The art of decision making
Are
you an authoritarian or consensus-building decision maker? Identify your style
and ensure that you make optimal decisions rather than just satisfactory
choices
The
understanding of decision making has moved far from the classic rational
model—which assumed that decision making is a logical process—to encompass the
impact of numerous factors. These include the involvement of emotions, energy,
physical state, environment, cognitive biases and more.
Social
psychologist R.F. Baumeister famously said: “Good decision making is not a
trait. It’s a state that fluctuates.” While he said this in a different
context, the words capture the capriciousness of decision making which, as we
continue to discover, is influenced by many variables.
The
interplay of leadership and decision making has been the subject of many
studies, given the inherent expectations of quality from leaders. Since the
decisions leaders make often serve as benchmarks for others.
Decision-making
styles range from authoritarian to consensus building. Research has found that
there are more leaders at the extremes of the spectrum than at the consultative
median. While every point in this spectrum is relevant based on scenarios and
desired outcomes, neither extreme is desirable as the default style for a
leader.
It
is important to understand the role of power on a leader’s decision-making
style—scientific experiments on the impact of perceived power on decision
making have thrown up some important results. Being in a position of power has
been found to affect the quality of decision making in these ways:
u
Power leads to an inflated belief in the accuracy of one’s judgement and
knowledge. Most leaders have ascended to power by virtue of the sound
judgements they made at various points in their journey. This could give
leaders an exaggerated perception of their assessment capabilities and make
them less receptive to advice and external inputs.
A
paper by Kelly E. See (New York University), Elizabeth Wolfe Morrison (New York
University), Naomi B. Rothman (Lehigh University) and Jack B. Soll (Duke
University), published in the Organizational Behavior And Human Decision
Processes journal in November 2011, provides some interesting insights
based on a series of experiments in which participants were given a chance to
review their decisions after receiving external advice.
High-power
holders underperformed on accuracy tasks since they discounted both expert and
non-expert advice, giving higher weightage to their own initial judgement.
Individuals who were neutral or non-aligned to the high/low power extremes
reached a higher level of accuracy by correcting themselves on the basis of
expert advice.
u
The need to be seen as powerful makes leaders exhibit amplified confidence in
their own views. Confidence is perceived by many as an important attribute of
leadership.
Many
powerful individuals, then, consider seeking advice to be a sign of weakness
and feel compelled to project a firm belief in their own stance. This not only
makes the leader less likely to seek advice but may also lead to the
suppression of dissent and good ideas from others.
In
light of these two points, it is important to note that the other extreme,
illustrated by excessive opinion seeking, low confidence in one’s own judgement
and frequent re-review, is also detrimental, since it may create an unstable,
erratic environment for the leader’s team. Structure and balance are crucial to
an effective decision-making process.
u
High-power individuals demonstrate lower recall of factors that may inhibit the
achievement of the goal. A number of experiments, including one by Professor
Jennifer Whitson at the McCombs School of Business in the US, have shown that
high-power individuals identify fewer potential obstacles to the achievement of
a goal. They are, therefore, more likely to act on goals. This, however, can
lead to sub-optimal outcomes if probable constraints are not factored into
decision making.
u
High-power individuals often experience less uncertainty about their future.
This helps them plan for longer-term results in comparison to low-power
individuals, who are more easily attracted to immediate gains. However, the
illusion of control is a common cognitive bias in high-power leaders that leads
to an overestimation of their influence over outcomes and future events.
u
Powerful individuals display a higher propensity for loss aversion than gain
maximization. Daniel Kahneman and Amos Tversky’s Nobel Prize-winning Prospect
Theory: An Analysis Of Decision Under Risk suggests that individuals avoid
losses more than they value gains in decisions that involve risk. This effect
is often more pronounced in the case of powerful individuals in high-visibility
roles since their decisions are typically subject to more analysis and
dissection.
The
impact of all this on strategic and organizational decision making is apparent.
It is important to design a decision-making process that invites consultation
but also extracts maximum benefits from the discretionary judgement of the
powerful leader.
It
is important to keep in mind the suggestions that follow while designing a more
effective strategic decision-making process for leaders and organizations:
u
Include a formal advice and opinion collection mechanism as the first stage of
the decision-making process, before leaders develop or voice an opinion.
Leaders feel less compelled to protect or defend an opinion which has not been
expressed and will, therefore, be more inclined and able to use the advice and
information received.
u
Encourage dissenting voices and allow ideas and views to be challenged without
reprisal. Create a process amenable to the expression of contrary views.
u
Override the latent risk-averse mechanisms of the human brain with structured
thinking procedures such as the QuadraBrain Affirmation Ideation technique,
which helps override the brain’s natural tendency to focus on what could go
wrong by following a series of pre-defined steps that then evolve into
spontaneous positive pattern generation to evoke new ideas; and Edward de
Bono’s Six Thinking Hats, which uses a parallel thinking process to
enhance decision making.
u
Actively seek evidence that goes against the initial plan. The process of
identifying and listing facts that are contrary to the decided plan reduces the
attachment to a tried and tested way of working. It sensitizes us to alternate
outcomes and allows us to improvise when necessary.
u
Ground judgements and challenge conclusions using systematic questioning
methods and tools such as the ladder of inference, which helps us understand
how we draw conclusions.
u
Encourage experimentation with collective intelligence tools, which can draw
attention to biases and help address them.
u
Invest in coaching to help leaders recognize and address their underlying need
for demonstrating magnified confidence levels. This will also enhance leaders’
self-awareness and create an appetite for honest self-reflection and alertness
to bias.
An
effective decision-making process not only helps overcome errors in decision
making, it also helps to move towards optimal decisions rather than just
satisfactory choices.
Source | Mint – Wall Street Journal | 11 April 2016
Regards
Pralhad Jadhav
Senior Manager @ Library
Khaitan & Co
Upcoming
Event | National Conference on Future Librarianship: Innovation for Excellence
(NCFL 2016) during April 22-23, 2016.
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