How good are you in making decisions? Part 1 – The Process

Imagine someone approaches you at a party and asks what you do for a living. You proudly answer that you are a “(level of seniority) Manager at (name of industry/ company)”. But then you’re asked: “Yeah, but what do you DO there?” How would you describe your job in one sentence to someone who has never managed people or projects?

I think that regardless of the industry, there would be one simple way of describing what Managers DO. They make decisions. It could be something as common as the decision to hire a new employee, and as risky as installing a new operating system (or completely changing the production process), but it is the sole priority and the burden of the Manager to make the decision and to see it through. So how good are you at making decisions?

To answer this question, we need to know how to measure the quality of our decision-making. Counter-intuitively, decision-making could be measured not only by the results of our decisions, but also by the stability of our Decision-Making Process. Certainly, you can arrive to some good decision randomly, but having set a correct decision-making process means that your decisions will be systematically correct!

This process is best described as sequentially going through four phases: Recollection, Mapping, Reasoning and Justifying. Regardless of the scope of decision, when deciding to answer a phone call or not or contemplating a team reorganization, you are going (mostly unconsciously) through these four stages. Let’s take a better look at those phases, while pointing at the possible challenges for each one and the tools to deal with them.

Recollection – once we need to make a decision, the fastest solution our mind turns to is trying to scan for any previous experience with similar circumstances. If the experience was positive, previous solutions could be adopted, if not – we know what to abstain from. The problem is that our memory can play a lot of tricks on us: it can store the emotional rather than practical value of experience, it can give us a “politically correct” version of events rather than what really happened, and it can turn us towards someone else’s knowledge and solutions regardless of their applicability to our context.

Best served by:

Basing your primary input on what really happened and the real consequences instead of what your mind offers as immediate path of action; distinguishing between objective and “virtual” experience; validating information and its sources; scanning the information field for additional factors. You should also read about memory biases List of memory biases and The Ultimate guide to memory (this one will require to register your name, but it’s worth the hassle).

Mapping – at this stage we elaborately search for possible alternatives and scan the surroundings for any additional relevant input into our equation, such as overall parameters or functionalities of the system, environmental factors, counterparts, available resources, and, last but not least – our goals. The main challenge here – it’s easy to get lost in the vast variety of options.

Best served by:

Hiring experts; calling friends; meeting with other possible information sources. There are also many technical tools for this stage to choose from, such as: Mind Mapping , Brainstorming , Force field analysis , Story boards (Agile), Sequence of Events (Demand Flow Technology, PERT (critical path analysis and activities chart), Mikado (mapping all prerequisites for the solution), Affinity diagrams , Gantt charts , SWOT (Strengths, Weaknesses, Opportunities, Threats), Six Sigma , Value Stream Mapping , additional Operational Mapping . Here is a comprehensive list of mind mapping software you can use.

Reasoning – a tricky stage when in addition to possible scenarios it is imperative to evaluate the risks and the probabilities of different events. Here we usually try to predict the outcomes of future events, but we can also look at historical data on previous events to unveil the root causes of current situation. Dealing with uncertainty is always a bummer, but there are ways to decrease it. It could also be very tempting to combine the Mapping and the Reasoning stages, but trying to generate solutions simultaneously with evaluation of their likelihood will shoot down great ideas before they reach a maturity.

Best served by:

Tools based simulations such as Monte Carlo , Analytica , D-sight ; Diagrams, cause and effect analysis (Fishbone , Pareto , Decision Tree, “5 whys” ); Quantitative methods (Risk analysis, Data mining , Business analytics with SAS ); holistic approaches (Business Process Management tools from IBM or Oracle world, Business case scenarios building with Return on Investment analysis), Hiring experts.

Justifying – the Achilles heel of the process. Once the best alternative is marked we need “to go public”, to announce our decision to the world in order to act. Regardless of how witty the decision is, our mind is always preoccupied with how it will be perceived by others. Therefore many times possible choices are precluded only because we don’t see how to “sell” them or how to enforce our decision. On the other hand, not thinking at all on how to promote the decision, solemnly believing it is so obviously good that everyone will see it in an instance, is also a malfunction.

Best served by:

Acknowledging that “selling” the decision and its rationale are two completely separate components. You should consider possible difficulties in promoting the decision as a factor, but do not shoot it down from the beginning based solely on this factor. It is always advisable to know your stakeholders for the decision at hand, while trying to understand their perspective and how the decision will affect them, and presenting it with emphasis on what they will gain by adopting it.

These are the four universal phases of decision-making process. Get them right without skipping anyone, and you’ll be amazed by the results. Or, at least, the others would be as long as you haven’t forgotten the last phase :-).