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Decision Making

 

To Decide - or Not to Decide

Shakespeare's Hamlet struggled with his "Final Exit" dilemma of whether "to be or not to be.  His classic soliloquy lives on as the dramatic portrait of any human being facing a critical decision, especially the final one.

Freely making and executing a decision is the very essence of human life, where the most complex brain on Earth can guide it (but often doesn't because emotion typically overwhelms rationality). Flowers and plants don't decide anything - they just grow naturally from the earth and toward the sun. Animals make decisions every waking moment of their lives, whether to run, search, fly or fight - but their decisions are mainly instinctive, based on automatic and built-in reflexes of continuous stimulus and response. Only humans have the rational capacity of reflecting on the consequences of decisions before making and executing them.

Even etymologically the word "decide" has ancient and profoundly meaningful origins. The word "decide" stems from the Latin root "caedo," meaning "to cut," which is exactly what a decision does: a decision cuts off most options and leaves alive only the one or few decided upon. Modern managers know this well as they face decisions daily that either make their careers or ruin them (and their organizations).

The Essence of the Executive: to Decide

Indeed, the essence of the executive, and why CEOs are paid so highly, is the enormous effect of an executive's decisions, often on millions of people, and the long-range consequences of extraordinary success (IBM's PC) or disaster (Ford's Edsel). Most people try to avoid such massive decision-making and leave it to others such as their bosses, priests, lawyers, accountants or other authorities.

But, for an executive, making such decisions each day is his essential function, the special skill or gift, which distinguishes him sharply from all his subordinates in an organization.

In this book, we will examine the process of decision making, both in terms of (1) problem solving methods as the foundation for decisions, and (2) the achieving of a decision's set goals by MBO (Management by Objectives).

Intuitive versus Rational Decision Making

There are three ways humans make decisions: intuition; rational analysis; or by inaction (passive decision making in which one does nothing and events overtake him and make the decision for him).

Ignoring here the latter, in which one decides not to decide and awaits ineptly the consequences of inaction, let's examine the two major ways decisions are made.

Intuitive Decision Making

The stereotype of top executives is a profile of the cool, analytical decision maker, patiently getting the facts, systematically evaluating his options, then calmly deciding. Studies, however, of actual CEOs and how they make decisions show much of this stereotype to be folklore. Based on such research, Mintzberg notes that: "the CEO is a holistic, intuitive thinker who revels in a climate of calculated chaos, jumping from topic to topic, and relying on hunches to cope with problems far too complex for rational analysis."

This is an apt image of a CEO facing a fast-approaching disaster or fast-receding and rare opportunity (to buy or sell, build or not, market this or that, fatten or kill R&D investments).    

Winston Churchill endures as a hero of history by his unpopular but firm intuitions (which saved Britain in the 1940s), especially in the early days of the Battle of Britain when the nation faced almost certain ruin by the Nazis, following their total conquest of France.

Theories and Uses of Intuitive Decision Making 

Many theories about intuitive decision making abound. Some theories base it on an intense habit of creative thinking or the processes of the subconscious mind.  Others explain it as an extremely rapid logical process (rational analysis) by a mind so experienced with a particular situation that all facts and options are grasped almost instantly, resulting in an instantaneous decision.

Instant intuitive decisions, seemingly rash, occur especially where inaction (no decision or deciding too late) is clearly the most risky option of all. Top executives live often in this kind of crisis climate, as do surgeons in emergency rooms, captains of jet aircraft, quarterbacks throwing a pass or field generals in the "fog of war."

With no intent here to belittle the value of intuitive decision making, it is by its nature and flash-of-light speed an unanalyzed, instant process at the subconscious level. Thus it cannot be taught in classrooms to managers as a useful tool; it is simply developed, if ever at all, by long job and life experience. But, if developed, intuitive decision making can be immensely useful as in the examples of Churchill and emergency room surgeons above. It is also as risky as it is useful, fatal mistakes revealed after events have been decided and time available later for rational analysis of lost wars, crashed jets, intercepted passes or deaths from surgery.

Decision making by intuition only is uniquely and always dangerous, often a dramatic success but more often by hindsight an equally dramatic disaster (avoidable by rational analysis decision making -if time and circumstances permit it).

