Order and simplification are the first steps towards the mastery of a subject—the actual enemy is the unknown. | ||
| --Thomas Mann[1] | ||
A good objective gives your decision a clear aim. The purpose of constraints is to further sharpen this aim with other important relevant factors.
By their nature, constraints limit the scope of the applicable solutions. If you miss some important issues in the definition of your decision—taking into account a clear risk, for example—you'll have more solutions to consider. As a result, your decision-making will be easier, but with questionable success. If you load your objective with irrelevant issues (which I call false constraints), your decision-making will be easier, because you will have only a couple of options to consider, but you are likely to select a faulty path.
In over a quarter of cases, decision makers that I interviewed had issues with missing or false constraints. Identifying a missing constraint or removing a false one from consideration makes a decision clearer.
Key Point
Identifying and defining relevant constraints is a major step toward making a clear decision.
Defining clear constraints is an issue with decision makers in small and large companies. Data from interviews suggests that, as a matter of routine, small company executives do not clearly define objectives, not to mention constraints. Decision makers in large companies, due to a better-developed decision support infrastructure, usually have a main objective clearly formulated by the team designated to propose a solution to a particular business issue. However, this does not necessarily apply to constraints. The team might be unaware of other efforts in the company, for example, or a strategic direction that a CEO wants to implement in the future that can have a bearing on the decision. Thus, constraints usually are not clearly defined.
Typically, decision makers include only one or two obvious sub- objectives as constraints in their decision definition. These sub-objectives are usually the result of the process of clarifying the decision objective. Deeper issues get missed. Knowing how to identify and properly define constraints can be a major stumbling block to clarity.
Key Point
Effective executives know that the most important decision constraints come from areas of concern, risk, difficulty, or disagreement related to a decision in addition to subobjectives.
Consider Brenda's example.
Brenda could list only one constraint that was a clear subobjective for the decision. Her feeling was that she was missing something, but she was not sure what that was.
The following are five common traps that you should avoid in identifying and defining your decision constraints.
In our discussion with Brenda after she developed the decision definition presented in Example 7-1, a number of issues came out.
Brenda is new to the company. She is concerned about how people will react to the sweeping quality effort. Her company does not have well documented processes or clear metrics, especially in the area of working with customers. She is concerned that an effort to force metrics on everyone from the top down could come as a big culture shock and thus fail in the long run.
She is also concerned about the availability of managers who can lead and execute this initiative. She knows how much effort this initiative can consume, having worked for a company with a well-developed quality effort. She realizes that a whole new organization will need to be built in order to make it happen.
I asked Brenda to write down her concerns. Here is her list:
I am concerned about the acceptance of the proposed initiative by the company.
I am worried about the push-back related to metrics.
I am not sure that we can execute. How long would it take us to put together an organization that will drive this effort?
These types of concerns make a decision difficult. More importantly, if not addressed in the eventual solution, they can serve as barriers to a successful implementation.
Lesson #1 | Focus on concerns related to your decision! Concerns qualify as constraints. A good decision has to address them! |
Asking yourself the simple question “Why is this decision difficult for me?” will identify some of the concerns you should take into account.
You might have noticed a general principle that when you focus on something negative in your thoughts, the amount of negative feedback from your environment increases. As a result, your thoughts may become even more negative, and you are quickly on a downward slope to a much more negative experience. The negative issue can be related to your or someone else's behavior, or something in your environment or your job, for example.
It's the same with constraints. Negative formulation tends to get your mind thinking in the same negative way. By their nature, concerns are formulated negatively. Reformulating them in a positive way shifts your mind into a constructive and creative mode of searching for a solution to address these constraints.
Lesson #2 | Formulate constraints as objectives to overcome the concerns they are based on. Make sure that you use an action verb in defining an objective, such as satisfy, improve, address, generate, or enable. |
Let's use Brenda's concerns to demonstrate this conversion. The first two concerns are similar, so Brenda combined them into one concern. Here is her resulting concern list:
I am concerned about the acceptance of the proposed quality initiative by the company, especially metrics.
I am not sure that we can execute. How long would it take us to put together an organization that will drive this effort?
She converts the first concern into the following constraint:
Constraint based on Concern a: Gain acceptance of the proposed quality initiative by major stakeholders in the company, especially metrics.
Similarly, she converts the second concern into a constructive constraint or subobjective:
Constraint based on Concern b: Build the team to execute.
