On the surface, there are four easy steps to making any decision: 1. State your goal 2. Identify your alternatives 3. Rate each alternative against the goal 4. Select the alternative that best meets the goal. Which of these steps is most difficult for the decisions you've struggled with? What is it that makes the step so difficult?
Carol, in the context of business decisions, most decisions are related in some way to creating and retaining customers more efficiently and effectively. I work with companies that have an ambition to innovate and deliver compelling customer experiences. In my world, #2, identifying alternative ways to deliver these experiences is the most difficult. Decision makers are sometimes bounded in their identification of alternatives. Speaking in the most general terms, the reasons relate to company leaders' over-reliance on their past industry experiences (rather than an understanding of their companies' current customer experiences), insufficient customer research, insufficient intra-company sharing or use of customer insights. Cultural barriers, lack of skills and other factors could contribute to these challenges. --Jason Sherman
Jason, I've seen this a lot. Often companies will spend much more time on comparing the alternatives than they will on coming up with them. I think the problem is that there are two types of thinking involved in decisions--divergent and convergent. Divergent thinking requires an open mind and imagination and is good for coming up with possible alternatives. Convergent thinking is critical and analytical and is good for selecting from possible alternatives. People are usually better in one type of thinking than the other, and so tend to favor one. Business people tend to be more comfortable with convergent thinking, and so select alternatives quickly and narrowly.
In answer to your question, the toughest part of making a decision is the actual making of the decision (sounds a bit ZEN!). Indecision comes from never having perfect facts and data to make a decision. This causes procrastination and putting off decision making-sometimes indefinitely.
For example, if you knew 100% (perfect information) that Apple computer stock would double in value within three months, then: How much would you buy? Would you purchase $500 of stock, $5,000 worth? Would you mortgage your house to make a fortune?
The same is true of any decision. We will never have perfect information.
Since we never have "perfect information" what can we do? The correct answer is to take the logical steps to decision making, and then take a chance! Let's explore further.
The Decision Making Process
Once you know that a decision has to be made (state your goal), the following process can be used.
Step 1: Gather the facts and data Step 2: Make your assumptions Step 3: Identify your Options (alternatives) Step 4: Use logic and common sense Step 5: Incorporate your feelings Step 6: Make your decision Step 7: Modify or change your decision if needed
Steps 1 thru 3, 5 and 7 are relatively straight forward. Let's explore Step 4 and Step 6 in more depth.
Step 4: Use logic and common sense
Combine your logic and common sense with the facts and data, assumptions, knowledge and experience. Ask yourself questions like:
* Does this decision make sense? * If so, why? * If not, why not?
Address any risks. Ask questions like:
* Are there any risks involved? * If so, what are they? * What can be done to minimize or eliminate these risks?
The amount of time and energy invested in making a decision should be in proportion to the importance of the decision. For example, the time and energy invested in buying a house should be proportionately larger than the amount of time and energy invested in selecting an appliance-or even a car.
Step 6: Make your decision
Two primary types of decisions are:
1. A yes or no decision. For example, should you buy or continue to rent. Another example is: Should you change your career? 2. Selecting from options available. Which options should be selected?
Once you have gathered the facts and data, made good assumptions, used logic and common sense, and incorporated your feelings you are ready to make a decision.
However, before the decision can be made, uncertainty needs to be recognized and addressed.
Most decisions won't be perfect. The facts and data gathered may be lacking, or in conflict. Feelings may waver on a decision. There will be uncertainty to deal with.
Many people are conditioned from an early age to believe that being wrong is bad. This conditioning can hold them back from making decisions when uncertainty is involved-and it is almost always involved. The more complex the decision, the more doubt will be encountered.
Because of the uncertainty encountered, it is natural to be reluctant to make a decision. Here are two reasons to make a decision after you have completed all of the appropriate steps even if aspects of the project, objective or problem are ambiguous. They are:
1. If you don't make a decision, (in many cases) it will be made for you. Being a good critical thinker means taking the responsibility and the initiative to make one's own decisions.
2. Most decisions can be changed or modified-if not immediately, in time.
Frequently, new facts and data become available after you have made a decision. Sometimes this information is relatively insignificant. Other times it is important.
If the new information would have changed your mind if received earlier, then you have two possibilities:
1. Modify or change your decision (if possible).
2. If your decision is difficult (or impossible) to change then determine a way to handle it. Change it in the future if possible. The application of almost all decisions can be changed in time.
You refer to Step 5 'incorporate your feelings' as being fairly straightforward. Nothing could be further from the truth. Recent research from the world of Neuroscience, using fMRI scans, has shown that all decisions are made by the older, more primitive parts of the brain; notably the Amygdala, acting at the very least as the final gatekeeper for our decisions. Feelings and emotions, not rational thinking, are the real drivers of decision making, influenced heavily by the facts that can be ascertained but not dominated by them. In the words of Antonio Damasio (Professor of Neuroscience at USC and author of 'Descartes Error'); "We are not thinking machines, we are feeling machines that think." Putting this constructively: first, try and find out why you feel intuitively good about one thing and not the other - then apply your 7 step model and review and adjust your decision against your initial feelings at each step. What do you think?
Chuck, This is an interesting approach to making a decision with limited information (and that includes just about any decision!). I like your emphasis on risk and changing the decision if it doesn't work out.
