Chapter 2
IN THIS CHAPTER
Identifying why a decision needs to be made
Amassing and analyzing data
Generating viable options and making the final decision
Communicating and implementing the decision
Understanding intuitive decision-making
As a decision-maker, you face all kinds of situations in your business, and each situation calls for a different decision-making approach. Some approaches are rational and analytical; some are more intuitive. Despite their differences, both rational thought and intuitive thought gather and make sense of information in an attempt to arrive at the best course of action.
Whatever approach you use, you can benefit from understanding the basic steps to making sound decisions. In fact, for every decision you make, you’ll touch on — accidentally or intentionally — the steps we outline in this chapter. We also show how your intuition enables you to make rapid-fire decisions in quickly changing, high-risk situations.
Being clear on why you’re taking action guides implementation. Establishing purpose (the why) is a must-do, front-end task because you reduce the risk of mistakes and misunderstandings when circumstances change. Purpose provides the focus for thinking, action, and all the micro-decisions that lead to the result.
Decisions are made for several reasons. In business, the two most common reasons for making a decision and taking action are to address a problem or to seize an opportunity:
When the reason for making the decision is clarified, being super clear about what you’re hoping to achieve (the outcome or result) provides the focus for getting there. Make sure you can articulate the following:
Actions can be propelled by urgency (you need to do something fast) or inspired by vision and opportunity in the longer term. Articulating what you want the decision to achieve gives you a good idea about whether you need to take a tactical or strategic approach.
To understand the difference between strategic and tactical actions, consider this situation: The workload at your company has become intolerable, and your employees are stressed and requesting overtime pay. In addressing the problem, you can take a tactical approach or a strategic approach:
Many decisions that fail do so because they were made using narrow thinking. You don’t know what you don’t know. Narrow thinking can torpedo your business decisions. Consider the business owner who, when her decisions were questioned, always answered, “I know what I’m doing.” She carried on … right into bankruptcy. To avoid the dangers of limited thinking, try to gather relevant information from as many different perspectives as possible, especially the ones you disagree with.
In this section, we outline sources of information and tell you how to vet the info you find.
Depending on the issue you’re confronting or the reason you’re taking action, you may have to conduct extensive research, consult with colleagues who have already successfully faced a similar question, and consult with employees and customers. When doing so, your intention must be to learn rather than to confirm that your own ideas are right. A genuine inquiry builds trust and uncovers key factors critical to decision-making.
The primary goal at this stage of the decision-making process is to look at the situation from as many different angles as you possibly can. Sometimes this task can be difficult, especially when you don’t agree with the ideas you hear, but it is well worth doing nonetheless. Doing a thorough job of gathering information gives you a wide variety of viewpoints to consider, uncovers potential pitfalls, and reveals unstated needs that must be addressed if your decision is to be effective.
Following are some ways you can gain the varied insight and information you seek:
You can see a situation more clearly when you haven’t got your nose in it. For that reason, when you gather information, you want to maintain some distance. Doing so helps you objectively assess the information you receive. You’ll be better able to see which questions you need to ask and to recognize who needs to be involved.
Gaining distance is easier said than done, for two reasons:
Gathering accurate information in a highly interconnected communication environment is challenging, especially because each person can see only a part of the overall picture. What people see depends on their unique perspectives, and what they understand is determined by what they know about their part of the picture. For this reason, you need to pay attention to as many different perspectives as possible. When gathering intelligence, try to do the following:
Facts — such as the amount of money allocated for a project and the amount spent, the number of employees who work for the company, and the employee turnover rate — can be verified and proven. At some point, however, facts can get mixed up with opinions (based on perceptions) and ideas. The key is being able to discern between them, and the challenge is being able to do so in the midst of change.
When people are in the midst of change and the future is unknown or uncertain, they start guessing about what will happen to feel more certain about what lies ahead. Before long, speculation is running amok because people don’t know what to expect or lose confidence in where and how they fit into the changing world.
You can address speculation in two ways:
The idea that humans are logical beings is nice, but it’s not realistic. Although facts appeal to the rational mind, feelings guide what people do. Therefore, when you’re gathering information, you want to include the emotional environment. Doing so can provide valuable data.
