v) Elements of Decision-making


Two interesting quotes on decision-making from President Obama and Richard Branson

"...was most critical was having the confidence to have people around you who were smarter than you, or disagreed with you, or have perspectives that were different than yours......If I had set up a good process in which I can get all the information, all the data, all perspectives, if I knew that heads around the table covered all the angles......then I could feel confident that even if I didn't get a perfect answer that I was making the best decision that anybody in my situation could make..."
President Barack Obama as quoted by Australasian Interim Executive Association 2019

"...very problem is a little different and applying generalised solutions - especially by rote - is not a good idea......a great problem solver is usually open to new ideas, innately curious and good at working with others......one of the reasons my friends and I were successful early on was because we always asked a lot of questions.....I was willing to listen to anyone who could help, and over the years many people volunteered their advice..."
Richard Branson as quoted by Australasian Interim Executive Association 2019.

. The elements in an optimum decision-making process are

- realizing that the problem is genetic and can only be solved by establishing a rule/principle

- providing clear definitions of the specifications that answer the problem satisfactorily

- concentrating on what is right before considering compromises, adaptations, concessions, etc to make the decision acceptable

- building into the decision the actions needed to carry it out

- monitoring and evaluating, ie feedback, ascertaining the validity and effectiveness of the decision against the outcomes

- encouraging of disagreement and dissension rather than consensus, ie consider alternatives

. Some questions that need to be asked to determine if the problem is generic or unique:

- Is the situation generic or an exception?

- Is this something that underlies a great many occurrences?

- Is the occurrence a unique event that needs to be dealt with as such?

- Is this a true exception or only the first manifestation of a new generic problem?

Sometimes the occurrence may only be a symptom, ie the manifestation of underlying basic conditions and not the basic cause. Have to be careful that this is not the equivalent of putting "band-aids" on a boil when the boil needs to the lanced!!!!!

Remember: the generic can be answered through a rule/principle, while the exception can only be handled on an as-it-occurs basis. Furthermore, truly unique events are rare and must be treated individually, ie case-by-case.

One of the most common mistakes in decision-making is to treat a generic situation as if it was part of a series of unique events

Generally, all events, except the truly unique, look for a generic solution, ie a rule, a policy, a principle. Once the right principle has been developed, it can be adapted to each situation.

. Some questions that need to be asked to determine the clear definitions of the specifications that answer the problem satisfactorily

- What are the objectives the decision has to reach?

- What are the minimum goals it has to attain?

- What are the conditions it has to satisfy? These are sometimes called the boundary conditions

- What is the minimum required to solve this problem?

- Can our needs be satisfied?

The more concise and clear the goals and conditions, the more effective the decision.

If the specifications are incompatible, the decision will have less chance of being effective.

Defining the specifications and setting the boundary conditions involves more than facts. It is done on interpretation and intuition. Thus it is a risk-taking judgment

. What is right

- need to start out with what is right rather than what is acceptable (let alone who is right) as one will always have to compromise in the end.

- furthermore, you need to know what is required to satisfy the specifications and the conditions. Unless this is done, it is hard to distinguish between the right compromise and a wrong one

- there are 2 types of compromises, ie

"...half of a loaf is better than no bread..."


"...half of a baby is worse than no baby at all..."

Peter Drucker, 2001

The purpose of bread is to provide food and half of the loaf is still food, while half a baby is not a living and growing child; it is one piece of a corpse!!!!!

Furthermore, it is a waste of time to worry about what is acceptable and trying to reduce resistance. Generally, the obstacles that are first thought to be insurmountable are not and others not considered can become insurmountable obstacles

. Converting into action requires answering several distinct questions

- who has to know of this decision?

- what action has to be taken?

- who is to take it?

- what action is required so that people who have to take it can do it?

- who are accountable and responsible for implementing the decision?

. Feedback

- need to test whether the assumptions on which a decision has been made are still valid or whether they are becoming obsolete and need to be thought through again. Time and reality never stand still.

- it is important to build the feedback around direct exposure to reality, ie need to visit the "scene of the action".

. Disagreement

"...Unless one has considered alternatives, one has a closed mind......decisions......are made well if based on the clash of conflicting views, the dialogue between differing points of view, the choice between different judgments. The first rule in decision-making is that one does not make a decision unless there is disagreement..."

Peter Drucker, 2001

- there are 3 reasons for the importance of disagreement

i) it is a safeguard against the decision-makers becoming prisoners of the organisation. The only way to break out of the prison of special pleading and pre-conceived notions is to make sure of argued, documented, thought-through disagreements and dialogues

ii) disagreements provide alternatives from which to choose. Encouraging disagreement reduces the chances of the decision being wrong.

iii) disagreements stimulate imagination. This is important to handle the uncertainty of the future

- alternatives provide a choice, especially if the decision proves deficient or wrong in execution

"...disagreement converts the plausible into right and the right into the good decision..."

Peter Drucker, 2001

- decision-makers need to start out with the commitment to find out and understand why people disagree

- one alternative is to do nothing. What will happen if we do nothing? Will the problem take care of itself? In other words, is the decision really necessary? Despite individual decision-makers differing in style, ie risk-averse, risk-takers, etc, there are some common rules in this situation, ie

"...act if only on balance the benefit greatly outweighs cost and risk. Act or do not act, but do not hedge or compromise..."

Peter Drucker, 2001

. If people demand another study, these 2 questions need to be asked: is there any reason to believe that additional study will prove anything new? Is there reason to believe that the new is likely to be relevant?

. Furthermore, in decision-making, intuition is important as this is based on your experience!!!!

"...we make decisions based on who and where we are, and what the norms around suggest are the right and wrong ways of acting..."
Elisabeth Anderson as quoted by Yancey Strickler 2019

. In decision-making, rapid instinctive decision-making is not traditionally accepted as the best way to make decisions, ie

"...our present business culture believes quick decisions are bad decisions, and that the way to run a big company is to amass data, run the models, do the due diligence and knockout as many imponderables as possible. Instead we need to reaffirm the value of rapid judgments and recognize those styles of decision-making - one based on massing of overt, consciously gathered information and the other based on experience and unconscious thinking - are appropriate at different times..."

Malcolm Gladwell as quoted by Helen Trinca, 2007a

Feeling (emotions) in Decision-making

Feelings are an important part of decision-making, ie

"...Emotions constitute potent, persuasive detectable drivers of decision-making..."
Rebecca Newton, 2019

Other research has shown that being in tune with your feelings is linked to improved performance, eg the more intense the feelings and the better control of possible biases induced by the feelings, the higher the decision-making performance.

Emotions can influence the way you think and behave

On the other hand, Western thought plays down the role of emotions in reasoning and decision-making.

Feelings are linked with emotions and moods (see diagram below)


(Source: Lyn Traill, 2021)

According to Gladwell, there are several aspects to this quick decision making

- need to be an expert with unconscious knowledge, ie possess "at-a-glance" skills

- thinking is mysterious as people are unable to define the steps in their decision-making

- it is a fragile exercise with many factors able to cloud judgment, eg a conscious bias does not necessarily know where a first impression comes from or precisely what it means

- it is frugal, ie more data does not necessarily mean a better decision will be made. In fact,

"...too much information can undermine the judgments. People who are limited to a few key variables have a better capacity to see the truth..."

Malcolm Gladwell as quoted in Helen Trinca, 2007a

An interesting quote on decision-making

"...I'm a firm believer if a pending decision keeps you awake at night, it is the right decision because that means you think about it and you think about all eventualities..."
Patrick Boutellier as quoted by Bani McSpedden, 2021a


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