Thus we will focus on the one process, which can be taught, learned and used by daily, systematic methods: decision making by rational analysis. This is not necessarily in opposition to intuitive decision making but should, where time permits, either guide or supplement ("check out") intuition. For example, in long-range goal setting and planning, a CEO (or obscure staff manager) might find "lightning striking" and the intuition of a radically new project or product to market. It could be the strange new idea of an automobile in an age of horse-drawn carriages; or electric light from glass bulbs in an age of candles; both society-changing triumphs.   It could also be Ford's bankrupt Easel or the now bankrupt and 74-year disaster of the Soviet Communism idea, which doomed millions to lifelong misery.

Where time permits (unlike surgery in emergency rooms or jet pilots facing a crash), all such "intuitions" should be respected as of high potential, but subjected to decision making by rational analysis before acting. The purpose of this book is to explain in detail the six mental steps, all radically different, involved in decision making by rational analysis.

 

The MBTI Personality Types

But, first, before examining the six (objective) decision making steps, we must address the human (subjective) reality: the different personality types of people who face and make decisions in many different ways. The best framework for understanding one's own personality type - and the types of others we deal with daily - is the now classic MBTI (Myers-Briggs Type Indicator).

The MBTI is based on C.GJung's original work (Psychological Types, 1923), which freed psychology from Freud's and others' rigid obsession with single-dimension personality patterns as normal vs. abnormal. Freud simplistically judged everyone based on "subconscious" degrees of two factors, love and hate. His followers continued the pattern, merely substituting slightly altered factors. Jung pioneered a radically new approach, recognizing many different types of human personalities, none good or bad per se, only different types. Later Myers-Briggs systematized Jung's Jypes into the MBTI, now used by thousands in management training.

Definitions of the Eight Personality Preferences

The MBTI indicates eight human preferences (natural personality tendencies) as four pairs of opposites in four categories. The four categories are: (1) Perception (how we come to know the world); (2) Decisions (how we make decisions based on what we know); (3) Our Orientation to the world (extravert or introvert); and (4) how we Organize our worlds.   Listed below are definitions of the eight preferences and typical apt words describing each:

  1. Our Perception (S or N): how we "see" and know the world, select the information we want about it, ourselves and others.   People are predominantly Sensors (S) or intuitors (N).

• SENSORS (Ss) sense and sharply observe everything in sight, with a keen eye and ear for here-and-now facts, specifics and details; the present, ignoring future possibilities, plans or dreams. They are considered "doers," high-achievers in the here-and-now, focusing on hard facts and getting immediate, necessary goals accomplished now. They excel in jobs such as auditing, investigative reporting, operating-level supervision.

• INTUITORS (Ns) are self-oriented, driven by their imaginations, ignore many here-and-now observable details while focusing on future dreams or plans. They concentrate on what might or can be rather than immediate, present facts and realities.   Typical careers: long-range planning, scientific research, new-product engineering.

  1. Our Decision Making (T or F): how we use our information in making judgments and decisions. People are predominantly Thinkers (T) or Feelers (F).

• THINKERS (Ts) make decisions systematically and methodically based on logic and rational analysis. They distrust emotion and sentiment. They are more cool "head" than warm "heart," concerned more with objective reality (things, events, options) than subjective feelings, people or human relationships. Typical careers: line managers, bankers, financial analysts.

• FEELERS (Fs) are guided by their deep-down feelings. They value highly the strength and meaningfulness of their friendships and loves, their human relationships. They trust their inner feelings more than logic, dislike cold, impersonal analysis. Their honest emotions and "gut instincts" are for them the best and sure guide for their decisions.

  1. Our Orientation (E or I): whether one is naturally outer-oriented (to others) or iwier-oriented (within oneself). People are predominantly Extroverts (E) or Introverts (I).

• EXTRAVERTS (Es) get their mental energy by vital stimulation from interaction with other people. They are socially oriented, like to be with others, thrive on visiting, phoning, parties, group activities and every sort of involvement with other people. They love to be "out" at shopping malls or meetings and dislike being alone. Even studying alone, or sometimes sleeping, they have a radio on in the background for a sense of the presence of others. Typical careers: sales, personnel counseling, News reporters.

