THE DECISION-MAKING PROCESS

When we looked for a model of the decision-making process, one that seemed especially intriguing, in light of recent controversies about its authors’ decision-making skill, was that used by NASA, illustrated in the table at right.

Whether we decide instinctively (whether to flee or fight), rationally (what laptop to buy), or morally, aesthetically or emotionally (who to vote for in the next election), or using some combination of the above, we do tend to follow this process. Our decision criteria can be objective or subjective. The process can be one-pass or iterative, formal or informal. In some cases we ‘back into’ the process — making a possibly impulsive decision and then attempting to justify or test it by going back through the process. The facts and assessment of unknowns can be exhaustive and methodical or cursory, often depending on the importance of the decision and the consequences of making the wrong one, though I’ve heard more than one CEO pride himself on his ability to make fast decisions with incomplete information, even if better information was available.

Some of us are prone to groupthink — unduly influenced by the preferences of others, even if those preferences are uninformed, illogical or volatile — you see this often in election campaigns.

There are different styles of weighing alternatives, too. Some prefer to find consensus, and consult extensively with others whose judgement they trust — recent studies indicate, with the benefit of hindsight, that such an approach yields superior decisions. Others take an adversarial, black-hat or ‘devil’s advocate’ position to try to get opposing perspectives before making decisions. In his new book, the Wisdom of Crowds, James Surowiecki cites the importance of careful design of a decision-making or advisory group (most critically that they be informed, representative of different stakeholders and perspectives, and independent thinkers).

We tend to be influenced differently by others in the decision-making process, depending on our personal values and our position in the organization or group — some of us are deeply influenced by others’ authority (status or education), reputation, or trustworthiness (which means peers’ views get more weight than either superiors’ or subordinates’).

Inaccurate, incomplete or biased research or debate can also produce inappropriate decisions — some of us are more aware of ‘spin‘ in what we read and hear than others. Marketers have perfected techniques that range from manipulative to dishonest to influence customer buying decisions. And as these fall from favour, subtler, more subversive techniques — like story-telling — are taking their place. Some legal decisions are considered so critical that there is a special standard of fairness — “due process’.

Technology sometimes gives us the opportunity to defer making decisions and keep many options open until more facts are available and the risk of decision error drops — rapid prototyping for example.

Here are four brief stories about decisions, that reveal good and bad decision-making processes:

1. A friend of mine was hiring for a research-analyst position. There were three excellent candidates, but all four interviewers rated a tall, well-spoken, attractive, well-dressed young man as their clear choice. The word three of them used to describe his superior je ne sais quoi was ‘presence’. It turned out presence was all he had — his research skills were questionable, and the interviewers later kicked themselves for not looking more closely at his sample work-product before hiring him. Before he could be hired, he quit for a much higher-paying job in PR, a job he had no credentials for, and where he is now Vice President.
2. A colleague was trying to decide between two new house models. He and his wife were each leaning slightly towards a different choice. He drew up a chart listing all the buying criteria they cared about, weighted each criterion and rated each house on each criterion. The house his wife preferred got a higher total score, but my colleague wasn’t convinced. He kept trying to rig the numbers or weights to change the scores, but couldn’t do it, so he relented and they bought the house his wife preferred. A year later he was delighted with the decision, and couldn’t understand how he was attached to the other house at all.
3. A woman I know was going out with two guys, and was under growing pressure to make a decision. All her friends preferred Guy A, with whom she shared many interests, over Guy B, who spoke little English and with whom she had almost nothing in common. She chose Guy B anyway, citing ‘pure chemistry’, and eventually married him. Twenty-five years later, it was obviously the right choice — they’re still together and very happy.
4. A small Canadian company was successfully courted by a foreign company that appeared, on the surface, to be a perfect tactical fit — the Canadian company had great products and R&D, while the foreign company had lots of cash and market presence around the world. Five years later everyone from the Canadian company was gone and all that was left was a warehouse. The strategies and cultures of the two companies, it was clear in hindsight, were completely incompatible.

This year, Canadians and Americans will both decide on a new federal government. The electoral process in both countries is badly flawed, the electorate is largely ignorant of the issues, and is being deliberately misled by campaign advertising, while the media, in typical fashion, are oversimplifying many of the choices and completely disregarding others. The only thing we know for sure is that, in both countries, more people will consciously decide not to vote than will vote for any of the alternatives. I wonder what that tells us about The Wisdom of Crowds?