Every moment of every day, a person takes action. Some of these actions are involuntary in that the person does not have to contemplate their taking place, such as: breathing, the heart beating, digestive process, etc… And some of these actions are voluntary in that the person is consciously involved in taking the action, such as: eating, walking, writing an article, etc…
Arguably, the single voluntary action that a person engages in most is the action of making a decision.
“When you come to a fork in the road, take it.” – Yogi Berra
From the moment we wake-up, it’s; Am I going to go to the bathroom to freshen-up first or let the dog out? Am I going to have a cup of coffee first or get the newspaper? Am I going to check eMail or Facebook or am I going to take a shower?
… To the moment we go to bed; Am I going to watch NCIS or finish writing that article that’s due? Do I spend some extra time with the kids, the dog, or the spouse? Is it too warm for pajamas or not?
And countless decisions in between.
Every decision we make is based upon an analysis of the risk versus the reward. And most of the decisions we make on a daily basis have little or no risk, so the emphasis is placed on the reward. Oftentimes, the decision is between a selection of multiple rewards – and we prioritize our decision based on which will deliver the greatest reward.
We don’t spend a lot of time collecting and analyzing data to make these decisions. We have years of experience and have become “experts” in these areas – with the results being that our degree of confidence is very high. So why do we obsess so much over data at work? After all, we are experienced experts, aren’t we?
“Making good decisions is a crucial skill at every level.” ― Peter Drucker
It’s worthy of noting that when Peter Drucker said this, he did not specify how good decisions are made, or offer a framework for what constitutes a good decision. He merely stated the obvious, that good decision making is crucial, and that it’s a skill that is necessary throughout the organization.
In a community (whether family, or business, or other collections of people tied together by some unifying characteristics), it is not enough to know you are the expert – you have to convince others that you are an expert and that your decision is a wise decision. This is usually accomplished by building a case for the decision and being able to articulate that case so that others accept it as wise.
So it’s worthwhile to start by exploring the psychological profiles and methodologies associated with decision-making and the decision-making process.
According to Wikipedia; “The Myers-Briggs Type Indicator (MBTI) assessment is a psychometric questionnaire designed to measure psychological preferences in how people perceive the world and make decisions.” The process involves the subject completing an interview which will predict the thought-process of the individual as they are faced with challenges. There is much more to it than this, but the basic determination is whether a person “feels” through a solution versus one who “analyzes data” to determine a solution.
In addition to a psychological profile for an individual, there are (at least) four decision-making methodologies – or frameworks – of note (of more than 40 Decision-Making Techniques explained in more detail at Mind-Tools):
- The Vroom-Yetton-Jago Decision Model is designed for a more “autocratic” approach to decision-making. There are certain characteristics necessary for this approach to work including (most importantly) that those effected by the decision are inclined (required) to follow the leader who makes the decision. The process itself (as can be seen here) is quite involved and complex, as the accompanying graphic illustrates, and the results are less than guaranteed as it requires a dedicated followership.
- The Kepner-Tregoe Matrix is a method that guides the decision-makers through a process of establishing goals, identifying and investigating the various approaches in achieving those goals, evaluating the approaches to determine those which might be most likely to be successful, and selecting what solution is to be pursued.
- The Recognition-Primed Decision (RPD) Process is an approach designed for those individuals who need to evaluate and make decisions quickly and under pressure. Given the conditions under which it would be employed, success depends on the training and skill of those involved in the decision-making process and those who will be responsible for those decisions to be carried-out.
- The Observe Orient Decide Act Loop (OODA Loop) was designed by John Boyd, a military strategist and Colonel in the United States Air Force. Its simplicity in design and effectiveness in use makes it a popular favorite decision-making method. A critical key to the OODA Loop’s success as a decision-making method is the “Loop” itself, which acts to guide and refine the decisions in a series of “continuously improving” outcomes.
- As such, it is closely related to the “Plan Do Check Adjust” (PDCA) – or “Deming Cycle” – most closely associated with “Continuous Improvement”. For those who know me, it will probably come as no surprise that of the decision-making processes listed here, using OODA Loops and PDCA would be my default decision-making process.