• INTROVERTS (Is) get their mental energy and vital stimulation from within themselves. They like to be alone most of the time but enjoy one-on-one contact with a few close friends or loved ones.  They thrive in quiet, no noise or distractions; treasure time alone to think, examine their plans and life; dislike radio backgrounds (except to tune in briefly for the News). Most introverts cope, as they must, in social settings (jobs, meetings, speech-making, etc.) for a while but, after much forced interaction with people, yearn to "get away," return to their rejuvenating inner world, "re-charge their batteries" alone -before again confronting the uncomfortable outside world. Typical careers: scientific or other research, analysts, writers, computer programmers.

  1. Our Organizing of the world (J or P): whether one is driven to organize and control his personal environment, initiate action; or "wait and watch" events and life as they unfold naturally, with little personal intervention, reacting rather than acting.  People are predominantly Judgers (J) or Perceivers (P).

• JUDGERS (Js) need to organize and structure every aspect of their lives (and often others'), day by day, hour by hour, year by year. They make firm plans, schedules, lists of agenda, do them exactly and on time. Their desks, files and homes are strictly structured, a place for everything and everything in its place -always\ They are frustrated when any matter, big or small, is pending, undecided, left hanging and unsettled. They never procrastinate, make prompt and firm decisions. For Judgers, the world must be organized and very "orderly." Typical careers: Air traffic controllers, lawyers, line managers, science teachers.

• PERCEIVERS (Ps) prefer a spontaneous, unstructured life; watching, perceiving and enjoying life as it unfolds naturally; letting nature, events and others make decisions for them. They avoid decisions, if they can, and have little interest in organizing or controlling things. They are natural watchers and listeners. Uninterested in an "orderly" world per se, their desks are cluttered in disorder but they can quickly hunt and find whatever they need when they need it. Typical careers: Investigative reporters, personnel counseling, receptionists, Darwin-type naturalists.

 

The "X" Factor in MBTI Types - and Degrees of Each

Many people, after careful examination of the eight MBTI definitions, find that on most scales they are clearly esot Is, ts.ot Fs, etc., but somewhere near the "middle" on some one scale (rarely more than one). For example, I could be described as an INXJ. I am clearly and unambiguously an I, N and J; but, on the "T-F" scale, I often seem a "mix" of T and F, halfway between T and F, more "F" when younger, now more of a "T." In such cases, MBTI uses "X" for the ambivalent letter (instead of T or F). "X" often suggests a life-long inner conflict between poles of a scale (logic [T] vs. feelings [F]). Of the 16 types (next page), an "X" means a combination of two type descriptions.

The Four Personality Temparaments

Major MBTI researchers (Keirsey) organize the 16 types into four basic personality temperaments. Others (Kroeger) prefer the basic 16 types.  We here combine the two approaches, organizing the 16 types into four columns, each a basic temperament. You can thus quickly Find your (or others') temperament and type (next page).

A "temperament" is the "god" born deep within each of us, driving our lives. The ancient Greeks recognized the basic four as Dionysian (MBTFs SPs), Epimethean (SJs), Promethean (NTs) and Apollonian (NFs).   Two of the temperaments (Ns) first gather information as abstract concepts, then evaluate it; the other two temperaments (Ss) sense immediate facts, then act [or not}. Here are the four human "temperaments" (% = % of the general population).

INTUITIVE THINKERS (NTs) (77%); "Have a nice and thoughtful day!" Dress for comfort, utility. NTs analyze, evaluate imagined possible futures; ask "why" as they try to understand the universe and forecast its future, whether it's their marriage or Earth's environment. Objective, they excel in strategic planning, the "big picture," systems analysis, research, risk-taking but with risk-management. But some areas, others Js.

INTUITIVE FEELERS (NFs) (73%): "Have a nice and inspiring day!" Dress to impress. NFs "feel" the future, love people deeply (like SFs. many if Es, few if Js). They don't ask "why." but, as sensitive, subjective, idealistic do-gooders, have massive impact on all they touch. They excel as writers, novelists, counselors, helpers (doctors, nurses), team builders, warm supervisors gaining the best cooperation from their people.

