Decision Quality Blog

“Are you a good decision-maker?”

“And what about ‘we’? When you think of the group, do ‘we’ make good decisions?”

I will often start a decision workshop asking this series of questions. Given that the people in the room are typically senior managers and leaders of big organizations, the answers to the first question are different versions of “yes,” as you would expect. If you’re a senior person you’ve made a lot of decisions and a lot of results have been attributed to your choices and actions. It’s also true that you may have gotten lucky, but that’s a different discussion.

The answers to the second question tend to vary more. Once in awhile people think the collective is smarter than the individuals. Mostly the answers tend the other way. Why? When you dig, you find that people don’t trust each other, feel discounted in the decision process, or disagree with fundamental issues like the nature of the problem.

Problems in the first instance are attributable to a simple fact: While we are all used to making decisions and have made many of them, few of us have actually been taught how to make decisions. That seems like a subtle distinction, but it turns out to be a big deal as the stakes increase. The consequences show up in what we think of as “decision traps,” or what psychologists call “cognitive biases.” Put simply, we get predictably and repeatedly stuck, blind-sided, and waylaid as we try to make big decisions.

Problems in the second instance, the “we,” arise partly from the first problem, and partly from organizational issues that cause us to pack all the dialog and quality checking on big decisions way to the end when it’s too late, too hard, or too risky to dissent, diverge, or dig in.

If the stakes in a decision are low, process and method hardly matters. Usually taking the first good alternative works out just fine. An example of this is picking a movie to see. Read a review: If it sounds good, go. You’ll know soon enough if it was a good choice, and the costs aren’t that high if you’re wrong. That’s not a good way to figure out whether you should enter a new market or the best way to structure a multi-million dollar deal.

We are practitioners of something called “decision quality,” a discipline first laid down in the 1960’s at MIT with an eye towards making high quality decisions where there is a lot of uncertainty. In other words, decisions that required a mix of data and intuition, inquiry and dialog, and ultimately making a choice where the feedback loops are long and you simply don’t get to know beforehand how things will come out. Here are some of the key ideas to help you with those kinds of decisions.

A decision is only as good as the weakest link. Your decision making process is only as good as the weakest link. If you want to make consistently high-quality decisions, you need to “divide and conquer”: break the decision down and work it a piece at a time. Standardize your critical decision-making on a single model like the one we use. Put in place the training and tools necessary to create fluency with your people with the model and processes of declaring and working a decision. Weave decision quality into all your management and coaching dialogs so that your people come to understand the importance you place on high quality decision making.

How you frame decisions matters. As a leader or manager, make sure you focus yourself and your people on doing what it takes to properly frame decisions. As you begin the journey to improve decision-making in your organization, you should have a hand in declaring or inspecting every significant decision frame. Later, as people become more confident and fluent, you can turn them loose to do their own framing, with you standing by as coach and occasional gadfly.

You can’t judge a decision by the outcome. In the case of organizational decision-making, you should do the work necessary to install what we call a “decision dialog process,” one that is appropriately rigorous and flexible for the types of decisions you and your people make. With that in place, you will be able to judge decisions while they’re being made, particularly when there are significant uncertainties, by evaluating the quality of the work done at each of the Six Decision Points: frame, people, process, alternatives, values, and information.

Decisions are linked. It’s not possible to map the future with any degree of uncertainty. And yet making decisions in the face of uncertainty is what leaders and managers are paid to do. As much as possible, you need to think many moves ahead. You need to see how your decisions might link up, and how others might link them in ways you didn’t see, and then set your frame accordingly.  Build “future thinking” into your decision dialogs. Ask yourself and others, “What decisions will this decision likely influence?”

You can’t know everything beforehand. Identifying, understanding, talking about, and ultimately quantifying uncertainty are all part of good decision making. Help your people talk about and understand risk. In doing that, pay particular attention to identifying the “critical uncertainty,” the big unknown on which the decision really hangs. Seek information to take the mystery out of risk. Test you alternatives by looking for information that disproves and disconfirms what you think you want to do. Use your new insights to reframe the decision, identify alternatives, and hone your values so that you can with confidence choose a path, even though you don’t know for sure the outcome.

People have different risk profiles. Your tolerance for risk colors how you process each part of a decision process (frame, people, process, alternatives, values, and information). Be as explicit as you can at the beginning of every decision process how much risk you’re willing to take. In putting together decision teams, think about risk tolerance. In the case of a large, consequential decision, you might want to create a team of people with a broad risk profile. If you’re looking for breakthrough ideas or to get something, anything going, load up the team with people willing to take personal risks. If you’re thinking about something that seems too good to be true, bring in some of your worriers and see what they have to say. 

Organizational Decision Making is a Balancing Act. You can certainly make these sorts of balancing decisions on a case-by-case basis. As an alternative, create rules around the four paradoxes for the different types of decisions people in your organization regularly make.
•    Inclusion vs. Efficiency
•    Empowerment vs. Control
•    Rules vs. Method
•    Head vs. Heart

You can express this in terms of high/lows and let individual actors work out the specifics, or by being directive and prescriptive in how you want people to manage each paradox.

Decision quality must be built in step by step.  Build quality into your decision framework and into the processes by which you manage how your people make small and large decisions. Pay attention to every step. For smaller decisions, use tools, training, and technology to ensure quality throughout these shorter decision processes. Don’t wait until a choice is made to try and catch mistakes or poor reasoning. For larger decisions, build decision processes that create dialog and critical thinking at specific junctures like framing, values, and alternatives to ensure alignment and agreement on these critical components of decision-making.

It’s not a decision until you commit. Having worked a decision to a choice, lock it down, and do what it takes to get it implemented. Harvest the learning, and then move to the next decision. It seems simple, yet most organizations, by the admission of the people running them, do a poor job of turning intention into action. All it takes is attention. Yours. Make “irrevocable allocation of resource” your top priority.

Tags: DecisionMaking, Decision Quality, Commitment, Kevin Hoffberg, Risk