DECISIONS are becoming harder. That is the conclusion of a recent study by Dr Lorien Pratt and Mark Zangari, which will be published in their upcoming book, Principles Of Decision Making.
Says Dr Pratt: “We have learnt that decision makers in many organisations, whether at the strategic or tactical level, are systematically frustrated.”
She explains that a sort of “analysis paralysis” has set in. In the past, when decision makers felt they lacked enough information to make a good choice, spending time to gather more data and doing more homework often led to the right outcome.
However, today the pace of business is continually accelerating, and the amount of data a decision maker may have to consider has long surpassed what anyone could manage unaided.
Now, decision makers who know how to embrace uncertainty, and can make good decisions swiftly, nonetheless, are more effective.
What substitutes for missing information? Good judgment and experience can certainly help.
However, relying on these in excess, at the expense of hard numbers, introduces the risk of bias: both the inadvertent kind as well as the risk that self-serving individuals will factor into their decisions the desire for personal advancement, ego and other emotional factors that can hurt an organisation over time.
“The good news is that we’ve faced these kinds of complex situations before in history,” says Mr Zangari.
“We couldn’t imagine committing the resources it takes to build a skyscraper, much less expect people to feel safe living and working in it, without careful design and disciplined management. Yet, in big decisions, the stakes are often at least as large.”
Authors Pratt and Zangari say that only 14 per cent of decision makers surveyed routinely follow a careful decision-making process.
While business life becomes more sophisticated, managers are still using older approaches, built for simpler times. They have more data, more complex cause-and-effect interactions, a greater degree of globalisation and competition, and a faster pace of change.
So, how do managers and other decision-makers survive in the face of this complexity? Dr Pratt and Mr Zangari’s research identifies several best practices. Here are some of them.
Write it down
When a decision is documented, then debate about whether it is correct or not can focus on the decision, not its advocate. Comments like “I disagree with paragraph five” avoid the emotions that can cloud thinking compared to “I disagree with you”.
Keep the boss out
“Peer review” and “formal inspection” are mature practices that can be used for reviewing decisions. One of the most powerful findings: a supervisor in the room almost universally interferes with the objective analysis of a complex problem.
Research shows that when you limit decision-making to words — whether spoken or in text — then all thinking is processed through a tiny part of the brain, called Broca’s Area.
“From an evolutionary point of view, Broca’s is like new, experimental software,” says Dr Pratt. “In comparison, the visual cortex is mature, reliable and fast. You can harness your brain’s most powerful processor by using more pictures and diagrams.”
Double-checking by colleagues is an effective way to minimise bias. However, be wary of “groupthink” and “confirmation bias” — factors that can both lead to blindness to the right solution.
Walk and point
Walking, with its alternative left-right motion, as well as gesturing, activates a bundle of nerves that connect the left and right sides of the brain. Because these nerves are packed closely together with others that control memory, emotion, and problem solving, this stimulates these processes as well. Encourage your team to stand up, walk, point and draw.
“What” and “how”
Ask: What are you trying to accomplish? What are you allowed to change? How will you measure whether you are successful?
Businesses environments change rapidly. Yet managers who respond appropriately can be accused of being “indecisive” or “flip floppers”.
Make an effort to explain your decision rationale to employees to avoid frustration.
Often, the most important factors in organisational success are hard to measure. Yet, issues like “fire in the belly”, relationships and informal communication pathways make all the difference.
Ultimately, an organisation is like a ship, where effective management means steering in the right direction every day. Today, many organisations feel like their companies have moved from the open ocean to a turbulent river. They need a new navigational infrastructure to survive.