You don’t find this kind of information in reports or data charts. You find it by making connections with people, being genuinely curious, and listening actively, with your mind — not your mouth — wide open.
Whether you use surveys combined with in-person relationships, engage in joint projects, or facilitate open lines of communication with employees and customers, you can follow these simple strategies to discover what matters to your employees and customers:
https://sustainablefoodlab.org/
), companies partner with nonprofits to insert sustainable practices into the food supply chain. This large collaboration, in which the partners bring totally different mind-sets, develops internal leadership skills while simultaneously tackling a bigger issue.Gathering information isn’t about feeling absolutely certain or waiting until everything is perfect before you act. It is about feeling 80 percent satisfied that you’ve looked at the situation from as many directions as possible and that you have enough information to make a good decision. Then you’re ready to move on. When determining how much information is enough, consider the following factors:
After you gather information, the next step is to make sense of it. In short, it’s time to analyze the data. Factors that determine how you’ll proceed include how much time is available and whether you need to justify your decision to investors, customers, employees, or shareholders.
Follow these steps to sort and analyze the information you’ve gathered:
Identify the facts, data, and raw numbers relevant to the decision and determine how you’ll crunch the numbers so they can inform the decision or selection of options.
Big data is the term given to the proliferation and abundance of data decision-makers must consider. Computer programs available for analyzing complex data include spatial, visual, and cloud-based presentations. For an example, see www.spatialdatamining.org/software
. You can find a list of the top free data analysis software at www.predictiveanalyticstoday.com/top-data-analysis-software/
.
Sort the social and emotional information into themes.
The themes can be trends (the direction for societal preferences), dynamics (the interrelationships that exist), and needs or preferences (which point to the underlying values that inform decisions), for example. These things tell you about what lies ahead so that you can predict what the response will be to your decision. Use them as a lens to identify what you need to consider in choosing options, or to ensure that you meet social and emotional needs during the implementation process.
Identify the considerations you see as relevant to either making the decision or implementing it.
To synthesize what’s important to consider in your decision-making, explore the facts (the rational-logical portion) and what is going on in the situation (feelings/emotions or relationships/social). Pull out the main ideas to use in subsequent steps. You can either use a mind map (a method to visually map related ideas) or you can tuck related ideas under the key points so you can see the relationships between the information you’ve gathered.
For example, if you were launching into a new market, as Target did into Canada, you’d want to ask Canadian customers what Target products they prefer. Customer preferences would be a theme; the product, price point, and customer expectations for service would form a part of the background decision-making.
Map out consequences — how the decision will affect staff, customers, employees, and suppliers, for example.
Knowing the consequences helps you make adjustments and informs what and how you’ll communicate any changes to your listeners, based on what they currently expect or are familiar with.
If you’re using a rational decision-making process, select criteria you’ll use to consider options before making a final selection.
You need to identify the criteria you’ll use to assess the options under consideration. Refer to the later section “Establishing and weighing criteria” for details.
By now, you’ll know which information is most relevant, whether you’re relying exclusively on analysis of the data or combining it with your intuitive know-how. If you’re making your decision purely intuitively, you’ll use what you perceive to be important and will rely on how the data is presented to pull out key points.
Mistakes get made when critical thinking isn’t applied. When you think critically, you become your own devil’s advocate, so to speak. You examine and reflect on your own thinking and question assumptions or conclusions. If you find critical thinking hard to do solo, enlist a colleague’s help or engage the entire team by doing some individual reflection first and then coming together to exchange observations.
To critically evaluate your data, ask these questions:
Decisions get made all the time based on assumptions. Assumptions can be calculated guesses you make when you’re missing essential information, or they can be ideas you accept as true without proof and without thought. Depending on what kind of assumption you’re making — the educated-guess kind or the I-believe-it-just-because kind — assumptions can help or hinder your decision-making.
Using assumptions works under these conditions:
In a rational decision-making process, you use the information you gather to establish criteria that specify what each of the alternatives under consideration must meet to accomplish your goal. You can create the criteria on your own (for personal decisions) or collectively, as you do when you work in a team or in a collaborative venture.
