In a recent survey by Business Objects magazine, managers listed problem-solving as their highest priority; very few said decision-making. To gain a competitive edge, we must separate Problem-Solving, from Decision-Making – problem-solving is unique to the problem, while decision-making is unique to the person.
Why would one analyst recommend a stock to be a good buy while another would deem it to sell? Both might have access to the same information, yet they make entirely different decisions! The same is true of buyers and sellers in the stock market, supporting our claim that decision-making is unique to the person. The real reason is how we humans handle data. Before a decision is made – all quantitative data are transformed into qualitative interpretations. This is where we inject our values, biases, preferences, etc., into the conclusion: common sense and gut feeling. If not for such differences, we would not have a stock market!
Yes! Common sense and gut feel are integral to any decision. When we say, “it is my decision,” we mean that it reflects my gut feeling. However, because of the current information overload, management needs help navigating this sea of information. Hopefully, it is clear now that decision-making is quite distinct from problem-solving.
Yes, we recognize that the same person is often the problem solver and the decision-maker. What is important is that you realize this difference and act accordingly – be aware of the existence of the problem-solving phase.
You might ask the question, “What is a good decision”? When someone says, “it was a good decision” (in the past tense), what they mean is that the outcome proved it to be so. Unfortunately, we judge a decision as good or bad based on the result. Thus, we cannot say we made good decisions when we make decisions – we have to wait for the outcome. We can say that we used a reliable methodology to arrive at the optimum conclusion. Thus, we can judge the process – not the result. This is analogous to driving a car. There is no guarantee that we will not have an accident when going. Yet, if we adopt a defensive driving posture [the process], we are less likely to have an accident.
Consider this example. As the demand for beef increased – ranchers were looking for ways to increase the size of their herds. But there were competing demands for land as the human population grew – grazing land had alternative uses with higher returns. In the conventional sense, cows graze all day, requiring enormous amounts of grazing land. Ranchers tried increasing the available acreage, planting rapid-grow grass, optimizing the grazing schedules, etc. Still, the demand was outpacing the supply. Creative thinkers reversed the problem – why not keep the cow in one place and feed them in situ? A simple statement such as: “Anything that can be built on land can be built on water” – would open up a whole new way of thinking!
What is a “good” decision?
The quality of your decision will depend on five factors (Data & Information (problem domain); Context Information; Creative Options; Solution Technique; Expertise (of the decision-maker)). However, the outcome will depend on a different set of characteristics (Appropriate Timing; Adequate Resources; Commitment to Execution; Changing Circumstances). Here we must pay close attention to timing! The timing of the implementation will have a huge impact on the outcome.
Consider the 1973 Yom Kippur war, when Syria and Egypt attacked Israel on the holiest day in the Jewish calendar. What is more significant is that they picked the exact time when they – when the Jewish people were in the Synagogues. These were days before the cell phone, and the Generals had to drive back to the Command centers to give specific orders. As much as one would lament such a cruel and cowardly act, this example demonstrates the incredible significance of timing.
Consider this scenario: It is well known that narrowing the arteries leads to cardiac problems. So to address this – we should find ways of reducing plaque build-up. We also know that elevated levels of cholesterol correlate directly to cardiac issues. If we set our objective as “reduce plaque build-up” and then try to implement measures to do so – there is no way to measure the success or failure of our actions. Therefore we settle for a “surrogate objective” – a different end-point that we can measure, i.e., to measure the cholesterol level – before and after any action we take. If progress is not measurable in some way, you will not be able to determine the effectiveness of your actions.
In conclusion...
We urge you to separate decision-making from problem-solving. Leave the task of problem-solving to the subject-matter experts – to domain experts. When you see – “we have a problem” – remember, you must first find plausible solutions before making an optimal decision. If you follow the holistic approach, you will reach an optimum decision always. The timing of the implementation of your decision will have a significant role in the outcome.
Errol Wirasinghe Ph.D.
Dr. Wirasinghe has over 25 years of experience in Optimization, Creative Thinking, Opportunity Seeking, Decision-Making, and Strategic Planning for Shell Oil Co., Petroleos de Venezuela, Abu Dhabi National Oil Co., British Gas, Williams, and Enron. As an Oil & Gas industry specialist and a University Professor, Wirasinghe has published papers on topics relating to Management, Engineering, and Economics.
www.XpertUS.com
Photo credit: Unsplash
Why would one analyst recommend a stock to be a good buy while another would deem it to sell? Both might have access to the same information, yet they make entirely different decisions! The same is true of buyers and sellers in the stock market, supporting our claim that decision-making is unique to the person. The real reason is how we humans handle data. Before a decision is made – all quantitative data are transformed into qualitative interpretations. This is where we inject our values, biases, preferences, etc., into the conclusion: common sense and gut feeling. If not for such differences, we would not have a stock market!
Yes! Common sense and gut feel are integral to any decision. When we say, “it is my decision,” we mean that it reflects my gut feeling. However, because of the current information overload, management needs help navigating this sea of information. Hopefully, it is clear now that decision-making is quite distinct from problem-solving.
Yes, we recognize that the same person is often the problem solver and the decision-maker. What is important is that you realize this difference and act accordingly – be aware of the existence of the problem-solving phase.
