The Art In Decision Making

THE ART IN DECISION-MAKING Francis Lobo

Decision-making is a human activity involving free will & choice. It must be differentiated from a transaction where only rationality & logic are involved & the action required is unambiguous & hence, the process can be automated. In decision-making there is conflict, ambiguity & uncertainty & hence, both rationality & emotions come into play, both sides of the brain are required ---the Left Brain for logic, rationality & judgment & the Right Brain for creativity, ideas & vision. It is recorded by Herodotus in 430 B.C. that the Persians used to make important decisions when they were drunk. If the same decision was agreed upon when they were sober, it was carried out. Conversely, decisions made when they were sober were reviewed when they were drunk. Weird as this may seem there is justification for this approach. The human being is the only creature we know which is bicameral, with two brains, a left-brain & a right brain. The left-brain works faster than the right brain pushing us to act based on what is obvious & logical. The right brain is more reflective, seeing the total picture & hence seeing what is not so obvious, the minute details, the hidden opportunities & threats. Alcohol slows down the left-brain hindering quick, reflexive action. In a relaxed mood the creativity & insight of the right brain comes into play. That is how probably Archimedes discovered, while relaxing in his bath, why things weigh less when submerged in water. But, since decision-making involves both thinking & feeling how is this synthesis done? Recent discoveries have found that this is done in a third part of the brain termed the OLD BRAIN. It is a primitive organ & is also called the reptilian brain as it still exists in reptiles. It is the seat of the powerful subconscious & is concerned with our survival. For those concerned about decision-making the new insight is that a Dominant Attitude makes decisions. People avoid or fail to make decisions if the driving force is absent or not enough to overcome the obstacles involved. As human beings we continuously have to make decisions, as in purchasing or getting others to make decisions as in selling. In fact it is said that nothing happens until someone sells something be it the mother getting a child to eat her meals or a politician seeking your vote in an elections. ATTITUDES Attitudes determine HOW we will approach Situations & whether we will act at all. Attitudes develop & are strengthened by experiences. Experiences may be obtained through Life Events or through education & training. Education is meant to expand the experience base & transfer the experiences over history & time to the student. It determines “How” one will decide, which is considered more important than “What” is decided. Computer simulators replicate actual conditions & hence, compress years of experience, which involve time, pain & cost, into a few hours before a computer screen.

The more experiences we are exposed to the more likely we are to take decisions. People, who have decided, even though they may have made mistakes, should, therefore, be preferred to those who have not acted at all. “If you are not criticized you may not be doing much”. We react based on attitudes such as Fear, Greed, Security, Safety, Disaster, Uncertainty, and Crisis. Let us see how some Dominant Attitudes help in the decisionmaking process. Learn to Learn “Success is the stepping stone to failure” There are numerous examples of decisions, which were bad because they stemmed from wrong attitudes --- We know everything. We are the best. Don’t come to us with ridiculous ideas. Western Union, which at that time dominated long distance communication with the telegraph, rejected the offer to purchase Alexander Graham Bell’s patent for the telephone --- it had too many shortcomings. Bell & its successor AT&T came to rule the communications industry in the 20th Century while Western Union declined. Henry Ford refused to change the design of his Model T car & smashed the model made by an enterprising engineer, who had seen the need for change. Ford, however, was forced to introduce the Model A in 1928 but, by then General Motors was already ahead. Those who were running the electrical services by generating & selling direct current rejected the application of alternating current. So was the concept of the vacuum brake on the railroads. For effective decision-making one must “Learn to learn”, be prepared to say, ”I. don’t know”. One must NOT stop to hear what others have to say. There is a distinction between “Wrong decisions”, which everyone makes because of lack of experience or information & “Bad decisions” which don’t take the necessary precautions or go against science, human nature & the welfare of mankind. Predictable errors are preventable. But outcomes & results are most often unpredictable & determined by forces out of our control. There is always the element of chance in how things work out. But, the way we make decisions, the process of decision-making is in our hands. Feel the Pain “People act to relieve Pain --- when they experience it themselves” There is much talk, global conventions & summit meetings about making poverty history, combating terrorism; fighting aids, etc. but very little are done. U.S.A. started the global war on terror only after the Pain of 9 / 11. Henry Ford reduced the working hours of labor from 9 to 8 & more than doubled the wages from $ 2.34 to $ 5 / day when he was faced with a turnover of 370 % on his assembly lines with the grueling & mind numbing work. Good decisions must aim at making life easier, better, safer, cheaper for everyone. IBM created in 1964 a family of computers that would remain compatible with future generations of computers. Pain & inconvenience have resulted in standardization & interchangeability of parts. It has lead to innovations like money as a medium of exchange, the postage stamp, insurance, laws & systems of governance. If nothing

