Leadership Caffeine: Teach Your Team Smart(er) Decision Processes
Filed under: Decision-Making, Leadership, Leadership Caffeine, Performance
Nothing happens without a decision. Nothing good happens without the right decision. And, in case you doubt the need to focus on making better decisions, spend some time skimming the news.
If you’ve kept up with your health and fitness resolutions thus far this year, you know that even minor adjustments in diet and exercise pay big dividends. The same goes for our individual and group decision-making approaches.
A bit of deliberate effort to strengthen the decision-process goes a long way towards minimizing or mitigating the impact of personal and group biases. Translation, this might just keep you out of those less than flattering headlines in the news.
At Least 5 Questions We Need to Ask Our Teams Before They Decide:
1. “How are we going to make this decision?”
2. “What data do we need to objectively evaluate our options?”
3. “Before we decide, how can we frame this issue in neutral terms?”
4. “What would someone who doesn’t have history with this issue say about it?”
5. “If we were starting a business today, would we invest in this?”
While there are many and varying forms of decision-making traps and nearly countless combinations of cognitive biases that impact our discussion processes, the introduction of and follow-thru on these simple but important questions can clear much of the fog out of the way.
Improve Discussion Quality to Improve Decision-Making Effectiveness:
In working with under-performing management and project teams, one of the critical factors in improving results is in improving the quality of the discussions surrounding key decisions. Use the 5 questions above to strengthen processes and improve the quality of the dialogue and analysis.
Create a process to decide. The act of asking and then developing a process to decide is a powerful step in the right direction. This imposes both accountability and serves as a process guide to corral our all-too-frequent wide-ranging, overlapping and chaotic, emotion-packed dialogue around big issues. Another good practice for teams working on strengthening decision-making effectiveness, is for them to follow the “how should we” question with “What traps might impact our process here?” (See my related posts links below for more on this topic.)
Cut Through the Data Smog. Data is plentiful in today’s organizations, yet we tend to anchor on data that supports our perspectives and dismiss data as flawed when it refutes our case. Challenge the team to think through data needs…and particularly to evaluate confusing correlation with causation…or to avoid sampling on the dependent variable. And of course, don’t forget that in spite of massive advances in business intelligence and analytics software, the quality of the data should always be scrutinized before accepting it as gospel.
Frame for Fun and Profit. Positioning a situation as a gain or loss absolutely biases solution development. Spend time to carefully frame issues…and work to frame them as neutral if possible. Another approach is to invoke F. Scott Fitzgerald’s maxim that, “the sign of a first rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.” Consider framing the issue in different ways and developing solution sets based on those frames.
“Tell me again about your assumptions.” Always invite an outsider in for the big decisions. Someone who has no skin in the outcome can offer the candid perspective so often lacking in our politically turbocharged discussions. Instead of the tame or lame Devil’s Advocate, invite someone in and listen carefully if they tell you that your baby is really ugly.
Let’s Not Escalate this Commitment! Many of our issues resolve around past decisions and whether to carry on or not. Follow the above suggestions and ask and consider the very critical question of, “If we were starting a business today, would we invest in this?” If the answer is “no” put a stake in it. And remember, that the money you spent is a sunk cost…it’s gone. Beware the “with more time and money” discussions.
The Bottom-Line for Now:
This is a big topic with big implications for your firm and for your career. However, the best way to eat an elephant is still one bite at a time.
Starting today, teach your teams to strengthen their decision-making processes by asking the annoyingly appropriate questions highlighted above. Remember, we want to keep you and your firm out of the headlines…at least when it comes to lousy decisions. And the last time I looked, most bosses bestow things like responsibility, money and authority on those who they trust to make good decisions.
Deciding whether to put effort forth to improve how to decide may be the only “no-brain” decision you’ll encounter today.
