I was recently sent an article on decision-making and felt compelled to share it. Here at Knudson, because we are such a small firm, each employee is expected to wear many hats and perform a variety of duties on any given day. When that variety is multiplied over a week, a month, or a year, the number of decisions that a single employee is required to make in a given time period can seem overwhelming and has the potential to be downright exhausting. But it doesn’t have to be.
In his article, “Decidely Better Choices,” in Financial Times, Philip Delves Broughton offers some pretty incredible insight as to how we make decisions and tips on how we can pare down the number of decisions we are expected to make. He talks about setting up “good choice architecture” to ensure that our decisions are not affected by our subconscious biases towards our favored outcomes and avoidance of conflict. Part of the strategy is surrounding yourself with people that you can trust to have dialogue with regarding important decisions. Another part of the strategy is consciously challenging the bases of decisions and the biases of decision makers. But perhaps the tip that impacted me the most was:
Don’t exhaust yourself with small choices. Save your decision-making energy for what matters.
How could our lives as Project Managers become easier if we were to incorporate this simple maxim into our lives? We have support staff that are competent and capable of handling all but the pivotal decisions; we need to value that! This simple piece of advice has the potential to change the way we operate. It is akin to the tips in bulletins we receive about ways to conserve energy at home. Every little way to conserve personal energy is a step towards greater efficiency and balance. I am in full support of those things. Below is the full text article for those of you who are not subscribers. I highly recommend the read. –T. Koenig
“Decidedly Better Choices”
By Philip Delves Broughton
Of all the definitions of what it means to be US president, few have come closer to the truth than George W. Bush’s description of the head of state as “the decider”. It captures the loneliness of the job and its greatest challenge: making decisions of great importance with imperfect information. It is as true for presidents as itis for chief executives.
But it is not just the substance of the decisions that matters but also the process and style in which decisions are reached – you could make the right decision through luck and never know how to repeat your success; or you could upset everyone in making it.
New theories around process and the biological factors that affect how we decide are constantly emerging to challenge our worst decision-making habits. Steve Jobs was able to make decisions and reconcile warring executives in a unique way. Tim Cook, his successor at Apple, is still forging and proving his own style. So, when Scott Forstall was fired last month from his job running mobile software, he was reported to have been complaining that Apple lacked a “decider”. (It may, of course, be that he missed Mr Jobs’ support.)
The field of decision-making has been dominated in recent years by discussions of the balance between intuition and reflection, and the challenge of overcoming our seemingly irrational biases. Cass Sunstein and Richard Thaler of the University of Chicago introduced the idea of “nudging” people to make better decisions by adapting “choice architecture”, the context in which we choose.
Good choice architecture can help overcome our tendency to make poor decisions because we procrastinate, avoid complexity or simply turn away from high-stakes decisions and hope they will resolve themselves. We know we should invest more in retirement plans, for example, but many of us avoid doing so because they are hard to understand. Companies that allow monthly withdrawals from employees’ pay get around this by making saving more effortless.
Even more influential has been the work of the Nobel Prize-winning psychologist Daniel Kahneman. His experiments have demonstrated the effects our cognitive biases have on decision-making. Our aversion to losses makes us too cautious. Our tendency to anchor choices on certain assumptions makes us give too much weight to information that might be irrelevant. Our fear of contradiction makes us seek out information that confirms what we already think.
In Thinking Fast and Slow, Prof Kahneman recommends that managers create a form of quality-control system around important decisions to avoid the negative effects of such biases, as well as the self-interest and political considerations of everyone involved. The goal is to base decisions on sound information and credible scenarios and options, and to liberate decision makers from wrong-headed bias, mistaken analogies and emotional or political attachments. Since human judgment is so badly flawed, senior managers must find ways to limit its worst consequences.
How to improve your decision-making:
- The ability to make good decisions fluctuates throughout the day. Don’t exhaust yourself with small choices. Save your decision-making energy for what matters.
- Good process leads to good decisions. Consciously work to challenge the bases of decisions and the biases and prejudices of decision makers.
- Make decision-making a constant and flexible process. Keep a running list of several options for important decisions, discussing them with fellow managers and updating them with new discoveries. This lessens the drama of big decisions and allows for more course corrections en route.
- Seek ways to distance yourself from the emotion of decision-making. Going over the decision in a second language might sound a strange approach, but it has been shown to lead to more rational decisions.
In a recent profile in Vanity Fair magazine, US President Barack Obama told the journalist Michael Lewis that he had been influenced by research showing that the ability to make good decisions was like physical energy: it needed to be conserved during the course of each day. “You need to focus your decision-making energy,” he said. “You need to routinize yourself. You can’t be going through the day distracted by trivia.” Consequently, he had consciously sought to remove decisions from his life. He wears only grey and blue suits. He alternates his morning workouts between cardio and weights. “I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.”
Mr Obama was referring to the idea of decision fatigue. In their 2011 book Willpower: The Greatest Human Strength, the social psychologist Roy Baumeister and the science writer John Tierney describe a series of experiments that have shown how our willpower and willingness to make trade-offs, the essence of making decisions, are depleted through overuse.
Good decision-making is not a permanent trait, but the result of a fluctuating state of mind. A spike in glucose, for example, provides energy to compare choices and not resort to default answers.
Prof Baumeister and Mr Tierney describe a study of the parole board at an Israeli prison, which showed that even allowing for differences in cases, prisoners appearing first thing in the morning received parole 70 per cent of the time, while those appearing late in the afternoon received parole less than 10 per cent of the time. “The mental work of ruling on case after case, whatever the individual merits, wore them down,” they write.
In his new book The Finish, about the killing of Osama bin Laden, Mark Bowden reveals how influential the method of probabilistic risk assessment – assessing risk by assigning probabilities to various outcomes – has become at the highest levels of the US government.
After intelligence agencies mistakenly assumed that former Iraqi dictator Saddam Hussein was hiding weapons of mass destruction, the CIA had required that analysts not only assess and opine but also put a confidence level on their opinions: high, medium or low. When the CIA thought it might have found bin Laden in a house in Abbottabad, Pakistan, discussions among the security agencies, the military and the White House went back and forth using confidence levels and probabilities to assess whether it was really him.
Eventually, however, Mr Obama had to cut in. He told Mr Bowden: “What you started getting was probabilities that disguised uncertainty as opposed to actually providing you with more useful information.” What he needed was options in the event that he decided to act.
This approach is similar to the kind of options-based decision-making described by A.G. Lafley, the former chief executive of Procter & Gamble, and Roger Martin, dean of the Rotman School of Management, in their forthcoming book Playing to Win. Drawing on work by Harvard Business School’s Jan Rivkin, they describe ways to develop new strategies in business environments where information is constantly changing, and the context is resistant to change. By keeping many options open and reviewing them regularly, organisations become more flexible than if they are always waiting for one monumental decision and its consequences to unfold.
A more unusual discovery about decision-making was made this year by a group of psychologists at the University of Chicago. They found that when people discuss their decisions in a non-native language, irrational biases are reduced. Speaking in a foreign tongue creates a distance between the speaker and their own ideas, helping them be more rational. So companies in which members of the management team communicate mostly in a second language may have an advantage.
The next time Mr Cook’s executive team draw their daggers, forcing them all to speak French may avoid more bloodletting.