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Team Decision Making

The Management Pocketbooks Pocket Correspondence Course

This is part of an extended management course. You can dip into it, or follow the course from the start. If you do that, you may want a course notebook, for the exercises and any notes you want to make.


Managers often need to reach decisions as a part of a team; either as:

  • a member of a management team
  • a facilitator of their own team

In both cases, it will serve you well to understand some of the do’s and don’ts of team decision-making*.

Group Think

In the 1970s, the social psychologist Irving Janis examined how groups make decisions. He found that the group’s dynamic often inhibits exploration of alternatives. People find disagreement uncomfortable, so the group seeks consensus before it is properly ready. As the group approaches consensus, dissenting voices are rejected (and, indeed, often self-censored). Janis said:

‘Concurrence-seeking becomes so dominant in a cohesive group that it
tends to over-ride realistic appraisal of alternative courses of action.’

When we fall prey to Group Think, decisions tend to be based on ‘what we all know’ – members feel inhibited from challenging the consensus and relevant information, ideas, challenges are not fully introduced.

The group tends to a higher collective confidence in a decision than individuals have in the same decision made individually. Groups tend to endorse higher risk decisions than the individuals would – perhaps due to the degree of confidence resulting in group members agreeing to decisions that they would not make as individuals. This is called Risky Shift’.

Other features of Poor Group Decision-Making

People with more extreme positions are more likely than others to have clear arguments supporting their positions and are also most likely to voice them. This enhances risky shift.

The order in which people speak can also affect the course of a discussion. Earlier comments are more influential in framing the discussion and moulding opinions.

Once people have expressed an opinion in a group, it can be hard, psychologically, for them to change their mind.

Charismatic, authoritative and trusted individuals can also skew the debate around their perspectives – which will not always be objective or ‘right’.

Finally, it takes time for a group to discuss a topic and time is often at a premium. There will be pressure to curtail discussion and move to a decision.

Towards Better Group Decisions

  1. Start with a diverse team.
  2. Don’t let leaders, experts or charismatic individuals state their opinions or preference up front
  3. Start with a round robin of facts, data and evidence. Follow up with another round robin of comments, questions and interpretations of that evidence. This forms a solid base for discussions.
  4. If you must take a vote, put it off until after discussion and then ideally, do a secret ballot to establish the balance.
  5. Appoint a devil’s advocate to find flaws in data and arguments.
  6. Before a decision is finalised, ask everyone to take the position of a critical evaluator and look for errors, flaws and risks.
  7. Divide the team into subgroups to discuss the issues, and have them debate the decision.
  8. Invite outsiders into the team to create greater diversity of thinking and overcome prejudices and confirmation bias.
  9. Give all team members equal access to raw data, so they can reanalyse it for themselves.
  10. Facilitate the discussion to ensure every voice is heard and respected – even the least senior and least forceful members of the group. If they deserve their place in the group, consider their perspectives to be of equal value.

Further Reading 

  1. The Decision-making Pocketbook
  2. The Wisdom of Crowds

* Grammatical Note

To apostrophise do’s or not?

  • In favour of not apostrophising is that it is neither a contraction nor a possessive term, suggesting that there is no good grammatical reason for introducing an apostrophe
  • In favour of the apostrophe is the core function of punctuation to improve readability. The apostrophe stops it being dos and don’ts.

We sometimes forget that grammatical and punctuation ‘rules’ evolved to codify standard usages, but that language is fluid and grammar must serve the primary purpose of aiding communication.

By the way, you’ll see that I did not apostrophise 1970s.

If you think I should either have written dos, or found an alternative (thus subordinating words and meaning to style and correctness)… Sorry.

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Decision Making

The Management Pocketbooks Pocket Correspondence Course

This is part of an extended management course. You can dip into it, or follow the course from the start. If you do that, you may want a course notebook, for the exercises and any notes you want to make.


In understanding decision-making, there are three key things to focus on:

  1. Using a structured process
  2. The role of intuition, gut instinct and hunches
  3. The effects of bias and automatic thinking

Let’s look at each of these in turn.

Structured Decision Making Process

… like the example below.

Structured Decision Process

One of the most important choices in your decision process will be whether to go for an adversarial process of setting the options against one another – perhaps even having advocates for each, competing with one another to win the decision – or to go for a process of inquiry, learning as much as you can before assessing the options.

Intuition

Although Malcolm Gladwell received a lot of attention for his book Blink, his work leans heavily on the research by Gary Klein and his books, The Power of Intuition and the more technical Sources of Power are first rate.  Klein shows how, in domains that are very complex and in which you have extensive experience, your intuition can quickly get you to the right understanding, well ahead of your ability to explain why or how you reached the conclusion you did.  But, if you don’t have sufficient experience, then your hunches are likely to be wrong, due to the existence of…

Bias and Automatic Thinking

Two psychologists, Daniel Kahnemann and Amos Tversky, were responsible for overthrowing the crude assumption that economics is based on rational decisions.  In fact, they showed that many decisions are a result of automatic thinking and biases.  The automatic thinking is a short cut that works well in the domains in which humans evolved, but leads frequently to wrong answers in a modern world context.  An example is the ‘horns and halo effect’ and another is our bias towards noticing examples that confirm what we believe to be true, whilst being blind to counter examples.  Daniel Kahnemann wrote the wonderful ‘Thinking, Fast and Slow’ to summarise a life’s research and it is, without a doubt, one of the most important and stimulating reads of the last few years.

