Always try to reframe the problem in various ways. In assessing the benefits packages, for example, he decides that dental coverage is more important to him than a retirement plan, and he makes his rankings on that basis. Such decisions are worth spending time on, but after youve viewed them from a variety of perspectives, theyre not likely to get better with time. For practical purposes, alternative E is dominatedwe call this practical dominanceand you can eliminate it as well. The third? Taran Swan. As Ned Hallowell says in Driven to Distraction at Work (which was based on his decades of research on how to sustain productive attention), worry feasts on a solitary victim. When you ask others to participate in a question burst, youre making yourself vulnerable by sharing the problembut youre also summoning empathy, which fosters idea generation, as weve learned from design thinking. You estimate that franchising would reduce your profits to $10 million due to start-up costs, but it would increase your share to 26%. For example, it may feel safer to hide the problem from your boss, peers, and customers while you figure out what to do. Are you are starting to empathize with the manager you thought was being unfair? Write every question down verbatim on paper, a laptop, or a tablet instead of on a whiteboard so that you can capture everything accurately. Core Obligations We all have dutiesas parents, children, citizens, employees. HBR Guide to Making Better Decisions [Paperback ed.] 1633698157 Team memberseven an individual executivemay well have multiple reporting lines. How would a poor review and a possible job loss affect him, not just financially but also psychologically? In one study, the absence of attentive deliberation, AKA go with your gut, was demonstrated to result in decisions with better outcomes than those derived from the use of analytical tools.1 The Verdict My experience as an executive coach suggests that for the vast majority of decisions that my clients deem to be critical, a pros-and-cons list is useful only as a very high-level preliminary thinking aid. Where youre hoping to spur individual performance, you can emphasize an equitable process. In one series of tests, people were asked to forecast the next weeks closing value for the Dow Jones Industrial Average. Finally, commit to pursuing at least one new pathway youve glimpsedand do so as a truth seeker. Instead, they fall prey to what James March and his coauthors describe as garbage can decision making: a process whereby actors, problems, and possible solutions swirl about in a metaphorical garbage can and people end up agreeing on whatever solution rises to the top.1 The problem isnt lack of data inside the garbage can; the vast amount of data means managers struggle to prioritize whats important. Learn how to make better, faster decisions. Faced with this choice, 80% of these respondents preferred Plan D. The pairs of alternatives are, of course, precisely equivalentPlan A is the same as Plan C, and Plan B is the same as Plan Dtheyve just been framed in different ways. By asking the group to generate as many questions as possible in the time allottedtry for at least 15youll keep them short, simple, and fresh. Afterward, the participants were asked to estimate the percentages of men and women on each list. Otherwise, its just throwing good money after bad. Discuss the collaborative output. While an organization can get carried away with decision bureaucracy, in general its wise to not leave important decisions totally up to individualseven the CEO. Guess what? Osteria Francescana is a place where rule breaking is encouraged, right from the top. Are you more positive than you were four minutes ago? Neutrality is essential when the brainstorming leader has substantial influence over the group. Designers know that you must think laterallysearching far and wide for ideas and influencesand must also be willing to try connecting ideas that might not seem to go together. POLL A GROUP OF ADVISERS If checking your gut still doesnt give you the confidence that youve made the right choice, ask around for advice. Its also easy to view your decision as picking winners and losers and then to disparage the losers. For example, if you decide to fulfill certain customers orders and delay others, you might try to make yourself feel better by saying that those who are getting delayed orders arent valued customers anyway because they dont always pay on time or they order less. But the question is really about what will work if you bring persistence, dedication, creativity, prudent risk-taking, and political savvy to the task. The bonus checks of our top-quartile performers are not much higher than those of the bottom quartile. A description of the objectives or decision-making criteria. Second, create a timeline with explicit milestones: the date the decision will be made, the date it will be communicated to anyone affected, the date it will begin to be implemented, and the date that implementation is expected to be completed. Instead, talk to people you trust about the decision and your assessment. : How Clear Decision Roles Enhance Organizational Performance, 3. If so, then our intuition will lead us to reject a perfectly good option. In a hierarchy, any managers failure to have ready answers may be perceived as an embarrassing stumble. For example, if youve lost your job, then not acting carries unacceptable risks. They find the status quo comfortable, and they avoid taking action that would upset it. Better yet, build the counterarguments yourself. Sully had 155 people on board and very little time to find a place to land in a city of tall buildings. Could it result in loss of profits or competitive advantage? (PDF) The Hidden Traps in Decision Making - ResearchGate With your team, create a KJ diagram (named after author Kawakita Jiro and illustrated in figure 12-1) to sort facts into causal relationships. As a result, no new ideas surfaced, and the group settled on the first alternative suggested, which had been the managers idea. Mitigate or compensate for the harm. Explaining builds trust in the leaderships intentions and confidence that the choice was made for the benefit of the entire company. Share the Knowledge Its a lot easier to sweep bad decisions under the rug and pretend they never happened. However, if you explicitly recognize the role that uncertainty and value complexity play in making these decisions difficult, you can take steps to ensure youre making the best choices with the information