Establishing a list of criteria by which to judge the options in front of you offers benefits such as the following:
Criteria specify the conditions that must be met for an option to be considered. We explain how to establish and weigh criteria in this section.
Start by making a short yet complete list of the conditions that must be met. If you’re hiring, for example, list the criteria any viable candidate must have. You don’t want to be the company who hired a VP only to find out he is afraid of flying!
Sort the list items into one of the following two categories:
Must Haves category: Think of the Must Haves category as the go or no go category. The option being considered (or the candidate in the case of a hiring decision) either meets the criteria or doesn’t. If it meets the criteria, it moves on in the review process. If it doesn’t meet the criteria, it’s out.
Be sure to test the items on the Must Haves list to make sure list they’re essential. For example, imagine that you’re hiring a new sales manager, and you think a degree is essential. To test this criterion, ask, “If a candidate comes along who brings experience worth far more than a degree or who lacks a degree but has a proven track record, do we still reject that candidate because of his or her lack of degree?” If you say that you would still consider this candidate, even without the degree, the criterion of having a degree is comparative, not essential.
Comparative criteria are usually assigned a weighting from 1 to 10, with 1 indicating not important and 10 indicating very important. (Anything below 6 probably isn’t important enough to be a criterion.) In this section, we give you two tools to help you apply criteria in your decision-making.
When you’re considering several comparative criteria, each with a different relative importance, follow these steps to see how the different options stack up:
Create a table in which you list each comparative criterion and assign each a numeric value out of a total possible 10 points.
Importance, or relative value, is determined relative to the other criterion.
For each option being considered, assign a score assessing how well the option meets that criteria.
Measure each option against the criteria, scoring each by using the relative weighting you’ve assigned. If the comparative criteria has a high possible score of 8, for example, and the option under consideration fully meets the criteria, give it an 8. If it doesn’t meet the criteria, give it a lower score.
After you score each of the options, multiply the option’s score by the criterion’s relative value and — voila! — you have a final tally.
For example, if the relative value of a criterion is 8, and the option was scored a 6, the final tally is 48. Table 2-1 illustrates how to use criteria’s’ relative values to evaluate the options. Place the option at the top of the table and evaluate each alternative, using the scoring sheet. When you’re finished, you’ll have a score that tells you how well the option did against the criteria you set.
Add the scores for each option to get a total for each alternative.
Taking this extra step lets you compare, at a glance, the total scores to see which of all your options has the highest score.
TABLE 2-1 Scoring Option A — an Example
Criteria |
Relative Value |
Option #1 Score |
Final Tally for Option #1 |
User-friendly for the customer |
10 |
8 |
80 |
Easy to repeat |
8 |
5 |
40 |
Fits into an airplane storage space |
8 |
6 |
48 |
The Pugh Matrix, designed by Professor Stuart Pugh, answers the question, “Which option will most improve what is in place now?” by including a baseline in the calculations used to weigh comparative criteria. The use of the baseline indicates whether the option will positively improve or negatively subtract from what is currently in place.
To use the Pugh Matrix, follow these steps:
Make a list of five or fewer of your most important criteria or conditions.
More than five and the list gets cumbersome. Ten is way too many.
As you consider each criterion and each option, ask, “Will the result be better or worse than the current system?”
If the option is better than the current system, assign it a +1. If it is worse, assign it a –1. Table 2-2 shows an example of the Pugh Matrix in action.
Tally the pluses and minuses to see which is the best option.
In this example, Option 3 dominates with three pluses and one minus, making it the logical choice.
TABLE 2-2 Assessing Options by Using the Pugh Matrix
Criteria |
Baseline (What We Have Now) |
Option 1 |
Option 2 |
Option 3 |
1 |
0 |
+1 |
–1 |
+1 |
2 |
0 |
+1 |
+1 |
–1 |
3 |
0 |
–1 |
–1 |
+1 |
4 |
0 |
–1 |
–1 |
+1 |
An organization that delays making a decision for too long is most likely stuck in the analysis stage. If you were to ask why a decision hadn’t been made, you’d hear reasons such as, “There isn’t enough information,” or “Conditions are changing too quickly,” or “We have too many options to choose from.” The result? No decision is made or no option chosen.
