Business administration scholarships

The 5 Inherent Defects of Traditional Decision-making

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There are lots of variations on the traditional "how" method of decision-making. Since data shows that “decisions fail half of the time,” it seems safe to say that reality is often more confused and messy than a neat “how” based model can allow for. “How” based decision-making models are no longer adequate in our highly competitive world.

Content:

Decision-making in this world of increased information, technology, population and communication is a serious and growing problem. The traditional method of Decision-Making isn’t providing adequate results. Different proponents have different approaches to decision-making ranging from a 4-step process to 7 steps or more and it is based on problem solving. Generally the steps look something like the following:
• Define or clarify the problem. Somehow this whole process sounds negative to me. There is nothing positive about problems or estimating consequences. Flawed assumptions can derail the process and a misstep at this stage can lead to a bad decision or possible solution to the wrong problem.
• Stating a goal or objective. Sometimes this is presented as finding the causes of the problem. Other times as a premise and then information is gathered to support the premise.
• Generate options or alternatives.
• Evaluate alternatives and tradeoffs.
• Estimate Risk, by Comparing predicted outcomes of each alternative with the objective. Attempts are usually made to recognize uncertainty as well.
• Deciding on the alternative that best matches the objective.
• Implement the decision.
This is the basic “How to make a decision” approach that we have used since Ben Franklin introduced the old compare the pros and cons approach several hundred years ago. This approach has 5 inherent problems basic to the approach with lots of variations within each type of problem.
1. Perspective
Perspective is a problem inherent in any decision-making process. Perspective is unique to each individual. A single perspective is by definition limited even though it may appear complete. Within a given perspective is a criterion or direction that will cause decision makers to choose one option over another. Consequently it is imperative that as many perspectives as possible be involved in the framing the issue.
All too frequently decisions are made by a relatively small number of people with limited perspectives. Rarely are all stakeholders consulted and that limits perspective and options.
2. Data
This is a really tricky area. As we mentioned before, we live in a world of Too Much Information. Consequently it is easy to uncover an idea early on in the process and then only collect further research that supports the idea, ignoring everything else. This can be really dangerous as there may be lots of information that disproves the original idea and by ignoring it build failure into the decision.

It is critical to gather and evaluate all information, not just the information that supports the premise.
3. Interpersonal Relationships
As information is gathered, it is critical to listen to all stakeholders in the process. Ignoring a stakeholder is not a good idea as it will cause other stakeholders to give only a token effort. Another aspect of Interpersonal problems is when your boss commits to a direction and then everyone else falls in line. Compliance is a trap with a high price. After a power play, people will only tell you what they think you want to hear and will no longer tell you what they believe to be true. Everyone who has ever participated in any kind of group activity has seen this happen.
4. Implementation
Not making a decision ends up becoming a decision by default. This is usually the result of allowing inexperience, convenience, or haste to make the choice for them. It may also be caused by people who pose their questions carefully, collect their intelligence brilliantly, but then “wing it” when it comes to actually deciding.
5. The Unknown
Another problem that frequently arises at this stage is not knowing what you don’t know. All research is imperfect and for every action there are unintended consequences. We are also faced with Luck, both good and bad.
There are lots of variations on the traditional method of decision-making. The fact is that these variations are still “how” based models and as such leave themselves open to the same traps as the traditional model. Since data shows that “decisions fail half of the time,” it seems safe to say that reality is often more confused and messy than a neat “how” based model can allow for. “How” based decision-making models are no longer adequate in our highly competitive world.
 Copyright Bob Cannon/The Cannon Advantage, 2005. All rights reserved.

Author: Robert E. Cannon

About Author:

Bob Cannon helps visionary leaders improve performance and profitability. He is the author of the new book “Taking Aim for Better Decision-Making”, available at www.cannonadvantage.com . Bob can be reached at (216) 408-9495 or mailto: bob@cannonadvantage.com

This article courtesy of http://www.cannonadvantage.com. You may freely reprint this article on your website or in your newsletter provided this courtesy notice and the author name and URL remain intact.

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