Here is Brenda's resulting decision definition incorporating the objective, the obvious subobjective that she identified initially, and newly identified constraints. A graphical representation is shown in Figure 7-1.
“Objective: What is the best way to achieve higher growth through using quality processes as a competitive weapon
provided that we can
If these parameters are so important, why do we routinely miss them? It is because they are built into our environment or personal style to such an extent that we do not notice them. Usually, these concerns are vague and manifest themselves as uneasiness about the decision. They frequently surface in a discussion about the decision, generally as a result of direct questions by a third party probing specific areas of concern.
The following are several areas of concern that we commonly overlook. During interviews, I routinely asked decision makers to consider the following specific areas with an objective to identify missing issues related to the decision.
In their seminal work Decision Making at the Top: The Shaping of Strategic Direction[2], Gordon Donaldson and Jay Lorsch examined the process of how companies arrive at their goals. They worked with 12 companies that were major forces in their respective industries at that time. They found that each firm had a set of unique beliefs, or corporate culture, usually based on the founders' beliefs, which influenced decision-making in the company. These beliefs drastically impact the establishment of internal management systems, goals, and means to achieve them.
Donaldson and Lorsch noted that
A company's historical belief system, or culture, acts as a powerful constraint on every decision.
Decision makers themselves have difficulty in identifying beliefs due to their personal adherence to these beliefs.
If such beliefs are not made explicit, they can serve as powerful barriers to new ideas—you are likely to stay “in the cultural box.” Or, on the other side of the spectrum, your decision might conflict with these powerful beliefs. If you are unaware of this fact, your solution might not work within the current culture.
Notice that the first two concerns on Brenda's initial list are related to cultural issues.
Lesson #3 | Make cultural beliefs relevant to your decision explicit in your decision definition, removing the potential for them to become barriers to new strategies and solutions. Identify cultural beliefs that conflict with your decision, and list them as concerns. |
Ed Schein in his book The Corporate Culture Survival Guide[3] recommends performing a “culture audit” in order for the company to be aware of its unwritten rules and take them into account in decision-making. However, this is not a common practice, especially in smaller companies.
Another way to better understand your company's corporate culture is to contemplate the following questions in the Clarity State that probe your company's beliefs about strategy-setting, risk, and self-sufficiency. Be creative; compare your decision to other areas of the company's innate beliefs.
What habits does my company have for achieving objectives? Is my decision congruent with these means?
For example, if one of your company's beliefs is “innovate in bite sizes,” and you are trying to develop a full line of new products that are intended to be disruptive in the market, you should be aware of this fact.
How does my company handle risk? Is the risk involved in my decision higher or lower than my company's risk tolerance level?
For example, your company's belief may be “stick with major technological breakthroughs,” and you are trying to be incremental and not technically innovative in your decision approach. Or, on the contrary, your decision recommends an action path with a higher degree of risk than your company normally accepts. As a result, your solution may not be appropriate in your company's culture.
What are the company's behaviors regarding how problems are handled? Is my decision congruent with them?
For example, if your company believes “never buy market share” and you are including price decrease in your decision, beware.
To be fair, it's not the case that decision makers do not think about properly staffing new efforts. We do, but in our drive to move forward, we don't necessarily think about it in depth. We often assume that resources are available for the implementation.
In the course of my work with decision makers, there were several situations when leaders remembered encountering resistance from their teams in relation to a strategic initiative they were contemplating. The resistance, as it later turned out, was a team's way to communicate to the leader that they were “swamped” and could not successfully handle yet another cross-company effort at that time.
Another mistake is common in the current “stretched thin” corporate environment. A company sometimes assumes that a manager who has demonstrated great results in the past can be asked to lead the new effort without giving too much thought to the time needed in transition. The manager needs enough time to ensure that the prior effort he or she was managing continues to perform well.
Obviously, assessing the company's ability to execute a proposed solution is a subjective matter, and at the end of the day, the leader's opinion is the decisive one. And, obviously, if you listen to naysayers too much, no “ahead of the pack” strategies would be ever executed. It is a delicate balance.
However, when red flags are raised, you should contemplate this area of concern in more depth. In his autobiography[4], Jack Welch recounts his decision to acquire Kidder Peabody, one of Wall Street's oldest investment banking firms, as the “worst nightmare” and “a terrible mistake.” Three finance-savvy board members were against the acquisition. Welch thought about the raised concerns but was too focused on the benefits of the deal to really take the concerns into account. He decided to proceed and convinced the board to unanimously go his way. Subsequently discovered issues made the acquisition experience painful for Welch and GE.