The Need for a Holistic Approach
First, we must recognize – that even if we make an optimum decision – there is no guarantee that we will have the desired outcome.You might ask the question, “What is a good decision”? When someone says, “it was a good decision” (in the past tense), what they mean is that the outcome proved it to be so. Unfortunately, we judge a decision as good or bad based on the result. Thus, we cannot say we made good decisions when we make decisions – we have to wait for the outcome. We can say that we used a reliable methodology to arrive at the optimum conclusion. Thus, we can judge the process – not the result. This is analogous to driving a car. There is no guarantee that we will not have an accident when going. Yet, if we adopt a defensive driving posture [the process], we are less likely to have an accident.
The Role of Creative Thinking in Decision-Making
It does not matter how good a decision-making tool you use – your best decision is only as good as the best option you have identified! Therefore we need to train leaders and managers to think creatively to identify out-of-the-box solutions. But we have a problem! Jimmy goes through life being molded to be a conformist, and now we want him to be an “out-of-the-box thinker!- At home, Mom & Dad say.. “Jimmy, why can’t you be like Joe!”
- Then, the teacher says.. “Jimmy, why can’t you be like the other kids?
- Jimmy goes to work, and the boss says. “I don’t know where you come from, but in this company – we have mission statements, best practices, policies, procedures, etc. – we expect you to conform!”
Consider this example. As the demand for beef increased – ranchers were looking for ways to increase the size of their herds. But there were competing demands for land as the human population grew – grazing land had alternative uses with higher returns. In the conventional sense, cows graze all day, requiring enormous amounts of grazing land. Ranchers tried increasing the available acreage, planting rapid-grow grass, optimizing the grazing schedules, etc. Still, the demand was outpacing the supply. Creative thinkers reversed the problem – why not keep the cow in one place and feed them in situ? A simple statement such as: “Anything that can be built on land can be built on water” – would open up a whole new way of thinking!
What is a “good” decision?
The quality of your decision will depend on five factors (Data & Information (problem domain); Context Information; Creative Options; Solution Technique; Expertise (of the decision-maker)). However, the outcome will depend on a different set of characteristics (Appropriate Timing; Adequate Resources; Commitment to Execution; Changing Circumstances). Here we must pay close attention to timing! The timing of the implementation will have a huge impact on the outcome.
Consider the 1973 Yom Kippur war, when Syria and Egypt attacked Israel on the holiest day in the Jewish calendar. What is more significant is that they picked the exact time when they – when the Jewish people were in the Synagogues. These were days before the cell phone, and the Generals had to drive back to the Command centers to give specific orders. As much as one would lament such a cruel and cowardly act, this example demonstrates the incredible significance of timing.
Objective Setting
The starting point to solving a problem and, subsequently, making a decision is the “objective.” We often believe we have understood the issue and identified the objective (and the decision that needs to be made), but understanding the problem is not the same as having a clear goal. Here are a few real-life examples that clearly illustrate the need to have a well-defined objective – before you embark on the problem-solving exercise. Minimizing high-school drop-out numbers differs from increasing the number going on to college.- To meet the high demand for low-cost, the Dept. of Agriculture rushed to develop a high-yielding corn plant. It was a disaster! The objective should have been to increase the yield per acre rather than the yield per plant. Subsequently, they modified the plant to be more tolerant to living close to each other – thereby allowing them to plant more trees per acre.
- The US Army was focused on training soldiers to be excellent marksmen. However, a survey conducted during the Vietnam War showed that only 25% of the soldiers had fired at the enemy. The Army then changed the training objective to “killing skills” – six months later, they noted that 100% of the soldiers had fired at the enemy.
- It must be reasonable & unambiguous.
- Progress should be measurable in some way.
- It must be time specific.
The Surrogate Objective
Sometimes, measuring progress or the outcome can be difficult.Consider this scenario: It is well known that narrowing the arteries leads to cardiac problems. So to address this – we should find ways of reducing plaque build-up. We also know that elevated levels of cholesterol correlate directly to cardiac issues. If we set our objective as “reduce plaque build-up” and then try to implement measures to do so – there is no way to measure the success or failure of our actions. Therefore we settle for a “surrogate objective” – a different end-point that we can measure, i.e., to measure the cholesterol level – before and after any action we take. If progress is not measurable in some way, you will not be able to determine the effectiveness of your actions.
The Strategic Plan
Almost always, your particular objective is part of a larger strategic objective. Therefore, it is imperative that you consider the impact of this short-term objective – on the long-term strategic objective, and associated consequences. Too often, management forgets the big-picture!- Widening a particular road to ease traffic should consider the upstream and downstream roads
- Building an electrical power plant should be tied to the available distribution network
- A switch to bio-fuels should consider the impact on food stocks, and the total energy used
In conclusion...
We urge you to separate decision-making from problem-solving. Leave the task of problem-solving to the subject-matter experts – to domain experts. When you see – “we have a problem” – remember, you must first find plausible solutions before making an optimal decision. If you follow the holistic approach, you will reach an optimum decision always. The timing of the implementation of your decision will have a significant role in the outcome.
Errol Wirasinghe Ph.D.
Dr. Wirasinghe has over 25 years of experience in Optimization, Creative Thinking, Opportunity Seeking, Decision-Making, and Strategic Planning for Shell Oil Co., Petroleos de Venezuela, Abu Dhabi National Oil Co., British Gas, Williams, and Enron. As an Oil & Gas industry specialist and a University Professor, Wirasinghe has published papers on topics relating to Management, Engineering, and Economics.
www.XpertUS.com
Photo credit: Unsplash
