Thursday, June 25, 2015

How to Frame the Right Questions for Decision Making

The company's leadership plays a major role in framing the right questions for decision making.

One of the most important tasks for management is to make decisions. However, across the sectors, many business leaders fail to make effective decisions or part of problems is that they frame the wrong question; which means they intend to do things right before doing the right things’ or they try to figure out the ‘HOW,” instead of digging through “WHY” first. So first things first, how to frame the right questions for decision making?

The company's leadership plays a major role in framing the right questions for decision making. The role as leaders needs to incorporate process before its reflection on how people are thinking about what they're trying to accomplish. The role as leaders is to put people in a position to succeed, and success is doing the best that is capable. An outcome may not occur to one's liking. However, a process that provides insight can help one do the best that is capable. The approach is to offer people a consistent process that enables them to access relevant information to inform the decision, weigh up the alternatives, and develop the insights that guide their final decision. It may not always be the decision they hoped for, but it aligns with the capabilities and is clearly reasoned. The leader as the overall specialist is more likely to fail because they frame the decision just from their own perspective, instead of encouraging engagement and involvement of key players who hold relevant knowledge. So the great leaders are surrounding themselves with specialists and seeing their own specialism as that of 'leading,' which critically involves identifying the people who can contribute to framing the decision, and then procure the resources for that decision to be enacted.

Technology is the means to the end, not the end. It is important to have a process that provides useful - relevant and reliable - information. The act of providing is tied to the act of accessing. Getting back to the process, technology is very important in organizing data within transactions. The technology does not ever 'make the decision,' but provides decision makers with perspectives and concurrent comparative assessment way better than they could ever do in the previous more 'manual' approach. This still requires insightful thinking and challenging the status quo, but it is so much more effective being able to visualize all perspectives and trade-offs prior to making decisions.

Part of the problem has to do with how you frame the question. Inappropriate framing is being the root cause of most bad decisions. It’s also due to the lack of inquisitive minds. People need to ask questions. The thinking approach being used is informed at some level on subjective, intuitive sources of information, but it was calibrated and employed in the structured guiding process that got everyone to slow down and think through the implications of their intuitive, subjective assumptions. Regarding not having time to stop and think in a crisis, this is one place where different styles of thinking make a difference. Some people think best when they can jump into a situation and sort it out when they are in there. That kind of situation is well served with a pragmatic intuitive kind of thinking. Those who are more systemic thinkers, however, often either freeze in that kind of situation or make an impulsively off-base decision, mainly because they need to match the situation against what they expect and their expectations are usually violated in those chaotic or crisis situations. So sharing ideas, questioning, ‘what if's are all good tools, that will help frame the right problem.

Tune organizational structure to enable better decision-making scenario: Imagine creating a matrix with the RAEW categories on the horizontal axis and key processes or decision points on the vertical. It provides a simple and quick tool for identifying potential misalignments in the organization structure. One nifty technique to audit the organizational structure (how it organizes its resources to do work) is the RAEW analysis:
R=Roles and Responsibilities
A=Authority (to make decisions/allocate resources)
E=Expertise, knowledge, and skills to do work
W=Work tasks

So the proper framing, probabilistic reasoning, sensitivity analysis, and value of information and value of control are integrated techniques: They are very powerful tools to help managers think more critically about the decisions they make. Asking managers "What decisions do you make?" But rephrasing the question, try asking them what steps in the process they have to approve, or how they decide which product to invent/fund/support/ market. Ask them how they choose their vendors. Ask them how what was a difficult decision in the past. Keep mixing up the questions until you get one that seems to "trigger" the kind of answer you're looking for. Decision-making attitude should be incorporated into the company’s culture (by letting know the employees that they have every right to take decisions that would improve the business process.). Another element to the process of framing a strategic decision is measurement. Having measurements can provide feedback on tactical as well as key decisions. The feedback can also provide opportunities to change tactics or even strategy.

Decision making takes a multidisciplinary approach, frame the right questions before answering them. It has a combination of 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.


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