happens till someone sells something, nothing can be sold till someone feels the pain. Greed & jealousy are also forms of pain that drive decision-making. Making Quality Decisions is a Process You don’t build quality by removing the defects at the end of the production, but you build it by pursuing it along every link of the supply chain. Success results from a stream of decisions taken over time. Like in all other fields of human activity, good decisionmaking comes from practice, from learning from mistakes, from continuous improvement. Decision-making is an Art & like all arts it calls for putting oneself into the activity & becoming a part of it. You got to constantly build up on what you have. You got to continuously make deposits into your “Experience Account” from which you can draw when the occasion arises. You cannot make a good decision in a crisis if you haven’t practiced making decisions before. The word decision comes from the Latin “Decidere” meaning, “to cut off”. Decisionmaking means action, not allowing problems to drag on. Don’t wait till you have all the information, apply the 70 % Rule --- Decide with what you have. Decision-making involves ambiguity & uncertainty. Don’t procrastinate, bad situations don’t go away, they just get worse. Overcome “decidophobia”-- the fear of taking decisions. “Nothing is more difficult & more precious than to be able to decide.”--Napoleon There is no decision without choice. Hence, the decisions we make reflect our character & the type of person we are. Taking on a responsibility is having to make decisions, which cannot be delegated. The quality of our decisions makes us valuable. Strategies, people, careers, companies, nations are all made from decisions. Every activity involves making decisions be it planning, forecasting, setting objectives & time lines, selecting & evaluating people, approving budgets. Often we have to make decisions in milliseconds or at the flick of a switch. We must not wait for such moments to learn how to decide but condition & train ourselves for such eventualities. Look for what is Missing When applying the 80 / 20 Rule look at the 20 not the 80. The 80 / 20 Rule states that 80 % of the results come from 20 % of the items. Hence, most management teaching focuses on identifying the critical few that have the maximum impact on the results --- control these & you have mastered the situation. But experience teaches that the problem areas are in the 20 %. It is here that one sees the inroads of competition, the potential for growth or the disgruntled customers. It is the problem areas that consume management time & resources. That is why to achieve Six Sigma perfection we look at the extremes, the results that are beyond the limits. We then take steps to narrow the spread & to bring more items within control. Raytheon CEO, Bill Swanson writing from experience in his path breaking notes, “Swanson’s Unwritten Rules of Management” states, “Look for what is missing. Many know how to improve what’s there; few can see what isn’t there.” Finding the distortions, discrepancies, deviations, exceptions, variances, and discontinuities makes discoveries,

what is missing. The Romans worshipped “Fortuna”, the goddess of randomness. W. Edwards Deming showed how statistics & randomness could be used to improve quality & thereby increase productivity, profits, jobs & the quality of life itself. Have vision A child sees more into the future than the parent. Having a better vision doesn’t necessarily mean climbing up the organizational ladder. One gets a new perspective no doubt but often going down to Ground Zero is required to understand what the real issues are. Having a Vision implies seeing what others don’t see. Many inventions of the 20th Century were pursued solely on the Vision of those who saw their potential. It was said that the TV had no future --- American families didn’t have the time to sit glued to a screen! American culture was active & outgoing. The forecasts for the computer were that barely some thousands would be needed by the year 2000. The market research forecasts for the Sony Walkman & the Polaroid camera were equally gloomy. But many times people have pursued visions which were just mirages. How then does one know whether a vision is right? The approach is to dissect the internal drives with the external realities. But then are market surveys not external realities? The answer is that one cannot research what doesn’t exist. One must be sensitive to feel the pain & needs of others even though they may not be expressed. Use Soft Information There would be no news, no surprises, no shocks for the media to report if the media listens to what people are saying. Communications move through time & history by people first communicating to themselves, verbalizing the pains they are experiencing & then communicating these to others by what is termed as “Soft Information”. When a critical mass of listeners & activists is created the pain is expressed in public. If the noise is loud enough it makes NEWS. If it has a significant & long-term impact on society it is researched & distilled down into articles, research papers & books. All decisions have “People Content” & one must understand these to make a good & effective decision. The “Dialogue Route” in decision-making involves collecting information & taking decisions by discussing with people, getting their opinions, convincing, negotiating, getting involvement & participation. This approach may appear to take too long, be a waste of time & often goes nowhere. But used with skill the decisions become easier to implement & the results are long lasting. The approach is an antidote to UNCERTAINTY --- the pitfalls stemming from over optimism, untested assumptions, unheeded warnings, poor intelligence & failure to clarify authority. It determines who will decide & implement the decision. “Nobody is better at spotting holes in your plans than your opponents”. The approach combines the technical side of decision making with the human side --- it merges Hi-Tech & Hi-Touch. Apply Lateral Thinking Imitation is the best form of flattery. One-way to decide is to see how decisions have been taken & ideas applied in similar situations elsewhere. Wheels & rollers facilitate