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Related Posts:
Management Excellence Toolkit, Part 1: Create a Decision Journal
Management Excellence Toolkit, Part 2: Mind the Decision Traps
Management Excellence Toolkit, Part 3: How to Frame Your Decisions for Success
Management Excellence Toolkit, Part 4: Improve Your Estimating and Forecasting Effectiveness
Management Excellence Toolkit: Better Design for Workplace Discussions
Management Excellence Toolkit: Better Design for Workplace Discussions
Filed under: Decision-Making, Performance, Professional Growth, Project Management
Getting to a good decision on big issues is challenging. Getting through the discussions leading up to a decision however, often resembles something on the difficulty of slogging through the Amazonian jungles in search of a mythical lost city made of gold. If you survive the process, you are bound to come out a very different person.
It doesn’t have to be so hard.
Some background: last winter, I authored a multi-part series on the challenges and pitfalls individuals and groups encounter on their way to making more effective decisions (see: The Management Excellence Toolkit for Effective Decision-Making.) And while many of the suggestions for strengthening DM effectiveness involved improving discussion elements, I didn’t tackle the important and separate topic of managing overall discussion quality as a core part of the process.
It’s time to introduce a new tool that will help us separate facts from emotions from opinions, in pursuit of designing our discussions and our way forward, instead of battling our way forward as is commonly the case.
A Powerful Discussion Management Tool: Six Thinking Hats by Edward De Bono
De Bono developed Six Thinking Hats as a tool to take the complexity out of discussions and to engage the full power of groups by ensuring their common focus on a particular element of a discussion. He offers that “arguing our way forward” has its roots in the foundations of western thinking, yet often, what is required to simplify complexity and reduce overall discussion duration, is a method for designing our way forward.
The Six Thinking Hats technique uses colored hats where each one represents a distinct topic theme, including: emotions, negatives/risks, positives, creative ideas, process issues and facts (known and needed).
The facilitator manages the discussion flow by choosing a colored hat and ensuring that everyone turns their attention exclusively to contributing to the topic defined by the hat. A scribe takes notes for all to see and someone else might serve as a judge, calling out “hat violations” as they occur.
While there is no substitute for a great facilitator, Six Thinking Hats is something that you can put to work with your team after few hours of reading time and some live-fire practice. I include a practice scenario below that will help you and your team uncover the power of this guided discussion process. Of course, spend some time reading De Bono’s book before trying it on for size.
Practice Vignette-Let’s Make it Personal:
When introducing groups to the technique for the first time, I provide a practice round on a non-business topic. A favorite practice scenario involves learning from your significant other that he/she has suddenly (out of the blue) decided to quit work tomorrow and pursue opening the Bistro you two have always dreamed about. The only fact that I supply involves the existence of your combined savings, which might tide you over for one year, assuming you don’t use it to start the Bistro. Just about everyone can imagine their own reaction to being on the receiving end of this type of pronouncement from a significant other, and it doesn’t take long to get the discussion started.
In This Case, Emotions Followed by Risks and Negatives Before Turning Sunny:
When facilitating the discussion around any case, it’s important for the discussion leader to apply the hats in an order that works for the situation. The order will vary from case to case. In this situation, the shock and risk of the announcement are likely to breed early, strong emotional reactions. Venting may be required for moving forward. As such, I instruct the group to put on their Red Hats and let the emotions fly.
After some creative expressions of shock, outrage and anger, it’s important to shift away from emotions and start building a productive conversation. In this case, I’m interested in the group continuing their venting, albeit, in a slightly more constructive manner than the Red Hat provided. I ask the group to put on their Black Hats and identify everything that might go wrong with suddenly quitting a job and opening a restaurant. We run a real-time risk brainstorming session.
As the list generation on negatives runs out of steam, I often will guide people to the positive side of the street. At this time, the Yellow Hats go on and the focus is on generating all of the sunny ideas on why this might just be OK. We’re looking for “what can go right” with the idea, and talk of dreams fulfilled, financial independence, freedom from a corporate job and so forth begin to emerge.