Lesson #3a | Check your decision against commonly overlooked areas of concern to identify missing factors. |
We are sure to be losers when we quarrel with ourselves; it is a civil war, and in all such contentions, triumphs are defeat. | ||
| --Charles Caleb Colton[5] | ||
In my discussions with decision makers, there were a number of situations when a leader was rationally convinced about the rightness of a certain path but was reluctant to move forward. The gut was saying one thing, but the rational mind said another.
I strongly believe that such instinctive messages need to be listened to and made explicit as much as possible. I am not advocating taking action based totally on instinct, even though it does make sense in rare situations, but rather recognizing the internal resistance and taking time to uncover the reasons behind it.
It is rare when a decision needs to be made immediately. There is usually time to “soak on it,” as Linn Draper, the former CEO of AEP, says—a practice that is now adopted by many of his current and former subordinates[6].
Lesson #4a | If you feel uneasy about a decision, spend time in detecting the cause. Identify and include the cause in your decision definition. |
One way to gain clarity about an internal concern is to focus on this area of discomfort or fogginess to the exclusion of all other thoughts in the Clarity State. When you focus on this vagueness, putting words to it, trying out different thoughts about it, you will finally find a viewpoint that clicks. Once you find that viewpoint, you have clarity about the issue, and you resolve your internal conflict.
Our perception is also colored by what we expect to see (such influences are called cognitive factors) and what we want to see. Factors that deal with hopes, desires, and emotional attachments are known as “motivational” factors. These include our need to view ourselves in a positive manner, the tendency to view events in a way we would like to see them turn out, and the desire to avoid regret, among others.
Lesson #4b | Identify and include your motivations and expectations in your decision definition. |
Ask yourself the following key questions in the Clarity State in order to discover cognitive and motivational factors:
Am I motivated to see things in a certain way?
What expectations do I bring into the situation?
Am I afraid that I will regret having pushed myself to an unconventional solution?
People are known to distort their judgment to avoid regret. People experience greater regret when they choose an action that deviates from the norm and turns out poorly because they can easily imagine a much better outcome of a more conventional choice.
Emotions associated with the situation related to a decision can serve as good indicators of concerns present but not accounted for in a decision definition. We will discuss ways of identifying concerns behind emotions and incorporating them as constraints later in the book.
Disagreement within the team or with the board, for example, can make a decision difficult, as many decision makers commented during interviews. In cases when disagreement accompanies a decision, I've found it effective to incorporate these areas of disagreement as constraints into the decision definition. Taking these areas into account allows the whole team to focus on creative solutions, the process that eventually results in resolving the disagreement. More on this topic appears in Chapter 9, “Pick a Fight!—How to Get the Most Out of Clashing Opinions.”
Lesson #4c | Identify and include concerns related to emotions and disagreements in the decision definition. |
Mike Armstrong, a former CEO of AT&T and Chairman of Comcast, shared with me that based on his years of decision-making and reflection on these decisions, one of the major traps in decision-making is wrong or biased assumptions. This is where perceived or false constraints typically come from.
“Never assume” is a well-known adage. The problem, of course, is that, like cultural beliefs, when you are under the spell of an assumption, you rarely know it[7]. The presence of this false assumption might be limiting your view and your options. Often, when you make an assumption explicit, you can develop a strategy that is creative and non-obvious, as the following example demonstrates.
Experienced CEOs suggest building a routine of assumption checking into the decision-making process, especially when a critical business decision is involved. They suggest having discussions with team members or outsiders for the purpose of identifying assumptions and biases behind the decision.
Lesson #5 | List your and other people's assumptions related to the decision. Check them for validity in the current environment. Remove perceived constraints from your decision definition that are based on false assumptions. |
Clarity State is useful in identifying assumptions. Answer the following questions in the Clarity State that probe into the bases behind your decision.
Are you using any “rules of thumb” in your decision?
What major pieces of information are you using in this decision? How readily is this information available? How old is it?
What main facts (about the market, product, and so on) are you using in this decision? How old are these facts? Have they been checked recently?
Do you have a strong opinion about the situation related to your decision? What is it? What is it based on? Is it an assumption?