Companies and people find themselves in this predicament for a few reasons:
How do you shift out of analysis paralysis? What can you do to restore employee morale? Start by recognizing that conditions are changing constantly. To regain control and pave a path that enables you to make concrete decisions and action plans, follow these suggestions:
Get a fresh new perspective on the decisions under consideration. Ask someone from outside the unit what he or she would do. Or change your environment to see the decision from a different context.
Research shows that more information doesn’t necessarily mean better decisions. Hesitating to make the decision because you don’t have the absolute best information is a trap. It means that you need to be perfect or right. Avoid it.
In decision-making, the term options refers to the different alternatives or solutions under consideration. Whether you’re buying a computer, upgrading office space, or hiring an accountant, for example, you must decide which alternative offers the best solution. Some decisions, such as purchasing equipment, must result in the selection of only one out of several alternatives. Other decisions may benefit from working with more than one option simultaneously.
In this section, we explain how to come up with options, how to work with the risk of uncertainty, and what to do when you have too few or too many options to choose from.
When you’re making a decision, having only one option to consider isn’t really an option. When you focus on only one idea to address your dilemma, you face two risks: that your (or your team’s) tunnel vision has bypassed potentially better solutions and that any decision you make will keep you safely, and potentially stagnantly, in the status quo.
People think that they have only one choice for the following reasons:
The solution to overcoming narrow or fearful thinking is to reawaken and apply creativity. Seek ideas and additional options by involving employees, customers, suppliers, and other involved parties (and don’t forget to give credit where credit is due!). Tapping into additional sources’ creative ideas helps you avoid missing an optimal solution no one has thought of yet.
Brainstorming has long been used to come up with ideas, but in brainstorming, strong-willed people too often end up pressuring others to conform to one view — theirs! Because creative work is best accomplished privately — many brilliant ideas come up in the shower or when you’re gardening — we recommend that you take a different approach. Follow these steps:
Ask team members to identify one or more solutions on their own.
Independently coming up with ideas enables creative ideas to come forward that might otherwise not be heard in a group setting.
Collate potential solutions so that you have access to a wider range of possibilities.
Bringing the ideas together allows the team, whether working remotely or in the same location, to see which alternatives fit.
Discuss the merits of top ideas.
Bring the top ideas forward to work with. Solicit team members’ perspectives on which alternative appeals and why it has merit. Include any risks associated with the option, as well as its pros and cons.
Always consider dissenting views because they hold valued insights. Collaborating may result in creating a new solution or, at minimum, identifying the most viable alternatives.
After discussion, short-list the alternatives — have participants select their top three choices, for example — and then gain consensus from the team.
An easy and reliable way to short-list is to use dot voting, in which you give participants dots (you can buy these little dots from stationary stores) that they then use to identify the alternative(s) they find most appealing.
Dot voting is a great way to rank ideas or to see where the preferences lie. It’s not used to make the final decision. Dot voting has several rules, such as how many dots you hand out (this number is based on how many people you’re working with and how many choices are under consideration) and whether you can let participants load up their dots on one idea (it’s generally a no-no!). For detailed instructions on dot voting, go to http://dotmocracy.org/dot-voting/
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At this point, you should have a short list of viable options that you keep open as you move forward.
If you’re using a criteria-based decision-making process, you can now match your options against the criteria you set earlier on. Refer to the earlier section “Establishing and weighing criteria” for details. Otherwise, you can select one or several to move forward on simultaneously. Keep reading for the details.
Looking for one option or solution works best when you need only one solution, such as when you buy a software package, select a new location for your office, and so on. In these cases, you need to select the single, best option that meets your needs.
A super-rational decision-making process works well in predictable environments where the information isn’t moving at breakneck speed and you can take the time to deliberate. The process we outline in the earlier section “Establishing and weighting criteria” — especially in regards to using a scoring sheet or the Pugh Matrix to discover the best option in front of you — can help you do that.