SENSING JUDGERS (SJs) (36%): "Have a nice productivity day!" Dress in quality for one's profession. _SJs are fact-oriented, realistic, practical, on time. No speculation; only facts, rules, now. They excel as tough, efficient administrators, prompt and hard decisions, solving problems a day at a time. But some are, others .Fs!

SENSING PERCEIVERS (SPs) (40%): "Have .fun today." Dress for impact! SPs are impulsive, spontaneous, focused on this day now. its spectacle of sights (never organize or control it likes Js, only watch and enjoy it). SPs love action, excitement, variety in things, ifjs, with people ifjis). Life is "act now; pay later" and a "thrill a minute." They excel as teachers of children, nurses, exciting inventors (ifjs) or spouses (if.Es). 

Decision Making is Very Human - Subjective and Objective

Decision making is never done in an impersonal vacuum; it is we humans, of all MBTI personality types and critical "overlays," who make each day's specific decisions - both minor and monumental. The unique combination of MBTI type and overlays in each person drives each decision each day in a complex mix of ever-changing situations.   The complexity of decision making therefore remains forever mind-boggling, driving millions of individual decisions daily ranging from intuitive decision making to rational analysis (and even passive inaction). By hindsight (usually too late), we all learn which decisions were good - or bad.

As noted above, only decision making by rational analysis (six steps) can be set forth as a systematic and helpful mental procedure to improve the odds of making good decisions and avoiding bad ones. There is surely a place for intuitive decision making; but such decisions should be evaluated by rational analysis before acting on them.

Six Steps: Decision Making by Rational Analysis

It is ironic that a human process as vital and consequential to human life as decision making, affecting the lives of literally billions of humans throughout history, has been ignored by scholars until the 20th century. The ancient Greeks, 2500 years ago, developed sophisticated fields of knowledge such as mathematics, logic, astronomy and philosophy.  But, except for anecdotal comments about the arts and science of administration in Plato's Republic, Aristotle's Politics, Machiavelli's Prince and few others, today's management fields of study now at graduate and even doctoral levels (leadership, decision making, etc.) were mainly ignored as too profane and practical, not worthy of the attention of serious intellectuals.

Scholars in universities and government began formal research into administration about 1900, led by pioneers such as Frederick Taylor, Henri Fayol and Max Weber. Since then, dozens of decision making models have been researched, developed, tested and taught. Many of today's decision models are computer-assisted or even expert computer systems (such as medical diagnosis) in the emerging field of artificial intelligence. But, at the root of any decision model are certain fundamental mental processes or steps. The steps can be organized, in number, from a few to dozens. But the essential elements of decision making by rational analysis can now be consolidated into six critical steps. The first three utilize problem analysis; the last three are the actual decision making, based on prior and proper analysis of the problems) involved. To illustrate the six steps as we examine them below one by one, first study the short case that follows (a problem solving meeting based on a real event):

A problem-solving meeting in the XYZ Credit Union

The setting — Bill Jones supervises four loan of­ficers. The following is a representative sample of the problem-solving process in a meeting of Jones with his loan officers.

Bill: I've called this meeting because I'm getting some heat from the top about errors being made in our paper work on loans and shares. It's a real problem. We've all known for some time that mem­ber complaints are increasing. We've simply got to solve this problem of inaccuracy and errors, which really got bad about a year ago.

Al: Frankly, Bill, I'm glad you called this meeting. I'm convinced—and have been for months—that I know what's wrong. It's the training. I can't do anything about it, but I'm certain our clerks are not getting the training they used to.

Sid: Al's got a point. But, more importantly, it's really, in my opinion, the recruiting. We're scrap­ing the bottom of the barrel. We're just not getting the kind of people we need for a top-quality -job. So, what are we supposed to do?

Martin: That's right, Bill. We're getting amazing re­sults considering the clods we've got working for us. It's a motivation problem. These people don't have any, and...

Bill (interrupting): That kind of attitude doesn't solve anything. We've talked about this before, Martin, and you know my view: A manager is going to have real trouble unless he has genuine respect and concern for his people. I know you call this "soft" . . . Well. let's not get involved now with discussions of leadership styles.

