Wednesday, May 19, 2021

Integrating decision logic

One significant effect of digitization is increased velocity, complexity, unpredictability, and a need for a faster response to changes in business and industry based on effective and efficient decision making.

In the world where change is significantly speeding up, business leaders couldn’t predict the future with a certain degree of accuracy. Decision-making is difficult due to varying reasons such as uncertainty and ambiguity of business circumstances, fear of failures, unsure about priority, unconscious bias, lack of knowledge or profound thinking process, etc. Thus, it’s crucial to take logical steps in achieving decision smartness.

Study the situation: The more complex the situation is, the more different approaches and role gaming is needed to reach for understanding. If you understand the origin of the situation, where you want it to go, and how to get there, you would understand the specific WHYs to dig through the root causes. The insight of the situation requires in-depth understanding. It’s about the understanding of one´s possibilities, adversaries, environment effects and other stakeholders’ behavior. Too often people may take the easy path, think and work at a superficial level rather than spend the time to understand what is going on underneath. Insight is an understanding of cause and effect based on the identification of relationships and behaviors within a model, context, or scenario; being able to identify the root cause of a problem or the core issues of a situation which leads to understanding and resolution.

Cognitively, people are often at the center of the problem. Diagnosing the problem from the mindset level is the critical step for digging into the root causes of many problems today. The more complex the situation is, the more important it is to leverage multidimensional thought processes to see underneath the symptoms and dig into root causes of the problem and see around corners without ignoring some pieces of important information, gain sufficient knowledge and unique insight to observe deeper and see around the corner, have an in-depth understanding of cause and effect based on the identification of relationships and behaviors within a model, context, or scenario, see around the corner, and transcend the interdisciplinary knowledge to get to the heart of the matter.

Ask questions: With “VUCA” digital new normal, you become a leader or high professional when you are already comfortable and confident with questions. From a decision management perspective, asking the right questions helps to validate how thoroughly and deeply your team's thinking is on a particular issue as well as the psychology behind innovation. Effective leaders want to understand the issue, they will always ask questions to people around them, get views of everybody, learn about the subject when necessaryIt might be worth asking: What is the problem? Why? Is it the symptoms or the real issues? How am I looking at this? Is there another way/another understanding? How come things are the way they are? What seems to be the constraints? Which factors or aspects of the problem seem most critical? Where is the weakest link or the strongest constraint? Etc. And then, use their leadership qualities to resolve the situation or make decisions which would be appreciated by everybody.

Asking questions is a non offending way of making the point by understanding the point of view of another side. All good qualities of leadership require practice, some practical tools, as well as methodologies, practice asking questions and being quiet for a while, get input before providing opinions and listen before you speak. These can be used by leaders to get them into the practice of asking rather than answering. Then the more they ask, the better they get at it and the more refined they can make their questions. Intellectuals question the established order, involving a lot of mental "doing" = thinking, comparing, concluding, reasoning and planning. Smart people ask tough questions, get updated information and multiple perspectives about the problems, learn about the subject inside-out, and then apply their leadership qualities and skills to resolve the situation effectively. And even more importantly, it includes helping leaders trust the people they wish to lead and make an objective decision via the state, ask, decide, act approach.

Collect information: Information as input to the decision-making does not absolutely determine the decision but allows the decision-maker to exercise their judgment. This is exactly what is required for the decision to carry effective information. For decision-making to be effective, the decision-maker must have enough knowledge to make their decisions rich in information and significantly different from the available data. In the human context, information drives awareness, which can include all of these characteristics, uncertainty, surprise, difficulty, and entropy, although it can also trigger a sense of confidence, confirmation, validation, verification.

Willingness to acquire additional information begins with acceptance you do not know enough to achieve your purpose; you recognize a gap in the knowledge you have and value in closing the gap. Analytics has no value until they inform decisions, getting buy-in to the value of the information being provided, and developing plans to act specifically on that information. Both willing and able to acquire various types of information begin with an understanding of purpose; what is it we want to achieve? The abundance of information flow, click-away knowledge, and the more advanced digital technologies make it possible to gain real-time insight and business foresight if organizations are truly being digitized underneath, at the process level. It helps decision-makers at a different level of the organization to proactively leverage information, relevant & interdisciplinary knowledge and collective insight for making effective decisions in a scientific and consistent way.