you haveand you can help those affected by your decisions better accept the consequences. For example, if you cant fill all customers orders, can you test having a few sales reps call select customers to delay orders and see what the response is? Reconsidering or revoking a decision for the wrong reasons slows down your organization and plants the seeds of an indecisive culture. When searching for food, successful ants leave traces of pheromones along their trails, a signal to the other ants that theres a path to dinner. In a business setting, asking basic why questions can make the questioner seem nave, while putting others on the defensive, as in, What do you mean Why are we doing it this way? Weve been doing it this way for 22 years! But by encouraging people to step back and reconsider old problems or entrenched practices, the designer can begin to reframe the challenge at hand, which can then steer thinking in new directions. The fix Clarify the decision-making process. Will implementation require us to borrow money? The second strongest reason? Once youve calculated the total scores for a few things, you can compare them. Heres an example. Theyve lacked a clear, rational, and easy-to-use trade-off methodology. In the end, we found option B to be the best choice, given our objective of scaling bonuses to measurable contributions. Fortunately, there are ways to overcome each of these issues. But rebels understand that its always worth resisting time pressure to give yourself a moment to reflect. Using pencil and paper or a computer spreadsheet, list your objectives down the left side of a page and your alternatives along the top. They asked whether she was sure about what she was doing and suggested that the real problem might be her management. Getting more perspectives reduces your bias and increases buy-in, but bigger groups have diminishing returns. Resources. And, as Palmieri told me, It simply took a change of course, and one pizza. Nobody likes a troublemaker at work. How can you act in a way that reflects and expresses those belief systems? In addition to reviewing the causes and manifestations of these traps, we offer some specific ways managers can guard against them. She presents a strong case that other currencies are about to weaken significantly against the dollar. To facilitate collaborative exploration, one of our favorite exercises (often used in art schools) is what we call the passing game. WHAT CAN YOU DO ABOU T IT? Make Better Decisions - HBR Store The HBR Guide to Making Better Decisions provides practical tips and advice to help you identify the problem, evaluate your alternatives, select the right . To up your odds, keep these principles in mind: Traditional divergent-thinking techniques (for example, making random associations or taking on an alternative persona) can help unlock new questions and, ultimately, new territory. Although a consequences table is not too hard to create, were always surprised at how rarely decision makers take the time to put down on paper all the elements of a complex decision. Remind yourself that even smart choices can have bad consequences, through no fault of the original decision maker, and that even the best and most experienced managers are not immune to errors in judgment. In this case, Vincent easily concludes that the one-day vacation advantage of Job D is far outweighed by its disadvantages in salary, business-skills development, and benefits. 1 (1997): 95104. By now Ive used it with hundreds of clients, including global teams at Chanel, Danone, Disney, EY, Fidelity, Genentech, Salesforce, and dozens of other companies; nonprofit organizations; and individual leaders Ive coached. Sully, 89 sunk-cost trap, 1922, 206 team-based conflict, 78, 193196 team decisions, 4647 lack of consensus in, 193196 technology, 45. Try these techniques: Seek out and listen carefully to the views of people who were uninvolved with the earlier decisions and who are hence unlikely to be committed to them. After a careful analysis of the long-term benefits of increased share, you determine that a 3% increase would make up for the lost $15 million. Many mergers, for example, founder because the acquiring company avoids taking swift action to impose a new, more appropriate management structure on the acquired company. She prefaced her question burst with a simple explanation, sharing her hopes for getting everyone rowing in the same direction and her frustration that one set of messages couldnt do the job, given employees diverse roles and perspectives. Working row by rowthat is, objective by objectivedetermine the consequence that best fulfills the objective and replace it with the number 1; then find the second-best consequence and replace it with the number 2; and continue in this way until youve ranked the consequences of all the alternatives. The challenge now is to make the right trade-offs between them. In fact, anything that distorts your ability to recall events in a balanced way will distort your probability assessments. Unfortunately, the same simplicity that makes a pros-and-cons list so appealing creates many opportunities for a host of cognitive biases to emerge, including: The framing effect. NOTES 1. For executives, whose success hinges on the many day-to-day decisions they make or approve, the psychological traps are especially dangerous. To answer those questions, you might think about the defining stories of a particular groupthe decisions and incidents that everyone cites when explaining the ideals to which you are collectively committed, what you have struggled to achieve, and what outcomes you try hard to avoid. The Hidden Traps in Decision Making Understand the misperceptions and biases that cloud your judgment. (See table 11-2.) The approach helped the firm be thoughtful about the stocks it followed: One person who followed a particular stock would make a recommendation on buying or selling it; another would argue the opposite. It became the bane of my existence very quickly, he says. His work has been translated into 28 languages, is available in 36 countries, and has generated results for 300 of the Fortune 500. For businesses in todays volatile marketplace, the ability to question and rethink basic fundamentals What business are we really in? NOT ALL QUESTIONS ARE CREATED EQUAL Often, as Im outlining the rules for a question burst, people ask what kinds of questions they should contributeor how they can be confident that a question is a good one for further pursuit. BY CAROLYN OHARA SECTION FIVE.