Sid: No, let's don't. But, Martin has put his finger on one real big problem. At least, I think so—and that's the general morale. It leaves a lot to be de­sired. In fact, our real problem is probably the turnover we've had the past year.

Larry: Pardon me for changing the subject. I've been listening and I think you are all barking up the wrong tree. I know you're waiting for me to bring up my new forms concept. So, I will. But, really, I'm not sure that's the problem or that the new forms are the answer. The current forms haven't been revised in the last seven years. If we could just agree, here, to support my revisions and get approval from the board...

Martin (interrupting): Larry, I support your new forms. I think they're fool-proof and that's certain­ly what we've got to have. Why can't we get approval. Maybe that's our real problem: No com­munication between the policy types on the board and the rest of us in operations who do the work.

(An hour later. The tone and movement of the meeting remaining about the same

Bill: So, where do we stand? What are we going to do? I don't think I need impress on you that we had better do something The head shed simply isn't going to stand still for any more talking. They want action. So, let's get to the point. What are we going to do?

Larry: Well, Bill, you know what I think we ought to do. You know—you all know—that these forms need revision and I think my revised drafts make the improvements and do the job. You've all look­ed them over and told me, at least, that you like them.

Martin: No question about it, Larry. I think you've done a great job on the forms. I'm for them one hundred per cent.

Al; Bill, I think that's the direction we had better go. Larry's new forms are good. And, as you say, the board is screaming for an action plan. Well, Larry's new forms are an excellent action plan. I'm for it. At least the head shed will see we are doing something.

Sid: I've got to agree. Let's decide on Larry's new forms.

Bill: Gentlemen, I think we're on the right track— finally. We seem to be in agreement, and that's our decision. And, thank you.

Step 1. Focus on the Problem 

Participants in the XYZ meeting are generally rational people but totally unfocused and irrational in the emotional fog of this meeting.  It illustrates the supreme irony of problem analysis and decision-making: The sharp contrast between theory and application. Conceptually, intellectually and in the cool abstract, it is utterly simple (the six steps are plain common sense). But, in our real worlds, as we try to apply the six steps to specific situations involving our own lives and careers, we are distracted, blinded by intense emotion, anxiety, or panic, often become incapable of rational judgment. Of the MBTI types above, Fs (Feelers), Ns (intuitors) and Ps (Perceivers) are especially vulnerable to this personal "fog of war" in making actual decisions. Fs collapse into irrationality (nervous breakdowns) under intense emotion, fear or anxiety, even become incoherent; Ns tend to ignore present facts (threatening ones, especially), imagine vivid futures either self-deluded into unfounded hopes or paralyzed by imagined disasters; Ps typically avoid decisions entirely or dump them on others to decide. Ss (Sensors) can suffer fixation on some minute fact and go no further; Js (Judgers) fixate on some irrelevant policy, SOP routine or rule.

In the XYZ Credit Union case. Bill exactly identifies the problem at the outset (inaccuracy over the past year). But then he and all flit like butterflies from one issue to another, seldom focusing on that one problem. Each darts to a different concern of his in a flurry of emotional yelling about everything except the single problem identified.

Individuals, alone at their in-baskets, do the same thing in a panic at piles of problems surfacing from their mail (irate customers, IRS, etc.), dart from one to the other, never prioritizing them and then fully handling each, one at a time.

Step 1 (focusing on the problem) is mental discipline:

Forcing and maintaining a focus on one single problem at a time, never allowing the mind or mouth to wander emotionally into dozens of issues while no single one of them is ever isolated, analyzed systematically and solved. Study again the XYZ meeting and note how all charge into their own issues, never a focus on any one single problem. The meeting is doomed and useless from the start, with no focus and no way to even begin the next tyive mental steps of problem solving or decision making.

Such loss of focus, with massive consequences, is common also at macro national levels of decision making (especially in near-anarchy democracies) by leaders of nations in international treaties, CEOs in corporate agreements, lawyers with plea-bargaining, and Senators in votes for national laws or Supreme Court confirmations (it's later justified as "linkage," "compromise" or "sound politics"). (One is here sorely reminded of the critical MBTI overlays of ethics, character and just plain honesty.)

