Saturday, May 25, 2013

Seven Reasons Why Decision Making is so Hard

Go for the 70% rule: 70% assuredness, 70% confidence, 70% due diligence, 70% consensus.

Both business and world become over-complex than ever, making decision right are both art and science. The biggest mistake some people make is limiting the definition of "decision making" to the decision itself. The definition should include the entire process including understanding the need, engaging key stakeholders, ensuring effective communication, assessing alternatives, developing consensus, planning, communicating, executing, and following up on the decision making. In other words, decision-making is a process, not an event. Decision making is an art only until the person understands the science (process, analytics. etc)


1. Decision making is hard when Unsure of Priorities

It's very hard for people to make hard decisions because they do not take the time to think about what they believe, or what they stand for... You can't make up your mind because you are not fully committed to what you believe and in what you know to be right. Decisions are not hard for those who have taken the time to establish their values and what they believe.

A decision is arguably a choice between two or more options. The greater majority of these options are circumstantially provided. Even with the best systems and processes, there are no guarantees that you will take good decisions, indeed the fact that something requires a decision will mean that there will be a bunch of associated risks to manage. That’s why the true leaders are born with the passionate thought process, walk the talk and demonstrate the habitat by energizing the team. A real leadership decision is an outcome of providing solution as a consultative demonstrator rather than destructive dictator

2. Fear of Failure

Decisions can have Unexpected & Unintended consequences. The strongest impediment to decision making is fear. Fear of making the wrong choice, if you make a bad decision or things just turn out badly. The second thing is nothing is in a vacuum, decision makers have to realize that a decision may well impact other decisions already made or people in unexpected ways. Proper preparations and dissemination of information are part of the due diligence in making decisions. 

Indecision is based on fear of failure. When the "stakes are high" and "failure is not an option,", leaders become afraid to "do the right thing" or fail "to seek to understand” before being understood." This is a reflection of a leader falling back on being a manager and ensuring everything runs right regardless of how circumstances impact anyone else. Decision making becomes immediately easier when leaders remember the following:
1). The best outcome is to make a good decision in a timely manner.
2). The second best outcome is to make a poor decision in a timely manner, find out that you're on the wrong path, correct it and move on.
3). The worst outcome is to make no decision or to delay the decision to the point of ineffectiveness.

3. The Pressure Involved

Taking a decision means taking ownership, thus exposing you to possible criticism, and people would like to avoid as much as possible being in that place. The pressure involved, which nobody likes and everyone stays away from it if given the chance. The real issue that you might consider addressing is the percentage of bad decisions that are made. That, of course, is closely followed by the second significant issue, why do good leaders make bad decisions. It is not that they are not capable of making decisions, but it's the cultural environment they are in, which makes a firm commitment to a goal, target or action politically risky. Avoiding or delaying decision making is in itself a decision - and very few people take into account its impact. There are two fundamental reasons why decision making is so difficult for leaders
1) They are afraid of repercussions not necessarily related to the "wrong" decision
2) They do not want to accept responsibility for the decision if it is the "wrong" decision.

4. Identify the Source of Bias

The decision complexity lies in the type of decision and the role of the person playing in his/her domestic or professional grounds. If you study this process, you will find that leaders make decisions largely through unconscious processes that neuroscientists call pattern recognition and emotional tagging. These processes usually make quick, effective decisions, but they can be distorted by self-interest, emotional attachments, or misleading memories. A good decision needs to use both intuitive mind and rational analysis.

The paradox of decision is that sometimes you have to sacrifice to save and sometimes you have to disable one thing to enable another. Decision-making is an ability that is learned or unlearned and can swing both ways (making decisions or avoiding) depending mostly on upbringing and cultural circumstances. Often challenges are: 
  • When the options are too close to each other in similarity 
  • The outcome of each option is either unclear or undesirable
  • The circumstances leave no visible options. 

5. Resource Awareness

Any decision made needs to be applicable in a timely manner. This requires resource awareness. Resource limitations are significant and decision makers who are not cognoscente of what they can or cannot do will always make a bad decision. 

The lack of clarity usually surrounds the context of the decision to be taken. Nothing is clear or concise. At the strategic level, therefore, the decision is not about good verse bad outcomes - they can be taken by lots of people; frequently it is about making a decision that has 'less bad' outcomes.  In other words, it takes the least harmful decision within a multi-complex environment. The decision is therefore directly connected to the impact on employees and business outcomes.

6. Information is Key

The best solution is a combination or analytical/logical thinking up front, that is, to make sure you're including the right information and looking at all the possible options, then, to select the best decision. The issue is that decision makers sometimes do not know where to get the information needed to support or disprove propositions.

Go for the 70% rule: 70% assuredness, 70% confidence, 70% due diligence, 70% consensus. The more important the decision, the more you need to have all the data, perform all the preparation, an increase of confidence of success but the search for perfection is the enemy of decision-making. The more perfection you seek, the more you risk falling into the trap of analysis paralysis. The figure of 70% is not absolute and is only a metaphor for setting a level at which you feel you can take your decision as a calculated risk.

7.  Situation Awareness 

Under these conditions, the determinant factor is the decision maker’s situational awareness. If (you or anyone) are unclear to the conditions or the goals or how the conditions affect the goals, then decision making becomes a problem. People don't want to try anything out of the box because they want to be in comfort zone. A comfort zone can't give a rational decision. A good decision maker should follow process and delegate responsibility according to skills.

The decision making is situational. The process of decision making and even the decision may differ in a different situation. The clear leadership issue is how well and at times how fast, the leader understands the situation and connects with - 'as it is'. Decision making is hard for many people because:
a. They are not clear about the desired outcome
b. They are not clear about where they are in the situation currently
c. They have not defined the gap between the current situation and the desired outcome
d. Organizational dynamics- conflict, politics, etc.
e. Fear of making the wrong decision, which comes from not being prepared to make good decisions.

 Evidence-Based Decision Making (EBDM). The concept can really be used by one person teams all the way up to Large Organizations. Obviously, the more robust the associated data, the richer the process can become. Yet sometimes too much data can be a handicap. The simpler the process, the better for decision making. Be cautious of paralysis from over-analysis
1). Define the problem
2). Develop alternative solutions
3). Evaluate the alternatives
4). Choose an alternative
5). Implement the alternative 

Whether it's in life or in professions...Professionally if you have sound knowledge complimented with good experience, common sense and better judgment of situation, then decision making is not so hard.









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