Process Notes:
It’s interesting to work with a group after the emotions have been vented and the negatives listed, on viewing the situation positively. It sometimes takes a bit of facilitation effort to move off of Red and Black Hat thinking, but once the positives start flying, the stage is now set for the next phases.
Another important facilitation note. The group can request to move back towards a particular hat at any point in time. The key is that the entire group must go there…not just one person. This technique does not work if everyone has on a different color hat. The goal is parallel thinking…focusing everyone on the same destination at the same time. A good facilitator manages both the group focus and return trips to the various hats as needed.
We’ve Vented, Listed Risks and Allowed Ourselves to Go Positive. Now, We Need Ideas!
In my practice example, I might invoke the Green Hat (creativity/brainstorming) next and follow-it up with a White Hat to ascertain facts…what we know and importantly, what we need to know. The brainstorming process (green hat) is not dissimilar to traditional brainstorming endeavors, and as a facilitator, you can encourage building and jumping and you can even introduce other creativity tools. Remember, the hat doesn’t tell the group how to run the discussion, it simply signals direction.
White Hat discussions must focus on clearly establishing what we know…and importantly, what we need to know. A good discussion on the facts can help minimize data errors and other anchoring, estimating and data-related biases.
Venting Again and then Deciding How to Decide (or at least, Deciding What to Do Next):
After brainstorming on creativity and fact related issues, I typically return to red (emotions) and black (negatives) one more time for some additional venting. Often, there isn’t any. I then have everyone put on my hat (Blue) and discuss and define the process for moving forward.
While You Might Not Face the Bistro Decision…
My silly little vignette has all of the elements of common workplace dilemmas, including: emotions, risk, unknowns, the potential for success and the need for a reasonable way to work forward. It’s not hard to imagine the Bistro discussion in reality and just about everyone acknowledges the potential for the issue to be a relationship killer.
Your strategic decisions are filled with the same issues…and then some, including politics, silo views, conflicting agendas and different views on the best way forward or even the best direction for the business.
If you are facing some tough discussions and decisions, try enlisting the help of an experienced Six Thinking Hats facilitator and watch and listen as the quality of the discussions improve and the complexity and duration of discussions reduce in scale and scope.
If you simply want to find a way to improve discussion quality on your team or in your home, pick up the book, check out the web resources and then start applying the technique. Your groups will enjoy the change, you will develop valuable facilitation experience and everyone will benefit by a bit of parallel thinking!
The Bottom-Line for Now:
Just like the best woodworking tools in the world won’t make me a skilled cabinetmaker, the Six Thinking Hats approach won’t guarantee decision-making success. However, with study, practice and regular application, DeBono’s cute little colored hats can help to transform discussion quality over time. Improving discussion quality is step one on the road to making better decisions.
Management Week in Review for March 4, 2011
Note from Art: every week, I share three thought-provoking management posts for the week. Fair warning: I take a broad view of management, so my selections will range from leadership to innovation to finance and personal development and beyond.
This week’s selections feature content on reinventing management, the strategic and practical implications of upgrade plans for consumer electronics products and some guidance on improving our decision-making by better utilizing outside advisors. Enjoy!
From Gary Hamel’s Management 2.0 blog at the WSJ, “Inventing Management 2.0.” I’m making up for lost time by having missed this mid-February post. Dr. Hamel consistently beats the drums on the need for a revolution in the practice of management, and both his article and the comments here are guaranteed to get the blood of practitioners and students of management pumping a bit faster.
From the post: “Like millions of other would-be leaders around the world, you are being held hostage by Management 1.0—a dense matrix of bureaucratic practices that were invented to minimize variances from plan by maximizing adherence to policy. Despite a lot of high-minded rhetoric to the contrary (often found on laminated cards that begin with “Our Values”), the management model found in your organization most likely over-weights the views of senior executives, undervalues unconventional thinking, discourages full transparency, deters initiative, frustrates experimentation and encourages an entirely unwarranted reverence for precedence.”