''Short-circuiting" the Six-Step Process

The term and vivid image ("short-circuit") is used often below as a familiar "electric" analogy or reminder of the damage caused in decision making by diverting, misplacing or ignoring any of the six sequential and essential steps in systematic decision making. In Bill's XYZ meeting, all six steps were short-circuited with a panic-type decision at the end, without even an implementing plan.

Step 2. Specify the Facts of the Problem

With sharp focus on the problem identified, we need next to get and understand the specific facts and factors describing the problem - as much as we can. Early texts stated the first step of decision models as "get all the facts." In theory, this is logical and ideal; in reality, it is rare that one can wait for all the facts while events and options speed by.  In practice, Step 2 demands a balance of time, searching out sufficient significant information for a rational decision but avoiding excessive delay that destroys opportunities and options altogether. For example, while waiting for the last speck of trivial information about a highly desirable property, someone else buys it.

Sufficient significant information can typically be gained within reasonable time with merely a little patience, prompt information gathering and homework. In the XYZ case, no one asked even the most basic questions about the problem of inaccuracy (where the errors are occurring; what kinds; how many; etc.). The main reason again is usually emotion overwhelming rational judgment.  The XYZ people seem anxious, in a panic to decide quickly, right now, on any kind of "action plan" to relieve the threatening pressure from top management. So they short-circuit Step 2 entirely, along with other steps.

Another common example involves the problem of a sales decline in any company. The marketing VP of the ABC Sales Company learns in horror that national sales are down 9% for the last quarter. With his boss, the president, demanding a remedy and fearing for his very career, the VP instantly increases national advertising, short-circuiting Step 2 and the other decision steps. This might work, but, if so, only by lucky accident, not by rational decision-making.

Step 3. Find Probable Causes of the Problem

Step 3 is the magic of problem analysis, if and as it is possible. If a doctor can truly diagnose the specific cause of a vague fever, his decision is automatic, quick and sure: prescribe the specific medicine for that specific illness. So with our ABC VP: if he could determine the specific cause of the sales decline, he could more surely use specific remedies.

But often a doctor cannot identify the cause of an illness or it is not yet even known to medical science. Even more often, a manager cannot determine the true cause of a sales or operations problem. Thus often decisions must be made without the benefit of Step 3. Despite this limitation, rational action is quite possible: doctors still don't fully understand how aspirin, for example, causes reduced fever or inflammation, but they know it does and therefore prescribe it to solve such problems.

Diagnosis: The Manager's Use of "Scientific Method"

As a practical matter, for managers, Step 3 will range from useless blind alleys to critical information, although seldom magic. Managers can develop the mental habit common in science (called scientific method, "induction," or statistical inference) by which causes of problems are determined with varying degrees of probability.  The method in essence searches for correlations, how variables occur together in place and time. For example, oversimplifying the process, malaria is an illness which we can call a "variable," an event that varies, occurs at some places and times. If, by observations (often in the hundreds), scientists finally find another variable (such as the bite of a mosquito) always associated in place and time with the variable, malaria, then the probability rises that malaria is caused by a mosquito bite.

Far less exact in the behavioral sciences and in managerial problems, the same method can still often provide limited, but vital, information about the causes of problems. For example, some cool and patient Step 2 fact-finding might reveal that most of XYZ's errors are occurring in just one department (their decision about new forms is a knee-jerk emotional reaction - and irrelevant, especially since the inaccuracy began only one year ago); or that ABC's sales are down only in two of their product lines in their Western region (increased national advertising is irrelevant; more probable causes are the Western region managers or practices for only those two product lines).

Problem Analysis: Guidance System for Decision Making

Steps 1, 2 and 3 constitute problem analysis: focusing on a problem; describing the facts about it; and, if possible, determining its causes). Problem analysis thus becomes the rational framework or "guidance system" for the following three Steps (4, 5 and 6) constituting the actual decision making. All decision making involves a goal. The goal is often to solve a current problem and hence the need for problem analysis as in Steps 1, 2 and 3.

In many cases, however, there is no problem at all; only a desirable new goal. For example, a firm's top management might be tempted to expand into an entirely new product field. There is no problem, only a current opportunity (another firm for sale at a bargain price). Whether the decision making goal is to solve a problem or not, Steps 4, 5 and 6 constitute the necessary rational process.