Be creative. You are checking your decision against common behaviors of overconfidence in judgment (failing to collect key factual information because you are too sure of your assumptions and opinions) and shortsighted shortcuts (relying inappropriately on “rules of thumb” such as implicitly trusting the most readily available information or anchoring too much on convenient facts).
We will work further with the assumptions on your list in Chapter 11, “Becoming a Frame Artist—How to Master Clarity of Perspective.”
In summary, the process of clarifying constraints consists of ways to identify them and then convert them into positive subobjectives to overcome concerns and disagreements, deal with risks, and address emotions.
The changing of a vague difficulty into a specific, concrete form is a very essential element of effective decision-making.
Compile a list of concerns.
List easily identifiable concerns by asking “Why is this decision difficult for me?”
Review commonly overlooked areas of concern for missing factors.
Identify emotional, motivational, and other concerns.
Convert each concern into an objective to overcome the concern.
Make sure to use an action verb in defining an objective, such as satisfy, improve, address, generate, or enable.
Tie decision constraints to the decision objective with “provided that I/we can…”
Let's use the following example to demonstrate the process of putting together a decision map consisting of all the elements, objectives, constraints, and solution options.
Both concerns are valid. How should Lin structure a decision definition to take them into account?
Lin works on creating the decision definition by following the rules for identifying the main objective. He starts with the decision question and asks himself “Why is it important?” until he gets to the fundamental reason behind his decision. His decision question is “What is the best IT system for us?” One of the reasons for doing this is to achieve tight integration with customer processes. He says, “It is important for us because we want to beat everyone else and be able to do it first—we'll get a great differentiation in the market! And this is exciting because we will be able to grow much faster than everyone else.” Having gone through this reasoning, Lin decides that the fundamental reason behind his decision is the company's accelerated growth. He now combines this high-level objective with the decision question, and his objective is now clearly defined: “What is the best IT system to accelerate the business growth?”
This main objective has left out one major parameter by which Lin's company will evaluate the effectiveness of this new IT system—namely, the ability to integrate with customers. His team needs to make sure that the integration capabilities can differentiate the company in the marketplace. So, he adds this main parameter to the decision definition as a constraint or a subobjective: “Obtain differentiation through customer integration.”
Lin has specific areas in mind for the customer integration, which he notes in the success factors:
Immediate visibility of the customer's shipping needs directly from the customer's systems.
All documentation handled electronically.
Ability for customers to easily adjust/schedule shipments online.
Online visibility of accurate, frequently updated (every half hour) schedules and committed deliveries open to customers and us.
Now he can work on the concerns raised by his team members. The first concern imposes a financial constraint on the objective, and the second forces the company to define the level of acceptable risk as a result of the IT system conversion. In this case, Lin's objective or vision of making his business grow through integration with customers can be made more feasible if Lin constrains it with these two concerns that limit financial risk and guard against unsuccessful implementation. Besides, by adding these two concerns to the decision definition, it gives him a way to help bring the two objecting team members to his side.
Step 2 of the process of clarifying constraints calls for formulating concerns into subobjectives that overcome these concerns by utilizing an action verb. For example, in Lin's situation, one concern is that the system is too expensive. A related objective to address this concern can be worded as “Minimize financial investment.” The second constraint is “What if the new system doesn't work?” A related subobjective to address this concern can be worded as “Ensure successful implementation.”
As Lin goes through assumption checking, he realizes that there are two underlying assumptions behind this decision that might be wrong. First, in his excitement about the vision, he is assuming that his company is the only one that is thinking about such customer integration. Wrong! In the current Internet proliferation, all competitors are thinking about it! Second, he is assuming that his company knows what “differentiation” means in the current environment. However, he might be too short-term in his approach, thinking of immediate capabilities that can be provided but not thinking enough of differentiators for the future.
This realization makes Lin add another constraint to the decision definition: “Deliver the first capabilities in three months.” He also decides to get a team to focus on brainstorming and clarifying the definition of customer integration differentiation.
So, here is Lin's decision definition:
“Objective: What is the best IT system to accelerate business growth, provided that we can
Constraint 1. | Obtain differentiation through customer integration |
Constraint 2. | Minimize financial investment |
Constraint 3. | Ensure successful implementation |
Constraint 4. | Deliver the first capabilities in three months?” |
A good test of whether a decision definition captures your intent in making this decision is to ask yourself: “If I select a solution that addresses all these parameters (the objective and constraints), will I be satisfied and happy with my decision?” If the answer is yes, you have created a good decision definition. In Lin's case, he decided that he would be satisfied if his team found an IT system that allowed tight customer integration, came within the set budget, and was installed successfully and quickly in the business. Obviously, this is a lot to ask, but he was confident in his team's ability to deliver.