In the case of project implementation or, at a higher level, determining strategic direction, new information pops up all the time. The situation is unpredictable and quite fluid. Selecting a single option to adhere to is like trying to put a foot down while the train is still moving. Instead, view your options as scenarios. Doing so helps in situations where there are multiple possibilities in fast-changing circumstances.
Scenario forecasting, an approach to risk management, is a way to keep options open by exploring scenarios and changing how you allocate resources. In scenario forecasting, you prepare for a world with multiple possible futures by creating a concrete plan for dealing with an abstract but probable future event.
When you use scenarios to prepare for future events, you’re truly thinking big and mitigating risk exposure. Fortune favors the prepared. Consider FedEx, for example, which relies on petroleum as its energy source. If the global forecast predicts a world shortage of petroleum, rising gas prices will increase FedEx’s risk of relying solely on one fuel source. By working through this kind of scenario — imagining a world in which petroleum is in short supply or imagining options that address the problems caused by a shortage of petroleum — FedEx can identify various ways to mitigate its risk. It may look at strategies that reduce energy use, identify reliable sources of alternative energy such as biofuels, or investigate other options that alleviate reliance on petroleum.
Working with risk is risky. Although your mind can assess risk logically, psychologically, you handle risk in a totally different way. In this section, we explain how to calculate risk in your mind, look at how human psychology works when facing risk, and, finally, show you how to avoid underestimating risk.
Calculating risk rationally engages your mind in a way that identifies the risk and assigns a value to how serious that risk is. Follow these steps:
Start by asking the question, “What can possibly go wrong?”
The answer identifies potential risks arising from different sources. These are unique to the situation. For instance, in bridge building, one way you’d use this lens is to uncover potential engineering flaws. In marketing, you’d use it to identify assumptions being made about the market.
Ask yourself, “What is the probability of this event happening?”
Assign the probability a high, medium, or low rating. This step separates the big risks from the tiny ones and helps you identify the likelihood that you’ll face the risk in reality.
If you detect a risk that is lying on the periphery of what everyone is paying attention to, name it.
Identify the seriousness of the event’s effect on your business, using the high, medium, or low rating.
This step isolates the risks that may have a low probability of happening but very serious consequences if they do — a reactor failure in a nuclear power plant, for example. On the other hand, a number of risks may surface that have both high probability and high seriousness.
By looking at probability and seriousness together, you identify risks that you need to address in the decision-making process, either by making a contingency plan or by addressing the risk early on in the process to prevent it entirely or mitigate its effects.
Develop and incorporate ways to prevent, mitigate, or eliminate the risk into your decision-making process.
If you can’t prevent it, plan to have a backup plan. For instance, in the case of electrical outage, most buildings have a backup generator. How far you take efforts to mitigate risk depends on the seriousness of the consequences.
When a risk is real, specific, concrete, or immediate, it is much easier to relate to. For instance, when you jaywalk across the street in a high traffic zone, the risk of being hit by a car is pretty real. Conversely, a risk that is possible but not tangible — such as the chance of needing trip interruption insurance — is treated differently. Why? Human psychology. Consider the following points:
Especially when making complex decisions, few people see unintended consequences, the unanticipated, wider effects that result from an action. Think of a spider web. If you jiggle one strand, the whole system is affected. The decisions you make can have similar effects. If you limit your attention to only one strand — that is, you make a decision looking only at one part of the whole picture — you won’t see how the strands are interconnected. Such tunnel vision causes decision-making errors.
When you see the big picture, you can more accurately identify the direct consequences of a decision and action plans, and you can predict the indirect effects. Doing so reduces the chance that you’ll be blindsided or make a decision that takes a nosedive. Use a mind-mapping process to see how a decision may play out and to see who will be affected directly and indirectly.
Most decisions that backfire do so for two reasons:
A popular tool for mapping out whom or what the decision affects is a mind map (the brainchild of Tony Buzan, expert on the brain, memory, creativity, and innovation). Mind maps are incredibly useful because they help participants tap into both creative thinking and linear-logical thinking. Mind maps graphically represent the various aspects of a topic. In the case of decision-making, they can bring the pieces of the puzzle or process into one visible picture.