Step 4. Generate Alternative Solutions or Options

Step 4 is essentially creative thinking, "brain-storming," listing all possible options, while explicitly avoiding until Step 5 any realistic evaluation of the options. Indeed, brain-storming, now used in many organizations, consists of these two parts.   Part I (called "ideation"), similar to our Step 4 here, is a meeting devoted to generating and listing as many new ideas as possible for the solution of a stated problem or gaining of a goal. In Part II (our Step 5), later, all ideas are then realistically evaluated. The aim of the two parts of brain-storming is one or a few truly new ideas which are both original and realistic.

For example, in the ABC Sales Co. case, suppose Steps 2 and 3 determine the most probable cause of the sales decline to be the two sales managers in charge of the Western Division's two problem product lines, both of whom are clearly failing in their jobs. In Step 4 we would brain-storm and list all possible options, but not evaluate them, such as: replacing them, training them, coaching them in specific functions, transferring them, demoting them, etc. In many situations, one need not "reinvent the wheel;" just contact colleagues, one's trade association or consultants with experience in similar businesses to list their already-tested ideas. Their experience and history often contain the very answers needed. As Harry Truman quipped: "The only thing new in the world is the history you don't know." Or a modern philosopher: "Those who don't know history are doomed to repeat it."

We now advance to Step 5. As no/i-judgmental and un questioning creativity is the essence of Step 4, so strict and realistic judging, questioning and evaluation are the essence of Step 5. (In the XYZ meeting, these Steps were also short-circuited as everyone catapulted in a panic over all the Steps to an emotional Step 6 decision.)

Step 5. Evaluate the Probable Consequences (Good vs. Bad) of Each Available Option

If Step 4 has been fully accomplished, we now have a long list of unexamined options (many "wild") for the problem or goal being analyzed.   Now, in Step 5, we systematically evaluate the options, putting each to the tests of practical feasibility and realism: how much would it cost? how long would it take? legal problems? more staff? will it work? etc. Instantly, most of the options on the "brain-stormed" list will be discarded as unrealistic or absurd. But one (or a few) might survive the reality tests and become a "world-changing" innovation, an original and brand new idea that is also practical and realistic (Ford's Ford, Adam Smith's capitalism, Edison's light bulb, MacDonald's burger, Einstein's E=MC and nuclear energy, Margarine in a tub, Man on the Moon, etc.)

Modifying Creative Ideas into Practical Realities

Such conversion of a (wild) creative idea into a reality often happens when a seemingly absurd Step 4 idea is realistically modified in Step 5 and becomes realistic and practical innovation. For example, in one brain-storming session I recall, the goal being to increase company sales volume, two "absurd" Step 4 ideas were laughingly tossed onto the list: "don't sell the product at all, just give it away;" and "don't even make the product, just junk it." Later, in the Step 5 session, the first idea was modified realistically into a successful promotion of selling one item at list price with another added mfree; the second idea led to discontinuing an almost obsolete product and reinventing a new and successful substitute for it.

Re-cycling Through the Six Steps

The inherent obstacle in Step 5 evaluation is the ever-obscure future: the "fog of life" before us as we try to estimate the future consequences of any here-and-now action - both what they might be (how many) and their probability.

As we analyze the consequences of our options in any decision, it is thus often necessary to back-track or "re-cycle" to and through previous Steps such as Step 2 for more information about an option or consequence not considered earlier. Step 3 for a more refined estimate of problem causes or Step 4 to search out better options.

The six Steps are not at all, in practice, neatly linear but dynamic, a scaffolding of many levels that must be revisited and re-worked frequently. For example, in the ABC Sales Co. case, evaluation of just one of many options (replacing a sales manager) will force us back repeatedly to Step 2 for more information about the availability and qualifications of his successor and other issues. Like a domino effect, we are forced always elsewhere through the six Steps on issues such as training needed, budgets, cash flow, market changes, etc.