movement so wheels & rollers have been used to move furniture, equipment, containers, materials, trains & aircraft. Aircraft were first used to carry mail. It didn’t take long to extend the concept to passenger traffic. When Gillette introduced the throw away blade it didn’t take long to create a new throw away society where it was more economical & time saving to throw away a used item rather than wash, clean, repair & reuse it. When throwaways created a garbage disposal problem, the recycling of waste emerged. Recycling of solid waste extended into biodegradable waste, water & even air. Test Your Decisions If you cannot act, you cannot decide. To implement any decision one must have the authority & the resources. Decisions change the rules of the game. Everything is connected with everything else & one decision leads to new situations requiring other decisions. Before you decide you must test whether it will work, whether the resources & infrastructure required are available, whether the environment is ready & able to accept it & what will be its impact in other areas. Some decisions are easily reversible, others are not. Decision-making is tested in the following ways depending on the style, attitude & approach of the individual: & ; Check out the logic & rationality. Weigh the pros & cons. Evaluate the Cost: Benefit. Quantify & optimize &; Do a sample test. Make a prototype & model. Experiment & see the results. Obtain physical evidence of its feasibility&; Discuss with others & get their opinions & consensus. Get answers to questions & objections. &; See the results in pictorial form --- a drawing, a chart, a map, a graph, a picture. &; Look for signs that the decision is on the right track --- both external & internal signs, what are the experts saying, what is my heart telling me &; Ensure that a decision is not being made under pressure of time, people & special interest groups. “What If” the decision is postponed? “What If” the circumstances change? Will I be able to justify this decision when viewed under the lens of Time or an Audit? Very often we are at the receiving end of a decision & need to decide how to respond. We must test whether the decision is being made to benefit solely the decision-maker or is it in the interest of all concerned. Be an Artist The artist sees the picture before it is painted. A decision must create something new, something different; it must bring about a change. Even a decision not to change attempts to change those who want to go in another direction. The decision-maker must be able to join the dots to see the end results of the decision. She must see the new & improved situation that is created. It must have the signature, the uniqueness, and the stamp of the person making the decision. Because a decision is a matter of choice, no two decisions will be identical or be made in the same

manner. Decision-making must be like medicine where people find it understandable & acceptable to remove the pain even though it may not be palatable. The artist in the decision-maker makes him proud of what he has done & hopes that it will stand the test of time. The decisions taken by the Tata Group under Ratan Tata have a unique stamp, which has the WOW effect of seeing a great work of art. The Group has retained its century old core values in the face of global pressures --- a decision not to change! TISCO has reduced its workforce from 78,000 to 45,000 & become the lowest cost manufacturer of steel in the world. The down sizing was accepted by the unions & the work force as all laid off workers get full salary till retirement. Vision & determination was exhibited in the introduction of the car, Indica. Learning to learn & lateral thinking is seen in the acquisition & application of new technology. The jewel in the crown is TCS, which, as the largest software development company in Asia, aims for perfection & high customer satisfaction in the services it provides to its global customers. Conclusion The decisions that he makes or doesn’t make define the man. The dawn of the IT Age [Information Technology Age] has added power to our decision- making ability. The available & accessible information have made quantum leaps in volume & speed, so have the tools for analysis of this information. But we also have the need for this power as today, more than ever before, we are under pressure to make decisions or to respond to the decisions made by others. We can avoid the responsibility or we can show leadership & blaze new trails. We can raise our sights & hit the ball out of the park. We have the potential of competing with the immortals by combining the power of knowledge with powerful inner drives to remove, with justice & equality, the Pains facing humanity in this flat, one & globalized world.