Category Archives: Decision Making

It’s Probably Not Important

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“How do you know what-you-need to know?” I asked. “You lost the contract, because you understood the problem, had a great solution, but did not know how the decision was to be made. How do you know what-you-need-to-know?”

Jordan thought for a minute. “I guess, the first step is assuming we already know everything we need-to-know. It’s easy to get suckered into thinking that what-we-know matches the reality of the situation. We have to get really clear on what-we-know and what-we-don’t-know.”

“And, what do we assume about what-we-don’t-know?” I pressed.

“We assume what-we-don’t-know is probably not important, that if it was important, we would already know about it, and included it as part of our understanding. That was our first mistake.”

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Hiring Talent – 2020 was released on Mon, Jan 13, 2020. Limited to 20, participants must be part of the hiring process, as either hiring manager, part of the hiring team, human resources or manager-once-removed. Program details are here – Hiring Talent – 2020. If you would like to register please complete the form on the Hiring Talent link. The first 20 respondents will receive a discount code for a $99 credit toward the program.

What You Need to Know

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“Unbelievable,” Jordan shook his head. “We thought we had it nailed. We knew what the problem was, had a great solution. We were so confident this project was ours for the taking.”

“And?” I asked.

“What we didn’t know was our competitor had a relationship with their corporate attorney, who whispered in the ear of the CFO, who controlled the budget for the project.”

“So, what did you learn?”

“Sometimes, what we know about the problem and the solution to the problem isn’t what we need to know about how the decision will be made.”

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Hiring Talent – 2020 was released on Mon, Jan 13, 2020. Limited to 20, participants must be part of the hiring process, as either hiring manager, part of the hiring team, human resources or manager-once-removed. Program details are here – Hiring Talent – 2020. If you would like to register please complete the form on the Hiring Talent link. The first 20 respondents will receive a discount code for a $99 credit toward the program.

Do I Have the Authority?

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“But, I am the manager, shouldn’t I have the authority to make some decisions around here?” Amber asked.

“Ah, yes. Authority,” I replied. “You must understand, however, that authority comes with accountability. Neither comes first. You cannot have the authority to make a decision without the accountability for the outcome of that decision. Conversely, you cannot be held to account for the outcome unless you have the authority to make the decision.”

“So, just exactly what decisions do I have the authority to make around here?” Amber pressed on.

“To know that, you have to examine your goals and objectives.” Amber had an unspoken question on her face. I continued, “Your goals and objectives, agreed upon by you and your manager, set the context for your accountability (output) and the authority you have to make decisions to reach those goals.

“In the beginning, that authority may be unclear. That is why you meet with your manager more frequently, to clarify the context, define the accountability and determine your authority. As time goes by, your confidence will increase and so will your understanding of the discretion you have to make appropriate decisions.

“The most important understanding, where you have authority to make decisions regarding the output of your team, you also have accountability for that outcome. Do not think you can have the authority without the accountability.”

Any Decision, Any Problem

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Think about any decision. You have to think about, not only the consequences of that decision immediately, but also the consequences in a month, three months or a year. An immediate positive consequence may create the circumstance for a negative consequence in three months time.

Same thing goes for a problem to be solved. You have to think about, not only the consequences of that solution in the near term, but the consequences in a month, three months or a year. An immediate solution may create the circumstances for a larger problem in three months time.

Take a high mileage vehicle and extend its preventive maintenance cycle by 30 days. You will save the cost of a maintenance cycle. In three months time, you will not likely notice any difference, but over two years time, you may experience catastrophic vehicle failure. And, it may not just be the cost of the repair, but the delay in the critical path of a project (just to save an oil change).

A World That No Longer Exists

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Best Practices are based on past experience, a best practice to a problem that we already solved. Necessary but not sufficient.

Past experience may be helpful, but seldom covers all the bases. Past experience seldom anticipates change and often misses critical elements that will be different in the future.

Best Practices are what we teach in school. Those who live by Best Practices will find themselves perfectly equipped to deal with a world that no longer exists. Accomplishment always happens in the future.

Paper, Scissors, Rock

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“So, just exactly how far out to lunch were you, when you made that decision?” I asked.

Clarence laughed. It was the first bit of levity around a decision that cost his company $125,000. “I know, I know,” he replied. “It was a pretty bone-headed decision.”