I am not proposing that any one approach or disposition is better or worse than another, as each have their strengths and weaknesses, benefits and detriments. And obviously, a team will probably consist of people who have a mix of such characteristics, dispositions, and orientations – but this is almost certainly a healthy condition and will more likely generate a “truth” than having a team that consists of an unbalanced constituency.
“The great thing about fact-based decisions is that they overrule the hierarchy.” ― Jeff Bezos
There is nothing that creates confidence and acceptance of a position or opinion to a community better than a fact-based argument. Facts are not emotional, they are just facts – the way things are. But how many facts or how much data needs to be collected to convince a community? Then the debate can shift focus to the interpretation of those facts; the reconciliation of “outlier” data-points, a review of the context and circumstances that generated the data results, how the data collected on past events can be extrapolated to predict future outcomes, etc…
Collecting data is about establishing comfort, overcoming fear – and mitigating risk.
There was recently a discussion in the Operational Excellence Group on Linked-In that promoted the “Rule of 200”. I never heard of the rule before, but I guess rules can be made (or at least promoted) by nearly everyone. The article was mainly about hiring people and collecting as much “data” on the candidate as possible before hiring – but it extrapolated the premise to all decision-making. It spoke of the need to collect “at least” 200 data samples before making a decision.
My question was; “Why stop at 200? Why not 500? or 1,000? Or more? And what’s to say that 20 isn’t good enough? or 10? or even 1?” Really, what is the purpose of collecting data other than to build a level of confidence within yourself and your community to the point where fear is overcome? Is there enough data that can be collected such that a neophyte in the disciplines involved can make a decision with a high degree of confidence that is correct?
How many times have we witnessed or experienced “paralysis by analysis” – seeing one study after another commissioned to investigate any given single subject – with a go/no-go decision never being reached? Does it get to a point where we begin to confuse “study” with “progress”? After all, a study never changes anything in and of itself.
As for hiring, I have never made a mistake in hiring someone – but I have made the mistake of not firing them when I should have a great many times. A fault I will probably always possess.
“A good decision is based on knowledge and not on numbers.” ― Plato
Consider, if you will, the early days of the National Aeronautic and Space Administration (NASA) and the manned space-flight missions (or its Soviet counterpart). There was not much data to be had, yet people would volunteer to be strapped to the top of a metal cylinder whilst a reasonably well controlled explosion hurtled them to places never before visited – with the effects and outcomes merely predicted, but entirely unknown.
Imagine two people; one in the Command Center, responsible for hitting the launch button – the other in the capsule, ready to be hurtled to parts unknown. One person has trusted their life to the hands of others that their engineering and science is sound – and especially to that one person who will make the decision to “go”, and who will have the burden of guilt forever if wrong.
Would you, or could you, be either of those people in the early days of space exploration? Would you or could you be either of those people even today? How much data would you need to collect and analyze to possess a high enough degree of confidence to be either?
How many of the greatest decisions of all time were the result of a volume of knowledge over a volume of numbers? Even if the knowledge itself was not vast, but more of a “gut instinct” – and with even less numbers? Compare those results with how many great decisions were the result of the near infinite collection and analysis of data?
“A good decision cannot guarantee a good outcome. All real decisions are made under uncertainty. A decision is therefore a bet – and evaluating it as good or not must depend on the stakes and the odds, not on the outcome.” ― Ward Edwards
We have all heard of Elon Musk, who made his first fortune as co-founder of PayPal. When PayPal was sold to eBay for $1.5-Billion of eBay stock in October of 2002, Musk’s personal wealth realized from the deal was $165-Million. That kind of pay-day and money would mean retirement for most of us. I am certain that I would contemplate retirement myself. At least I am sure that I would choose my assignments and responsibilities much more selectively.
But what did Musk do? He decided to invest these proceeds. And although investing the proceeds would not be unusual, what was unusual is that he decided to invest in high-risk start-ups.
In June of 2002, even before he sold PayPal, Musk had founded SpaceX, a private “space transport company”. By 2006, Musk’s personal investment in SpaceX had grown to $100-million (much of it from the proceeds of PayPal). Today, SpaceX – with its Falcon-1 and Falcon-9 space vehicles – provides considerable space transport services to NASA.