From Joshua Gans at the HBR Blogs, “Best Buy’s Buy Back.” Who hasn’t felt the slight (or major) buyer’s remorse as your still new technology gadget is rendered obsolete by the market with a seemingly overnight feature upgrade. Of course, your device still works, and it still offers the same features that excited you when you purchased it in the first place. Enter an interesting discussion and a controversial approach on dealing with this, courtesy of the mega-retailer, Best Buy. And somehow, Apple figures into this mix as well. Good discussion with personal and corporate strategic implications.
From the post: “The strategic question is why Apple doesn’t solve this and work out a hard-headed way to buy hearts. Unlike Best Buy, who has to try their hand at high-priced insurance because they are operating in a highly competitive environment, Apple has some market power, particularly over serial upgraders. Why can’t I subscribe to a plan that allows me to have the latest iPhone? Or, perhaps a cleaner example (free of AT&T and Verizon contracts), to the latest iPad?”
At Fast Company Expert Blogs, Robert Sutton, Ph.D., offers: “Report: We are More Creative When We Help Others, Not Ourselves.“ Bob Sutton (Good Boss, Bad Boss) shares some of the findings from recent studies on decision-making and the power of outside advisors. An interesting reminder that by nature, we tend to over-estimate our own capabilities by a considerable margin, setting the stage for all sorts of follow-on problems.
From the post: “The implication of these diverse studies are quite instructive. If we want to make better decisions, make faster decisions, have a more realistic picture of our strengths and weaknesses, and now, apparently, be more creative, we need to ask others for their opinions and assistance. There is even a kind of weird implication that rather than working on our own problems, we should always be working on others.”
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That’s it for this week’s update. Enjoy your reading and don’t forget to catch up on the latest Leadership Caffeine posts here at Management Excellence.
Art Petty coaches and trains emerging leaders and consults with B2B firms on strategy and marketing. You can reach Art via e-mail to discuss your needs for coaching, speaking or consulting.
Management Excellence Toolkit Part 2: Mind the Decision Traps
Filed under: "To Do" List, Career, Decision-Making, Leadership
Note from Art: Your decisions define you as a leader and a manager, yet we spend very little time in our busy lives finding ways to improve our abilities in this area. This Management Excellence Toolkit Series will help you recognize the challenges and pitfalls of individual and group decision-making and offer ideas on improving performance for you and your co-workers.
Part 1 of this series emphasized the importance of developing, updating and referencing a Decision Journal as part of your program to improve your decision-making effectiveness. In Part 2, we focus on understanding a bit more about how we make decisions, and I introduce the topic of Decision Traps.
How We Decide and The Invisible Traps that Haunt Us:
A good number of researchers and scientists summarize our decision-making process as one of Pattern Matching coupled with Emotional Tagging.
We process situations based on prior experience looking for signs of patterns, and once the patterns are recognized, we attach stored emotional tags to those situations. Much of this happens in the background, with neurons firing in many areas of our brains simultaneously. Our first recognition of the output is often what we describe as our “gut” feeling about a situation.
While the system works well for many familiar situations, it is not without its imperfections. In particular, as we are exposed to new situations that “don’t compute,” our response and decisions are potentially flawed based on our mis-application of an invalid pattern.
There are other vexing and mostly invisible flaws in the machine, including a good number of cognitive biases that lead us, our groups and our organizations into decision-making traps with alarming regularity. The results can be inconvenient to catastrophic.
An Example-When the Pattern Didn’t Match:
In one of my favorite articles on this topic, “Why Good Leaders Make Bad Decisions,” at HBR (subscription or purchase may be required), the authors describe how Matthew Broderick (the general…not Ferris Bueller), the head of the Homeland Security Operations Center during Hurricane Katrina, fell victim to a pattern-matching error.
Broderick, who had served in Vietnam, learned that early reports of disasters were often very wrong, and had developed a process of waiting for the “ground truth” to validate or invalidate the initial information. This served him well on the battlefield, and it also worked fine later at Homeland Security during other hurricane situations. Of course, all of those other hurricanes took place around cities above sea level…a very different situation from New Orleans.