Further Reading

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Six times Four: More de Bono

Last week, I discussed Edward de Bono’s (or maybe his and others’) Six Thinking Hats.  In my blog title, I described his mind as fertile and that fertility led, step by step, from:

  1. Six Thinking Hats (1985) to:
  2. Six Action Shoes (1991)
  3. Six Value Medals (2005)
  4. Six Frames – for thinking about information (2008)

We’ve listed the six hats.  Let’s do the same for the others.  Whilst I own copies of Six Action Shoes and Six Value Medals, it was only in researching this blog that I learned about the newest book here, so I am indebted to Professor Tortoise for the primer in the Six Frames.

Six Action Shoes

Six Action Shoes - de Bono

Navy Formal Shoes
Represent formal routines, processes and procedures.

Grey Sneakers
Represent exploring, investigating and gathering information.

Brown Practical Brogues
Represent practical, pragmatic, roll-your-sleeves-up action.

Orange Gumboots
Represent safety-conscious activities and emergency action.

Pink Comfy Slippers
Represent caring, concerned, compassionate and sensitive action.

Purple Riding Boots
Represent leadership, authority and command.

Six Value Medals

Six Value Medals - de Bono

Gold Medal – Human Values
Values relating to putting people first.

Silver Medal – Organisational Values
Values relating to your organisation’s purpose.

Steel Medal – Quality Values
Values relating to your product, service or function.

Glass Medal  – Creativity Values
Values relating to creating, innovating and simplicity.

Wood Medal – Environmental Values
Values relating to sustainability and impact on the community and on society.

Brass Medal – Perceptual Values
Values relating to the way things appear.

Six Frames for Thinking

Six Thinking Frames - de Bono

Triangle Frame – Purpose
Understanding the information at hand – the What, the Why and the Where.

Circle Frame – Accuracy
Is the information consistent, accurate and adequate for our needs (to solve a problem or make a decision, for example)?

Square frame – Perspectives
We can look at information and a situation from different points of view, with different biases and prejudices.  Which ones are present?

Heart Frame – Interest
Focuses our attention on the relevant, salient, interesting information that matters most to you.

Diamond Frame – Value
How do we evaluate the value of our information?  We can use the six value medals to prioritise its importance.

Slab Frame – Conclusions
What does the information tell us and, crucially, what next?

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Three ways to get it wrong

imageIn last week’s post we discussed some of the decision-making traps that board members–or, indeed, any decision-making group–can fall into.

At the heart of our understanding of these biases is the work of Daniel Kahneman.  He was awarded the Nobel Prize for Economics for his work in this area, with co-worker Amos Tversky. in 2002.  Sadly Tversky died in 1996 and was ineligible for the prize, under Nobel rules.

Behavioural Economics

Daniel KahnemanKahneman is perhaps the leading psychologist in the field of behavioural economics – very much a field du jour.  His research was carried out with many collaborators including Paul Slovic, an expert in the field of perception of risk, and Richard Thaler, most notable for his use of the term “nudge” to describe how we can use perceptions to shift behaviour.

The classic paper that Kahneman and Tversky wrote was ‘Judgment under Uncertainty: Heuristics and Biases’, published in the Journal Science in September 1974.

Heuristic: A rule of thumb or simple procedure for reaching a decision or solving a problem.

In this article, they introduced three important heuristics, which guide many of our decisions – and frequently let us down.

Representativeness

We tend to believe a possible event is more likely when we can recognise it as a part of a familiar pattern.  It is as if we like to create stories about our world that follow standard arcs or plots (see for example Christopher Booker’s wonderfully argued The Seven Basic Plots: Why We Tell Stories.  If a potential event slips easily into one of these plots, we rate it as more likely than if the plot seems to need adjusting.

Availability

Recent salient examples render a possible event more likely in our minds than other events that do not trigger such easy recall.  Immediately after a rail accident, people fear rail travel more than normal and take to their cars.  The resulting spike in road deaths usually exceeds the immediate effects of the road accident.

Anchoring

We make estimates and decisions from a starting point and the point we choose can bias our estimate or decision.  Surprisingly, even an unrelated figure presented randomly can skew a later numerical estimate.

Kahneman won’t stand still

In 2007, Kahneman received the American Psychological Association’s Award for Outstanding Lifetime Contributions to Psychology and this year, he was included in Bloomberg 50 most influential people in global finance.  He says that all he knows about economics, he learned from co-workers like Richard Thaler.  He is a much sought-after speaker and commentator in the business arena, and you can find recent work documented on TED (see below), in an extended interview, and in two excellent articles on the websites of prominent global strategy consulting firms,McKinsey and Booz & Company:

Daniel Kahneman: The riddle of experience vs. memory

Using examples from vacations to colonoscopies, Kahneman reveals how our “experiencing selves” and our “remembering selves” perceive happiness, and why experience does not influence decisions, in this 2010 TED talk.