An effective decision has these characteristics:
Reflects a positive attitude: Negativity is like glue. It slows everything down, saps energy, and undermines momentum. If your attitude is negative during the decision-making process, or if the decision-making environment is highly stressful, you’ll make a poor choice. Period.
Negative attitudes and critical thinking are not the same thing. Critical thinking improves a decision. Head to the earlier section “Critically evaluating your data” for an explanation of the difference.
Transparency of information creates trust, which is important in business environments and vital when change is being made. Decisions made behind closed doors are always suspect. Therefore, after the decision is made, you need to communicate it. How you communicate the decision is everything. Basically, you want your message to summarize the decision you’ve made, why you’ve made it, and what it means for the audience you’re addressing. When you communicate your decision, include the following:
The implications: What the decision means to both your internal network and your customers or clientele. Address how the solutions will help and speak directly to the changes that these groups would be likely to see as losses.
Few things are worse than hearing that tired old phrase “Out with the old, in with the new.” People fear loss and change more than they value gain. Meeting emotional needs when you’re both making and communicating a decision is frequently overlooked but of vital importance. People are less interested in the decision itself and more interested in what that decision means to them.
Finally — it’s time for action (as if you’ve been sitting around all this time)! Getting things done is where rational and logical thinking really delivers. So what do you do? You create an action plan. This section has the details.
An action plan guides the implementation of the decision and helps monitor progress. The more complex the task, the more people involved and the more key activities and sub-activities are needed. In an action plan, you list the tasks that need to get done, identify the parties responsible for each task, set timelines for completion, and indicate what successful completion of a task looks like.
To put together your action plan, follow these steps:
Individually or collectively list all the steps that need to be accomplished to get the job done.
Involve the team and any other units that will be involved in the implementation of the decision. Doing so ensures that no task gets inadvertently left out.
If you’re doing this task in person, put one action step on a sticky note or 3-x-5-inch index card. Then you can rearrange them easily to get the timing and order worked out.
Set priorities.
Some actions are immediate and some can wait. To establish which decisions or parts of an action plan are more critical, set priorities. For additional information on priorities, refer to the next section.
Pull out higher-level action items and then rearrange the sub-activities so that each appears below the higher-level action with which it is associated.
The higher-level actions are like parents to the rest; taking care of them resolves other issues down the line. (The term parent-child refers to actions that are related to one another. By taking action on the parent, you look after the child. Noticing such relationships allows you to leverage your efforts.)
For instance, if you’re starting a company, the higher-level action may be to get the company legally registered. Sub-activities could include deciding what legal registration fits, generating and submitting names for the company so that your company’s name isn’t already taken, and so on.
This step lets you see how each sub-activity contributes toward your overall goal; it also helps you identify the tasks associated with each action step.
Set time frames for completion or, at minimum, checkpoints for review.
Avoid the label “ongoing,” which may lead people to assume that things are moving along on this action item when, in fact, it may be stalled or overlooked.
Define what the task will accomplish so that the endpoint is clear.
Agree on what successful completion will fulfill. Everyone involved in implementation needs to be on the same page, holding the same picture of what the result must accomplish so that everyone can adapt during implementation as conditions change.
www.cyberciti.biz/tips/open-source-project-management-software.html
.www.hongkiat.com/blog/project-management-software/
.https://www.softwareadvice.com/project-management/
.In addition, social collaboration tools help facilitate information exchange. A range of solutions is available, and new software products pop up all the time. Companies such as http://www.Nooq.co.uk
facilitate rapid information exchange in small to medium-sized companies. IBM social platforms or Microsoft’s products, such as SharePoint, offer large-scale content management solutions. Go to http://mashable.com/2012/09/07/social-collaboration-tools/
for details.
You’ve probably heard the business maxim, “What gets measured, gets managed.” In short, metrics matter. Establishing the measures you’ll use to track performance ensures you pay attention to what matters and to whom — the customer or internal operations. Choose the right metrics, and you get information that helps you make good decisions; choose the wrong metrics, and you may inadvertently create issues that you then have to deal with. In this section, we offer two examples of how your choice of metric can support or undermine your business goals.
