘I hope you don’t mind but I forgot I have to be in London today perhaps we can make it next week…’ Arghhhhhhhh!!!

Some problems for you to solve…

Vicars and Tarts

There are 3 Vicars and 3 Tarts and a boat on one side of a river and the church on the other. How can the 6 of them get across the river for morning prayers in the boat subject to the following constraints?

  1. There must be at least one person in the boat
  2. There cannot be more than two people in the boat at any time
  3. There cannot be more Tarts than Vicars on either bank otherwise the tarts will take advantage the vicars and commit original sin.

Three coins

Three coins lie on a table in the order tails, heads, and tails. In precisely three moves make them face either all heads or all tails.

Be more critical and critique what people say

decision making / By

To a large extent in the academic and business world things move forward by a thorough critique of the existing body of knowledge or by taking apart the position people take on a particular issue (usually in hindsight). Often very strong positions are held based on very shaky ground and expertise claimed based on little supporting evidence. I think it is always interesting when you look at a newspaper report or an article in the trade press one can always determine the authors own position vis a vis the issue being discussed as well as the position they take in the field of knowledge they are advancing.

What we need to do when we look at a report being presented to us at work, or even on the nightly television bulletin, is to learn how to evaluate what people say and weigh the truth and merit of the argument they are proposing.

When we listen to these arguments try to assess:

  • What are the assumptions being mobilised by the author from her own perspective to support the case and what approach is being taken in the construction of the argument as far as evidence is concerned.
  • What is the purpose of the review or report – what is it for and for whom is it written?
  • What is being included or excluded from the author under scrutiny in terms of the body of knowledge and alternative views?
  • How are countervailing views dealt with and what form of words is being used to describe them – dismissive, pejorative or supportive?
  • How gaps in our understanding of the issue are explained – or are they glossed over and simplified in order to trivialise opposition?
  • What is the actual or implied call to action – what is it the writer wishes you to buy or accept that forms the core of the message?

I personally also ask – so what have you brought to the party, what contribution have you added to my understanding of this topic?

The way to read a newspaper follows the same approach – it means we engage with the author and as a consequence perhaps we will learn something. Remember we should not accept any assertions, claims, or recourses to expertise from any authors of these papers or articles unless they demonstrate their expertise with erudite argument. We need to look at all of them with a skeptical eye and try to get behind the purpose of the message and how it is aimed to persuade and orient opinion in a certain way and in business to ensure the ‘right’ decision is made.


Royston