“Seriously, what did you miss?”

“I was so focused on the increased productivity we forecast when this new machine came online, that I forgot to ask some basic questions.”

“Like?”

“I assumed the concrete floor would support the weight of the replacement machine. There were plenty of signs to tell me otherwise, but I didn’t pay attention to the floor because I paid attention to productivity.”

“Details?”

“You’re making this painful. When we pulled the old machine out, there were stress cracks in the concrete underneath. I thought, after 20 years, they were just cosmetic. But, there wasn’t enough steel reinforcement in the pad to hold the weight of the new machine.”

“What did you learn?”

“Before you make a decision, you have to lay out – what is an assumption and what is a fact. I was playing paper, scissors, rock with concrete and steel.”

Computers Do Not Make Decisions

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Decisions are made on a continuum from fact-based to gut-response.

The advantage to fact-based is, the alternatives are well-considered, analytical, defensible. The disadvantage is the decision may be made too late.

The advantage to gut-response is speed, intuition, it feels right. The disadvantage is the decision may be wrong.

The best decisions are made in the middle. The more data you have, the more likely your intuition is to be accurate.

Decisions are always made with incomplete data. There is always uncertainty. If there were no uncertainty, it would not be a decision, it would be a calculation. Computers do not make decisions, they run algorithms, calculations. In the face of ambiguity, it is only people who can make decisions.

So, why all the fuss about artificial intelligence?

For some decisions, computers can gather enough data, quickly enough, to make a calculation, run an algorithm, to remove uncertainty, while a human is still gathering data, faced with ambiguity. That is why, in some circumstances, a computer can make a faster, more accurate diagnosis than a human.

What Else Do You Need to Know?

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Before you make any decision, before you solve any problem –

  • What do you need to know, to more clearly understand the problem?
  • Does what you know point to the symptom of the problem, or point to the cause the problem?
  • If you gave the cause of the problem a name, what would be its name?
  • What else do you need to know, to more clearly understand the cause of this problem you named?
  • Do you know enough about the cause of the problem to generate a plausible solution, or do you need to know more?
  • How would you explain the cause of the problem to someone else?
  • If you were someone else, how would you understand the cause of the problem differently?
  • If you were someone else, what other alternatives would you suggest?
  • As you consider these alternatives, could some be combined? Could you take the front end of one idea and patch it to the back end of another?
  • What would happen if you ran an alternative backward or upside-down?

Sometimes, solving a problem has more to do with questions than answers.

In the Gap

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Humans possess the unique quality of awareness. Not only can we hold a thought, but we can simultaneously be aware we are holding that thought. Awareness allows us to change.

The first level of Emotional Intelligence (EI) is awareness. Self-awareness creates the platform for self-management.

The second level of Emotional Intelligence is social awareness. Social awareness creates the platform for relationship management.

For difficulties in either level, ask yourself – What am I not aware of?

This requires you to be quiet and observe – What am I not clearly seeing, clearly hearing, clearly feeling?

This requires defined periods of focused introspection – What is the cause of my response to the events around me? What is the influence to my behavior?

Awareness is that gap between stimulus and response, between what is coming at us and how we respond to it. In that gap is our choice. In that gap is awareness.

We have the unique ability to be aware. Awareness can have a powerful impact on the problems we solve and the decisions we make.

What to Mitigate, What to Prevent?

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Four ways to look at risk.

  • Risk with low probability and minimal damage
  • Risk with high probability and minimal damage
  • Risk with low probability and catastrophic damage
  • Risk with high probability and catastrophic damage

Risk with low probability and minimal damage can be self-insured, meaning I am willing to accept the risk and endure the consequences.

Risk with high probability and minimal damage will depend on my threshold and tolerance for pain. Even a splinter in a finger can be annoying.

Risk with low probability and catastrophic damage creates mitigation behavior. I may be willing to accept the risk, but in the event the risk occurs, I want to mitigate the damage. I may seek outside protection, an insurance product. Insurance rates depend on low probability to calculate the premium.

Risk with high probability and catastrophic damage creates prevention behavior. To protect my best prevention behavior that inevitably fails, I may seek outside protection, an insurance policy. Insurance rates consider the high probability to calculate the premium and often, actively participate in the prevention behavior.

What risks come with your business model? How do you manage that risk?