Getting the metric right can take awhile, but knowing what you want to achieve is the place to start. Suppose, for example, that you work for a telecommunications company, and your company wants to improve customer retention. To achieve that goal, it targets the customer service function and decides to use length of call time as its metric, assuming that shortened call time will result in greater customer satisfaction and retention. Sounds reasonable, right? After all, no one likes being on a customer service line for what seems like an eternity.
Now put yourself in the customers’ shoes. Imagine being on a call with your mobile provider where your problem never got solved but they had you off the line in less than five minutes. Do you, as the customer, consider the call a success? Not a chance. If customer service performance is measured by the length of call time rather than whether the customer’s problem was successfully resolved, you have not improved customer satisfaction or retention, although you may have improved call time. The customer will be a long way from feeling delighted. In fact, you may have annoyed the customer so much that he looks for another provider.
Now suppose that the metric you use is whether the customer’s problem was solved to his or her satisfaction. Chances are your company would have happier customers who are more likely to continue to use your service.
Suppose that you want to reduce turnover rate because you know that replacing people is costly. The metrics you use to measure the actual costs of losing an employee direct the focus of your efforts to retain people:
With this calculation, you may discover, for example, that having to replace an employee costs you 2.5 times the lost employee’s salary.
To ensure that you do the tasks in the correct order and to allocate resources, which tend to be in chronically short supply in most businesses, you must set priorities. By setting priorities, you know what to pay attention to first and where to direction your attention so that you don’t try to do everything at once.
In establishing priorities, think in terms of these three categories:
As the implementation of the decision unfolds, you’ll find yourself making adjustments to your plan due to practical and emerging realities as unintended consequences and changing conditions unfold.
As you implement your changes, monitor the consequences of the decision and adjust the implementation plan to reflect what is happening. Here are some suggestions:
Unless you and your company are devoted to learning, you’ll fall into a pattern of recycling the same decisions over and over again. You can use self- and organizational awareness to avoid this fate. Companies that develop this awareness have a clear edge. One way to increase self- and organizational awareness is to take time for reflection. Following are two approaches:
For bigger decisions that went badly sideways, collectively reflect on each part of the decision-making process. Ask probing questions, such as
Applying a critical and constructive review allows the organization to learn from the decision-making process.
Most decisions happen instantly (the whole decision-making process may be over in milliseconds) and are made entirely without your conscious knowledge. When you don’t have time to consciously work through the decision-making process, what do you do — take a wild guess? No, you use your intuition.
Intuition is the ability to know or identify a solution without conscious thought. And where does this ability come from? One source is from experience you gain by making decisions, something called implicit knowledge. With implicit knowledge, the most recognized form of intuition, the more experience you have making decisions in diverse, complex, unstructured situations, the faster and more accurate your decisions are. In this section, we provide more details into how intuition works in both stable and highly volatile situations.
When you’re under pressure, you may not have time to mentally generate different options, evaluate their practicality, and then choose one. You need to act quickly! Intuition equips you to make fast, accurate, and workable decisions in complex, dynamically changing, and unfamiliar conditions. Higher-level strategic decisions rely heavily on intuitive intelligence, for instance. Here is how your supercomputer, your intuition, operates:
And it does all of this in milliseconds!
As the preceding steps indicate, part of the intuitive decision-making process is an assessment of whether the situation is typical or atypical. If the situation is typical, your supercomputer retrieves options that have worked before, rapidly tests them, scans them for weaknesses, and modifies them if necessary before selecting one. This process, described by Gary Klein in several of his books, most notably Streetlights and Shadows: Searching for the Keys to Adaptive Decision Making (Bradford), is illustrated in Figure 2-1.
If the situation isn’t typical, your supercomputer goes into overdrive. This is where experience matters. Your internal supercomputer looks for more information until it senses that enough has been gathered, and then it runs through some scenarios to see which one will work, makes any necessary adjustments, and then the decision is made. Figure 2-2 shows this process.
Quite frankly, neuroscientists still aren’t sure how the brain selects the right information from so many signals. One thing is for sure: Intuition is efficient, and it works, especially when there isn’t any structure to lean on, when you aren’t really sure what will happen next, when conditions are volatile or ambiguous, and when there is an immediate reaction to events.
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