Monday, September 12, 2011
Sound Decision Making
The credit for the idea for this post goes to this morning’s “Management Tip of the Day” of the Harvard Business Review titled: “Avoid 3 Common Decision-Traps.”
Whether you’re a consultant advising your client on the best strategy to implement a change, a physician having to decide on the best treatment for your patient, a parent looking into a good high school for your teenager, or a leader concerned about how to keep your decreased workforce engaged and functioning up to their potential, decisions are made daily, or better, hourly. Decision making is critical in life and in business and all of us should be concerned with the quality of our decision making processes. It’s your choices, your decisions, and thereby your actions that create your results.There are many decision – making models to choose from so that deciding what model to use turns into its own decision making process. In this post I will not favor one model over another. Most of them make sense and are useful. They provide practical information on the different stages of decision making, whether it be 5, 7, 9 or any other number of stages. Stages that occur in most models are defining the situation, identifying objectives, identifying and evaluating options, and budgeting resources like time and energy.
What follows here is emphasis on aspects that often seem underrepresented – aspects that help assure sound decision making:
1. Know yourself! This might not be the first one that comes to mind when talking about decisions, but it sure is one of the foundations of sound decision making: What are your tendencies in and outside the realm of decision making? Do you tend to put more weight on the first information that comes in or not, on the big picture or on details? Which are your blind spots? What lessons have you learned from earlier decisions? And the list of questions goes on and seems covered by what I heard Harvard Business School Professor and former Medtronic CEO Bill George recently discuss under the heading of the all important Emotional Intelligence during a Leadership Conversation at the University of Minnesota.
2. Make sure to take multiple perspectives and to be your own devil’s advocate. Do not just consult ‘think-alike’ minds but gather information from different people, groups, theories, models etc. Dare to challenge your own assumptions, views, and all that is known to you and use insights and ideas from different fields of expertise.
3. Business ethics and conduct is under heightened scrutiny with the increase of insider trading, contractor scandals, and different types of power abuse. Or just think of increasing uncertainty in the world of business with multiple and often conflicting stakeholders, interests, and values. Corporations have established or revised their codes of ethics, business schools might be increasing their focus on business ethics, but it all begins with you: with your ethics and your sense of accountability. Which ethical standards do you adhere to during your decision making (and implementation!) process and how is this related to your company’s codes of ethics?
4. Emotions and values are not necessarily disruptive; they have positive functions if they are known, understood, shared or at least openly discussed. But how to deal with a situation in which an executive is faced with the dilemma of whether to improve the poor working conditions for which the company has been criticized, or to invest in new production facilities in order to remain competitive? No easy answers and a situation in which ethical considerations, emotions, values, multiple perspectives and knowing yourself and your company all come together.