Represented graphically, Lin's decision definition appears in Figure 7-2.
Now, in order to complete the decision map for Lin's decision, let's add solution options to the same chart.
His team is considering three solution options for an IT system:
Buy a new system from Vendor 1. The considered system has good customer integration functionality. The drawback of this system, however, is that it does not support some important business functions that are currently supported by the homegrown IT system.
Upgrade the current IT system. It was developed in-house 10 years ago. The technology is outdated, and the system does not support the envisioned customer integration functions. However, the system works very well for all other aspects of the business. Hence, it is possible to put together a technical team and add the needed functionality to the current system.
Bring in an IT system from a sister company. Lin's company belongs to a conglomerate consisting of seven businesses, distinctly different from each other. The team believes that an IT system from one of the sister companies might work for their business due to the fact that the business models are similar. However, the team needs to “dig” into the details before confirming this hypothesis.
Figure 7-3 shows a complete decision map of Lin's decision.
The solution is always simple—after you know what it is. | ||
| --Anonymous | ||
In working with decision makers on their current decisions, they usually did not have a problem identifying solution options related to a decision. However, I encountered several cases where solution options were limited and none of them could satisfy the stated objectives and constraints.
It was also the case that many decision makers developed new options, often by combining existing ones, while contemplating the decision in the Clarity State.
The following is a list of best practices that can help you expand your list of solutions. It is based on advice from negotiation experts who are skilled at developing creative solution options and input from experienced decision makers.
The process is simple. Usually, an option has a feature that makes it good. However, that solution might not satisfy other parameters. Focus on the good feature and generalize it into an approach behind this feature. Think about other options that are the application of the same general approach to your problem.
For example, Option 1 in Lin's earlier example is to purchase an IT system from Vendor 1. The good feature of this solution is that the system has good customer integration functionality. However, it does not support other parts of the business as well as the existing system does. Going with this option will address the current need for customer integration capabilities but might jeopardize support for other parts of the business—a dangerous route. One generalization that can be developed from focusing on the good feature of this option is to look for systems that will only support the customer integration needs. This approach will result in an additional option of “Purchase only modules supporting customer integration capabilities that can be added to the existing system.”
Another method of generating additional options is to look at the situation through the eyes of experts. For example, if you are faced with Lin's problem described previously, invent options for a technical person who will be involved in the installation of the new system, an outside consultant, a CFO, various internal users, a market analyst, a logistics expert, and so on.
It is also useful to look at the process of problem definition and analysis through the eyes of an expert rather than just generating solutions options. In this case, imagine that you are a certain type of expert, and go through the following steps:
Define the problem—. What's wrong? What are the current symptoms? What are the “dislike” factors, contrasted with a preferred situation?
Analysis—. Diagnose the problem, sort symptoms into categories that suggest causes of the problem, observe what is lacking, and note barriers to resolving the problem.
Approaches—. What are possible strategies, prescriptions, or theoretical cures to address this problem? Generate broad ideas about what can be done.
Action ideas—. What might be done? What specific action can be taken to deal with the problem?
A decision map is a representation of a decision at a certain level of detail chosen by the decision maker. Sometimes, this level of detail is inadequate for developing the right solution; it's either too high or too low. Going deeper into the details of one particular aspect of the decision (one of the constraints, for example) may generate more options.
In Lin's decision, if he needed more options about ensuring successful implementation, he could build a decision map focused on this subobjective, generate options satisfying that subobjective, and then raise these options to the level of the decision that we have defined in this chapter. This technique of decision layering is discussed in detail in Appendix B, “Additional Tips on Reducing Decision Complexity.”
This is an exercise to invent stronger or weaker versions of existing options along parameters relevant to the decision. Even though it is a good exercise at the time of the decision map creation, it is more effective when done from the perspective of satisfying constraints, as discussed in Chapter 11.
In this exercise, you consider varying not only the strength of the solutions but also their scope. For example, you can break your problem into smaller and more manageable units. Solutions may be partial, may apply to only certain geographic areas, or may remain in effect for only a limited period of time.