Why we make poor decisions
Why we make poor decisions – Paul J Whitehouse
A talk recently delivered to the Maveric/Majestic small business “Coffee Groups”
During the last twenty odd years I realise that good decision-making is best done as a “social activity”, it makes the most of those involved, aligns thinking and synthesises brain power. This invariably results in a better quality decision. So what stops us?
1. Ourselves + our environment
Often our biggest enemy is our ego, that same ego we needed to start and maintain our businesses can now prevent openness of mind. Our businesses thrive on our skills and this “knowledge” is a result of our experiences & learning, both historical, so we need to have the radar active, not (always) have an attitude of “my way or the highway”.
Perhaps we are sometimes too judgemental; this useful adjunct to any business can prevent us from “hearing & seeing” things!
Our values, needs, spirituality, social links will all impact on the way we make decisions as well as the change pressures around us. Change will be in two forms, that requiring; doing what you do “better & smarter” & the second requiring you to do what you do “differently”.
How good a listener are you? On a scale of 1(poor) to 10 (great), men must ask their partners.
With all this said, human beings have difficulty changing; invariably crisis causes change, to change ahead of necessity is rare and requires much deliberation, a process such as Value Management can support.
If you to know yourself well enough, you can see the “gaps” in your environment, and know what you need to do to “plug” them. Don’t “collect” similar thinkers around you; go out of your way to get different viewpoints (Johari Window). Truth is a perception. Paradigms will influence the way we see things.
“Your paradigm is so intrinsic to your mental process that you are hardly aware of its existence, until you try to communicate with someone with a different paradigm”
Donella Meadows (1941 – 2001) The Global Citizen
2. Others
Male & Female think and process information differently, duh! “Does my bum look big in this” does not require decision thinking! Not unless you are a retired Kamikaze pilot. (Need for acceptance?)
Gender differences can be used to benefit, on average most females have natural intuition, and they will invariably present a different viewpoint
Humans require recognition – the opposite of love? It is of course indifference; love & hate are both energies, one positive one negative, indifference in nothingness!
The best way I have observed it to get to a point in your business (life) where you celebrate differences, not berate them.
3. The methodology
Einstein was once asked: If he were given an hour to solve a problem upon which his life depended how would he spend that hour. His response was:
40 minutes gathering information
15 minutes reviewing that information
5 minutes to make the decision
Is that how we normally operate?
Usually I find people make the decision in the first 5 minutes then take the other 55 to justify it!
So we are not usually in our culture looking at a “natural” reaction, the East make decisions more akin to Einstein’s response.
So for us plebs we need a bit of process to assist.
4. Process steps
1. State the Purpose: why we need to do anything! Knowing the Purpose you can then select the “right” participants.
2. List the Issues: begin capturing all relevant information
3. Objective statement: develop – this is where we want to get to – by when
4. Results to Achieve build the list, these address all the Issues
5. Objective Matrix complete the remaining three quadrants, Results to Prevent, Available Resources & Constraints
6. List Functions using Verb-Noun construction – from the Results to Achieve list
The function of a Paper Shredder is Ensure Confidentiality or Protect Secrets, the function of a Pen or Pencil is to Make Marks – note the use of 1 verb & 1 noun.
If you cannot describe something using a verb & noun you don’t understand it!
Value = Function
Cost
7. Prioritise Functions apply Numerical Evaluation
8. Creativity apply to Causal Functions
9. Evaluate Solutions & ideas generated
10. List Actions what gets done, by when & by whom
The Johari Window – aim to get the Arena bigger (see respective article) – share, talk, give your view & then listen, carefully, attentively.
Benefits of Value Management
1. De-emotionalises
2. Develops common Objectives
3. Develops common focus
4. Develops commitment
5. Promotes participation
6. Integrates logical with lateral thinking
7. Encourages holism
8. Changes problems to opportunities
9. Builds Teams
10. Creates cost awareness
11. Shares perceptions
12. Improves personal thinking skills
13. Has total application flexibility
Feelings always influence & often control decisions – Larry Miles (Father of Value Engineering)