Through a series of conflicting reports, including a CNN report of people allegedly partying on Bourbon Street, Broderick closed the day by indicating in a situation report that the levees had not been breached, although he indicated this would require re-checking the next day. And then he went home.
Broderick was a victim of his own pattern-matching approach, and his experience in seeking and relying on the ground truth let him down (and many others) in a situation that was subtlely and importantly different from his store of experiences.
Vigilance and Prevention Are Critical:
Unfortunately, there are a great number of ways or memories, minds, biases, filters, environments and influences can lead us astray as we pursue the process of making decisions. Throw us into groups, and the social factors in team settings increase the odds of getting it wrong in a big way.
There are no simple cures for avoiding decision-making traps and cognitive biases. The best offense in this case is a strong defense, built on awareness of the traps and hypersensitivity to how situations are framed and decisions developed. Of course, for those offensive minded players and coaches out there, once your strong defense is in place, building processes and strengthening the culture to avoid the traps is eminently doable.
Vigilance is key. Forewarned is Forearmed.
Meet the Decision-Making Traps:
Over the next few posts, we’ll explore some of the more vexing decision traps and cognitive biases, complete with examples and hopefully, your input.
We’ll explore and offer preventive measures for:
- Escalation of Commitment/Sunk Cost trap: the irrational pursuit of a failed approach. The legacy issues are the tough ones to let go.
- Over-Confidence Bias and other Estimating and Forecasting Errors. Your leadership style and the culture in your organization contribute to costly estimating and forecasting issues of all sorts. And mix a group in the equation, and watch out for a really dangerous level of over-confidence to emerge.
- Status Quo Trap: given our druthers, we will typically opt for the decision that best defends the status quo. While there are places and cases for this, the historical record of business is littered with organizations that never emerged from this trap.
- Groupthink: everyone thinks of Kennedy and the Bay of Pigs fiasco, but rest assured, you and your team members are quite susceptible to the suspension of reality and suppression of contradictory opinions that characterize this dangerous trap.
- Framing errors: how an issue is framed…and whether it is framed in terms of gains or losses will most definitely impact the choices developed and the final decision.
- Anchoring Trap: Our own biases, the first information we hear, casual comments from colleagues are all contributors to our propensity to grab hold of early information and then view all other subsequent data through that filter.
- Confirming Evidence Bias: imagine our excitement when we find data to support our perspective. How objective are we about contradictory data? Turns out…not so much.
And a few more.
The Bottom-Line for Now:
Like it or not, we don’t make decisions precisely the way the textbooks describe the process: define the problem, gather and assess the data, identify options and choose the best option. While we might work through those phases, there’s often nothing rational about how we navigate each one…and we most definitely don’t make the “rational choices” that economists would have us believe are the only appropriate outcomes.
This is a big topic…with HUGE leadership and management implications. The first step is awareness of the issues…and then we move to mitigation. Stick with us…keep updating your Decision Journals and I’ll see you in the next post as we breakdown a number of those traps into symptoms, signs and preventive measures.
Remember, forewarned is forearmed. Here’s to better decisions!
Management Excellence Toolkit: Part 1-Create a Decision Journal
Filed under: "To Do" List, Career, Decision-Making, Leadership, Professional Growth
Note from Art: Your decisions define you as a leader and a manager, yet we spend very little time in our busy lives finding ways to improve our abilities in this area. This Management Excellence Toolkit Series will help you recognize the challenges and pitfalls of individual and group decision-making and offer ideas on improving performance for you and your co-workers.
Consider:
“Every decision is a risk-taking judgment.” –Peter Drucker
“Making decisions is the most important job of any executive. It’s also the toughest and the riskiest.” –Hammond, Keeney and Raifa in HBR, The Hidden Traps in Decision Making.