Articulate logic: Many of today’s problems are complex, the assumption that there is a single cause to a "problem" in a complex adaptive system is unhelpful. You need to be looking for patterns rather than isolating causes. It might be a good idea to first split problems into different categories and to assess the relative importance of the different categories for them and what could be done about it. There are multiple, inter-related dynamics, you have to really dig beneath the superficial layer. In reality, people may have abundant experiences, but they do not know how to apply logic to frame the right questions or how their experiences relate to useful outcomes.

With an unprecedented level of uncertainty and complexity, management of any type is a complex interaction of many cognitive systems, to avoid being illogical or irrelevant, the nature of how the "implementation of the idea has to follow a logical path for the solution" may include devices such as pattern recognition. People can be rational. Being rational doesn’t mean taking linear logic only or ignoring intuition in decision making. We have a predisposition to seeking patterns, or potentially in the pursuit of logic. Digital leaders and professionals need to develop critical thinking skills for making logical reasoning and practicing multidisciplinary approaches to solve complex problems. Logic is the ability for examining inference via analyzing, evaluating, and producing coherent argumentation, finding common ground and initiating dialogues, and applying multifaceted logic to make effective decisions.

Fill out the biases or blind spots: At today’s “VUCA” digital new normal, there isn't always a right or wrong choice in any situation and there are a lot of grays, so blind spots in decision-making are perhaps inevitable. This makes it very hard to choose a right or wrong from your choices. To close blindspots, you have to be humble to realize there are many things you know you don’t know and perhaps even more which you don't know what you don't know. Until that happens, you will continue in the lives of blindness. Can you provide calm inquiry clearing the blind spots to help find out what is really happening? Continue to see the importance of dealing with blind spots by learning how to be quick to listen, slow to speak, and slow to anger. All these together adding up to quite a bit should really make you desire insight and squash arrogance to improve decision effectiveness.

Oftentimes, individuals have cognitive differences. Silo mentality, various non-critical thinking patterns, lack of insight or contextual intelligence, etc, lead to poor or inaccurate judgment, unconscious bias, illogical interpretations, poor decision-making, and then, further cause a series of issues cascaded into big problems and fatal business failures. In specific, there are all sorts of decision biases: Optimism bias is the tendency to believe, expect or hope that things will turn out well. Pessimism Bias is the tendency to believe that most things are likely to go wrong. Focalism Bias is a sort of systematic tendency describing the common human tendency relying too heavily on the first piece of information provided when making decisions. In a team or social setting, 'groupthink' can be extremely pervasive and a group's intuitive decision making should be taken with extreme caution. A great way to manage bias is to simply get it out in the open communication environment. In a collaborative decision, let individuals embrace their bias by sharing it with others in a non-threatening context. This can help to enable the "wisdom of crowds" as a source of improved decision-making. Try to eliminate all biases and you are likely to reduce the use of heuristics, and deal with bias + complacency before seeing a clear picture and arrive in a somewhat unbiased decision.

Perceive consequences: The lack of updated viable information, systematic understanding, clear logic is critical to the failure of, or consequences of a bad decision. A good process can still get adverse outcomes. All good processes do decrease the risk of the wrong choice, not eliminate it. The decision is not necessarily bad, but the flow and sequence of the subsidiary decision implementations all encounter a different set of context dynamics. This means being very clear about both internal factors, such as decision situation, context, relevant knowledge, organizational capability & resource, etc, as well as external factors such as technology factors, political and legal conditions, and competition and consumer demands, etc. It also means taking multiple perspectives into account, minimizing "agendas" or "spin," working through the decision process logic, reconciling differences and inconsistencies in data or sources, using a set of criteria for evaluating information and conclusions and considering unintended consequences. If the decision-making process is well designed and well executed, you have the highest probability of getting the best outcome in the state of knowledge accessible at the time of decision.

One significant effect of digitization is increased velocity, complexity, unpredictability, and a need for a faster response to changes in business and industry based on effective and efficient decision making. There are many variables in complex decision making, there are tradeoffs you have to leverage, and there is no magic formula to follow. Walkthrough “learn, ask, collect, articulate, fill out, perceive” stages for digital decision-making. The true wisdom leads to putting more thought into things and searching for flaws in decisions and that widens the possibility of coming up with alternative decisions. Decision maturity is based on the maturity of the decision maker to overcome bias, make iterative decision processes & planning, leverage both information and intuition, to not search for perfection, but improve decision effectiveness.

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