And certainly, everyone is familiar with Tesla Motors, which was founded in July 2003, Musk joined the company in February of 2004 – leading the “Series-A” round of investment with $7.5-million in personal funds invested. Tesla continued to hemorrhage money and, by February 2008, Musk had invested a total of $70-million of his own money to the company.
But still, in September of 2006, Musk went on to invest in a company called SolarCity; which is a manufacturer of Solar Panel Systems.
These investments alone would have consumed all of the $165-million pay-out realized by the sale of PayPal (and more) – and still no positive returns. Who among those reading this article would have the intestinal fortitude to risk their entire fortune – a fortune fit for a king and upon which a life of leisure could be realized. I am certain that I would not.
By late 2009, and according to court documents filed during his divorce, Musk had run out of cash and had no liquid assets (only investments). He was living on loans granted by friends.
In spite of these hardships – perhaps because of them – Musk believed in the potential of his investments and worked tirelessly to make them successful. With a “4 and 0” record of his investments being winners, in September of 2013 and according to Forbes, Musk is now worth about $6.7-billion.
Given the number of “first times” Musk has thus far experienced in his career, I am certain that his decisions relied less on “data collected” than on “gut instinct”.
“You will rarely make wise decisions if you surround yourself with fools” ― Rasheed Ogunlaru
Because the best decisions are not made in a vacuum; if you are going to be successful in your decision-making, it is imperative to surround yourself with the wisest people you can – those whose experience and expertise is relevant you can trust to be open and honest with you. Of course, this means you need to be capable of hearing the truth, even if you don’t like what you hear.
One of the best techniques that I know to be highly successful, and used to challenge and refine a hypothesis, is to “Red Team” the ideas; a practice which I learned the from one of my colleagues – a former Naval Aviator by the name of Carey “Vixen” Lohrenz – while we were on an “Operational Excellence” conference tour in Europe a few years ago.
In a “Red Team” exercise, the outcomes desired, challenges faced, and approaches planned are presented and discussed among the decision-making team and trusted outside advisors.
After listening to the presentation, the “Red Team” will start asking questions as needed to fully understand the situation. One important technique to note is that every “argument” will begin with the phrase, “Have you considered…” This is so the presenter understands that the argument is not a personal challenge, but a part of the discovery and refinement process.
In the end, if you surround yourself will fools and “yes-men”, then the success of any decision will mostly be due to luck, relying on hope. And hope is dope…
“Sometimes you make the right decision; sometimes you make the decision right.” ― Phil McGraw
But making a decision is not realizing success – it is only the end of the beginning. Success is realized in the act of engaging the decision and realizing the objective. As such, success is entirely dependent upon those responsible for the pursuit of the decision rather than the decision itself.
The Marine Corp speaks to the” 70% Solution” – the premise of which is; “If you have a plan that has a 70% chance of success, execute the plan and prosecute it with great vigor. There is no perfect plan, nor perfect time.”
Let’s face it, decisions are imperfect and always will be. The best that can be expected is that our decisions are sound – and sound enough such that we decide to proceed.
… And the level of perfection of the plans to engage those decisions will be even less so.
That is why it is important to surround yourself with the best resources you can; the brightest, the most skilled and capable, the most motivated.
… and you need to do your part by offering; the best support, training, outfitting. So that when the call comes, they are able to succeed – even if others in similar circumstances would fail.
So, how does a person make a decision? For me, the answer is simple – get to a point in the evaluation process where your confidence has overcome your fears. Then make the decision and go like hell.
“You are defined by the decisions you make. When one bites you in the ass, the way you respond to it either makes or breaks you. Regardless of whether the decision you made is good or bad, at least you had the balls to make one.” ― Benjamin Bayani, The Nation
By Joseph F Paris Jr
Paris is the Founder and Chairman of the XONITEK Group of Companies; an international management consultancy firm specializing in all disciplines related to Operational Excellence, the continuous and deliberate improvement of company performance AND the circumstances of those who work there – to pursue “Operational Excellence by Design” and not by coincidence.
He is also the Founder of the Operational Excellence Society, with hundreds of members and several Chapters located around the world, as well as the Owner of the Operational Excellence Group on Linked-In, with over 25,000 members.
For more information on Paris, please check his Linked-In Profile at: http://de.linkedin.com/in/josephparis