How many decisions do you make in a typical week? If you’re like most managers, the answer is: “a bunch.”
Many of our decisions are fairly straightforward. We have policies, procedures and precedent, and the decisions are effectively programmed. No sweat, limited risk and in fact, it’s easy to train others to make these decisions. It’s when we move outside of the programmed decisions that things get interesting.
The Sticky Decisions that Define Our Careers:
Consider the issue of choosing between multiple candidates for a job or, choosing which projects to invest in and which to place on the shelf.
Compared to the programmed decisions, the way forward for these key decisions is clouded by all sorts of factors: political and business risks, fuzzy information, evaluation errors, biases, opinions, agendas and good old-fashioned ambiguity.
To make matters worse, the effectiveness of the decision is often not visible for some time and even that may prove hard to measure based on the effectiveness of the actions taken to implement the decision.
You Must Develop as an Effective Decision Maker to Climb the Ladder:
As you climb the ladder, the decisions become more ambiguous, more complex and a whole heck of a lot riskier. Of course, you won’t reach the next rung on the ladder unless those who must decide to trust you, develop confidence in your ability to navigate those issues.
Given both the import of decision making on your career, your firm and even your life, it’s important to build decision-making muscle by scrutinizing your processes, your practices and your outcomes. A great place to start is to follow in the footsteps of Da Vinci, Franklin, Jefferson and Drucker (just to name a few) and start a Decision Journal.
Start the Process of Improving Your Decision Making Muscle by Creating a Decision Journal:
First, I’ll tackle the “this is corny” issue. Get over it. Our memories are ridiculously imperfect (a decision making trap!) and it’s critical to capture some key points at the time you make the decision, to be able to effectively scrutinize the effectiveness of the decision some time in the future. Oh, and the list of Hall of Fame Decision Journal Keepers above isn’t too shabby.
Note: this is useful for teams as well, and in project management circles, the use of a decision-log is a good practice.
At Least 12 Items to Capture in Your Decision Journal:
1. Decisions that are more strategic in nature, including hiring, promotions, project choices, investments, competitive moves and anything beyond the programmed level described above.
2. A clear statement of the issue and circumstances surrounding the issue. A common mistake for individuals and teams occurs in how the issue is framed, and we will want to revisit the statement and circumstances down the road when outcomes become clear.
3. The perceived risks you assessed as part of the decision making process.
4. The information you referenced to support the process.
5. The individuals (and your relationship to them) you called upon for input.
6. The individuals involved in directly making the decision and their opinions.
7. Emotional factors and other pressures (e.g. time) swirling around the issue.
8. The decision choices and how you evaluated them, including your assumptions.
9. A description of the planned process for moving from decision to implementation.
10 The expected outcome of the decision. What will determine success or failure?
11. How you will monitor the results of the decision.
12. When you expect to reasonably be able to assess the outcome.
And don’t forget to leave a big space for results.
The Bottom-Line for Now:
This might seem like hard work. Well, it is, and there’s some time involved in both recording the information above and importantly, looping back to describe outcomes and assess what you did right or wrong. However, if making good decisions is as important as I described it above (and it is!), how can you afford to not take the time?
How you record or capture is less important than the act of doing it, as long as the information is organized and accessible. We live in a world filled with productivity apps. From my favorite…a Moleskin notebook to various digital tools, including creating a document template to using voice recordings to tools like Evernote, there’s little excuse other than laziness for not doing this.
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Next Up in this Weekly Series: We’ll begin our exploration of common decision making pitfalls and traps and how to minimize or avoid them. Your assignment in the interim is to start your Decision Journal.
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About Art Petty: Art coaches high potential professionals and develops and delivers workshops and programs on leadership, professional development and building high performance teams. Contact Art to discuss your needs for a program or keynote.
And whether you are an experienced leader seeking to revitalize and develop as a professional, or, a new leader looking for guidance on starting up successfully, check out Art’s book with Rich Petro, Practical Lessons in Leadership at Amazon.com.
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