The real challenge at that point is to take a broad look at all the potential outcomes (e.g., that old standby, the worst thing that could happen). If you do that, you can plan contingencies as part of the decision-making process, rather than waiting.
The problem is that people tend to think too narrowly about the possibilities. They don't consider "black swans," very unlikely events that can have profound effects. Also, the range of outcomes they consider is far too narrow. I do an exercise in my classes in which I ask the students to guess several quantities that they do not know, such as the number of camels in the world, and then minimum and maximum numbers that they feel 90% certain will bound the true answer. They do very poorly on this, with most of the true answers falling well outside of their minimum or maximum. This has been replicated in large studies. This shows that people underestimate their lack of knowledge, even for something they will admit they do not know. I think this gets back to your point about people being conditioned to believe being wrong is bad. They cannot or will not confront their lack of knowledge.
So you need to make a conscious effort to think broadly about the possibilities when doing the risk part of a decision.
You mention people's reluctance to make a decision under uncertainty. Here's another reason for that. As you say, people are afraid to be wrong, and so they're afraid of making a decision and then being proven wrong by a bad consequence. Even the best decisions often have bad consequences due simply to bad luck or events that could not have been foreseen. People know that there are always unknowns and events that they cannot control, that can come back and bite them and make their decisions appear wrong. So they avoid making decisions. To be decisive you need to assume the mind set that good decisions sometimes have bad consequences, but they are still good decisions, the best given the information that was available at the time.
Good points. Even the most analytical decision techniques need intuition to make them work--balancing conflicting goals, visualizing possible outcomes, coming up with alternatives, considering the intangibles.
Surprisingly, sometimes the analytical can help the intuition. Often I am stymied by a choice and my intuition is stuck bouncing around among the alternatives. Then I go through some rational decision process to choose one alternative. I pay attention to my feelings during the process. Am I rooting for one alternative to win? Was I pleased or disappointed at the answer? This technique often helps me dredge up feelings that were not evident at the outset.
Hi All, this is a very intriguing subject, especially as the response chains mentions Black Swans (Nicholas Taleb) and Antonio Damasio. I would suggest another authorto read, Gerd Gigerenzer who is very much into understanding human decision making. I am developing process management software that supports human decision making and therefore I research into this deeply. My take on the subject (based on Gigerenzer, Damasio and others) is that we are emotion driven in everything we do. There are automated processes such as movement and speech and there are abstract processes that deal with memorized and classified entities we 'understand' and can relate to. We model the world around us. ALl decision making is intuitive emotional. I can give you a list of people who do breain research with fMRI scanners and they propose that the actual action starts before we consciously 'make' the decision. We later say we did, but we decide faster than we can rationally think about it. Why, because it is extremely effective. As mention here before most decisions work well or even better on limited information rather than long rationalizing. We just have the illusion that we are rational. We never take a rational decision, we just like to think we do. We think later about the decision we took and rationalize it. Now that does not belittle us as people or reasonable beings. Emotion is not bad, it is actually good. It is the rational decisions (particularly in business and politics) that are bad for us because they are usually wrong. There is a lot more on this and I am vey interested to discuss the subject. I do so on my blogs: http://maxjpucher.wordpress.com
Your concept of divergent and convergent thinking is helpful. I find it a bit ironic in the school world where I work that while we ask our students to be creative and flexible, we are reluctant to devote time to more creative decision-making activities such as brainstorming alternatives. Time seems to be an issue. Any suggestions on how to help a team see the value of time spent on the less analytical processes of decision making?
Carol, By some decision making or planning models, you skipped a step or two.
In stating your goal, have you critically assessed the problem? Without understanding the problem, the goal could aggrevate the underlying issue.
Before considering alternatives, assess the resources available to you. The best solution in the world is frustrating and useless if you lack a critical resource to impliment the alternative you think is best.
These could both be rolled up under C. Clayton's step 1 Gather the facts and data, but this is a little more resolution on a step that was dealt with casually.
I think you're on the right track regarding the relationship between rigorous decision making processes and intuitive decision making. They compliment each other. Rigorous, disciplined thinking provides the attention to detail, and intuition provides creativity. And some rigorous processes include a phase for tossing out ideas (your divergent thinking), assessing them, and refining the good ones. And in the final step of (at least) one model is wargaming, where you walk through the proposed decision and assess the impact of the world on your decision and the decision on the world.
Some thoughts. Becoming good at making real decisions is more than having a good model. Other than theoretical considerations, a model of decision-making is mostly helpful for figuring out what you are missing when your decisions aren't working out well in practice. For example, if you tend to spend a lot of time chasing impractical alternatives that others later think were obviously a waste of time, then you know you need to learn to make better estimates of the time and resources that a particular option will involve. This is relevant both to estimating the effort before implementing an option and even estimating the resources needed to research alternatives in order to choose between them. In complex decisions you have to combine analysis and research with judgments of what directions are worthwhile to pursue. This requires experience and learned skills. Decision-makers depend more on these skills than on formal models, especially as they become more expert. Intuition isn't just something you learn to listen to, it is also something you learn to develop. It is not an alternative to reasoned decisions, it is a matter of identifiable skills that apply to the decision making process. That's the concept of "naturalistic decision making." For example, see: The Power of Intuition: How to Use Your Gut Feelings to Make Better Decisions at Work