The Demons of Decision Making: Unintended Side Effects

Most treacherous is the ever-hidden and fatal trap of the unanticipated, - unintended and unwanted side effects. No matter how hard we try, we often overlook some one bad effect of an action, especially a long-range one many years away, as our attention (or emotional hoping) concentrates only on the intended effect, solving an urgent problem or achieving a prized goal. Because of our "tunnel-vision" tendency, weddings dissolve into divorces; wars end up as defeats;

centuries after the white (seeming) convenience of slavery in America, blacks and Hispanics will soon dominate America by high procreation rates and patient protesting for "rights."

Even highly skilled market analysts (and economists with their computer models) squirm daily as they advise people to buy or sell in the stock, bond, real estate or other markets - because so much of the future is inherently unpredictable. Much of the world's future, indeed, depends on millions of decisions by others that are not yet even made - but they will affect ours in the future, as ours will affect theirs.

Given this complex decision maze in merely one's individual life, imagine the mind-boggling complexities of macroscopic decisions by national Presidents, corporation CEOs, Supreme Court judges and policy makers in NATO and U.N. bodies as they make decisions affecting the entire world, nations and many millions of human lives.

The "Systems Approach" in Decision Making

 

"General Systems Theory" was invented in the 1950s. Now called simply the "Systems Approach," it dominates most Fields of science, mathematics and (MIS) management information systems.

Although intricate in science, the basic concept is easily used in everyday decision-making and a critical mental tool for anticipating very bad side effects in Step 5 evaluations of options.    In essence, the Systems Approach is a daily "way of thinking," a habit of seeing every decision as only one part of a larger system, with effects on every part of it.

The specific focus of any here-and-now decision is called the "focal system;" larger and smaller systems affected by the focal system decision are called "supra-systems" and "sub-systems." Using a simple example diagrammed, an airport manager, fixated solely on doubling flights and revenue (focal system), overlooks unanticipated side effects in supra- and sub-systems. After doubling his runways and flights per day, his (focal system) decision becomes a disaster as the City power company can't supply enough electricity, roads to the airport can't carry the traffic, baggage units are too small for the new baggage loads as are cabs and snack bars for passengers, etc.

We cannot stress too much the critical importance of "systems approach" thinking, as a daily habit, in all decisions, with its explicit anticipation of consequences throughout an entire  system. Without it, shocking surprises await the decision maker at unanticipated supra- and sub-system levels. The "Systems Approach" concept is literally cosmic, controlling the Universe of Planets, Stars and all life on Earth: Every single action of any ocean, plant, animal or human (' 'focal" system) ultimately affects all others in terms of Earth's complex ecology and balance of Nature. In our micro world, it is the same with every human's own daily decisions, as their unimagined effects reach out everywhere from their starting point (a seemingly simple Yes-No decision).

It is important, also, to appreciate how different are the mental functions involved in the six Steps (noted here with MBTI types and "overlays" as they excel in each Step, - all different and valuable resources in any problem solving meeting such as-YYZ's):

Step 1: Calm, firm Will, mental discipline to focus, not ramble (STJs)

Step 2: Keen observing of facts, as many and exactly as possible (SJs)

Step 3: Find & analyze causes, the "why" of problems (TJs)

Step 4: "Brain-storming" options for solutions (Ns and Ps)

Step 5: Evaluate, analyze options' consequences (re: "Systems") (TJs)

Step 6: Decide; strength of Will. MBO plan to implement (NTJs)

Step 6.  Make and Plan the Decision with MBO

Step 6 is not an intellectual function, but an act of Will. Whether the decision is intuitive or based on prior working through Steps 1 to 5, Step 6 is a decision. It should thus become a systematic plan, best implemented and monitored (for actual results .ys plan) by MBO (Management by Objectives).

The Human Climate Needed for Successful MBO

MBO is a simple and powerful method of organizing all operations at every level toward desired goals to be accomplished. But it is also fragile - easily and much abused, perverted into a cult-like rage in many organizations for two decades, substituting hypocritical mechanics and bureaucratic paperwork for the true and powerful spirit of MBO.

A successful MBO system demands (1) completely clear goals, and (2) a special human climate throughout an organization of mutual respect, support and trust, cooperation, teamwork, open and honest communication, and ethical reward systems for all. Without these conditions, MBO becomes a cynical and costly game - or internal war, to be discarded as a waste of time, money and morale. But, with and built upon this energizing human climate, MBO can surely work miracles.