[youtube=http://www.youtube.com/watch?v=XgRlrBl-7Yg]
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Decision Failure

Young Apprentice candidate, Hannah RichardsIn episode 3 of the current series of Young Apprentice, the candidate Hannah Richards lost her place in the competition because of her poor decision making in the boardroom.

In Hannah’s case, she let personal loyalties and enmities over-ride good judgement, but this is not the only reason for failed boardroom decisions.  In fact there is a whole array of decision-making traps available to us.  Let’s look at a small sample:

1. The Anchoring Trap

In a discussion at a board meeting, if the first speaker has a strong opinion, they can sway the whole tone of the debate, focusing not on what is right, but on the extent to which the first speaker is right.  This “first speaker advantage” can lead to poor decisions, when the first speaker takes an extreme position.

2. The Confirming Evidence Trap

When a Board approaches a consensus view it will rarely discuss information that conflicts with this view, focusing rather on evidence that confirms it.

3. The Sunk Cost Trap

Board members invest a lot of political and social capital in key decisions that can make those decisions hard to reverse if the situation changes or new information comes to light.  Errors can be perpetuated and good money thrown after bad.

4. The Seduction of Appearances Trap

Beautifully and eloquently presented evidence often carries more weight than more robust but less attractively presented evidence.  This is one of the reasons why PowerPoint-style presentations are a dangerous component of any board meeting.

5. The Prudence Trap

Caution is wise.  Risk is dangerous.  Uncertainty is risky.  Prudence is called for.  But risk can be managed and the status quo is also a dangerous strategy in fast-changing times.  Risk-taking is neither good nor bad, but a strategy to discuss and evaluate in the light of all options and all mitigating strategies.

Good Decision Making is an Art

… and a science too.  There are a lot of tools you can draw upon and it is also important to understand the vital role of intuition, when you are operating in complex environments, where you have substantial relevant experience.

Management Pocketbooks you Might Enjoy

The Decision-Making Pocketbook

The Decision-Making Pocketbook is filled with practical tools to support decision making.

Also try:

The Problem Solving Pocketbook

The Thinker’s Pocketbook

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Learning Decision Making from Dr House

At its best, television can inspire and educate.  It can also make us think.  Some of us mourn the loss of House from free to air TV in the UK – ho hum: there are always DVDs.

So what can you learn from House?  Masses, it seems and there is even a book ‘House and Philosophy’ to guide you.  It is part of the Blackwell philosophy and pop culture series.

Introducing Dr House

image For those who didn’t catch the US drama series, House is an ornery, arrogant, self-centred and devious doctor who specialises in diagnosing and treating the most mysterious of cases that come into his hospital.

He is played by Hugh Laurie, about whom one American writer said: ‘does a terrific job with his British accent on Jeeves and Wooster.’

.

Don’t Care

House appears not to care about his patients – his concern is for solving the case.  Whilst there are episodes with exceptions to this rule, a distinct illustration of this is when he risks brain damage to a boy in order to find the evidence that will allow him to save the boy’s life.  When challenged about this, he replies to the effect that he does not worry about things he cannot do anything about.

Agent Regret

For most of us, however, the consequences of our decisions weigh heavily.  Regardless of our intention, if the outcome is bad, we have to live with the guilt.  This is known to philosophers as ‘agent regret’.  For House, the ends entirely justify the means, but it works both ways.

Moral Luck

If House makes a wrong decision – or indeed one of his subordinates does – it is not enough, for him, to hide behind ‘we followed procedure’.  In judging responsibility, it is again the outcome that matters.

A Good Decision

When we think about decision-making in organisations, we talk about a ‘good decision’ as one that can be defended.  It requires three things:

  1. The decision maker or makers have the authority and expertise to make the decision
  2. The decision maker or makers have the best information available
  3. The process that the decision maker or makers follow is sound – it is transparent, logical, and fair

But a good decision is not the same as the right decision.  We require good decisions, because they appear to maximise our chances of getting it right.  But we also require them, because we cannot require that all decisions are right.

How much do your decisions matter?

Agent Regret seems to me to be a fancy philosophers’ phrase for conscience.  Knowing about it can have two effects:

  • It could freeze you to the spot and stop you making a decision
  • It could galvanise you to take just a little more time to look for one more fact, or conduct one more test, before finally saying ‘go’.

So here’s the deal

Of course, when House takes the latter course, it usually works out.  Real life is rarely as obliging.  But even so, what is there to lose if you make one last check?

Management Pocketbooks you may enjoy

9781870471763

The Decision Making Pocketbook will give you a sound process and a range of useful tools to help you make your decisions.  They won’t prevent Agent Regret if you get it wrong, but they will limit your regret to the consequences, rather than ignorance or negligence.

You may also enjoy:

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