Updated: May 16, 2022
Defining The Decision-Making Process
Let’s take a deep dive into defining decision-making. It’s important to understand what a decision is and the most important aspects of a decision. Let’s discuss its definition, a decision is, “a choice about either a course of action, a strategy of action, or an option that leads in the direction of a desired objective, whether the ultimate outcome matches this or not.” The key point I’d like to address is that decisions are the choices that we make. One of the things necessary for us to make good decisions are good options (there must be good options). Most of the time, we choose false options. Many times, with false options, we’ll try to come up with a solution and the decision becomes whether or not we’ll use the solution; this is the wrong way to handle decision-making. The way you define a decision drastically affects all the activities you do because of it.
For instance, if the decision is whether to live in Cleveland, Ohio or not, I may choose to live there because it’s cheap. However, if the decision is to choose the best location for the work environment, California is close to full employment, whereas Ohio has one of the highest rates of unemployment. If you’re an IT, you basically rule over California but there’s hardly any work for an IT in Ohio. To further explain, it’s important to describe the context when making decisions. When you’re making decisions in the real world, with problems you encounter, our view of the world (we all have one) determines the actions that we take and the actions that we take determine the results that we’ll get. The results that we achieve help us form a picture, mental models about how the world works. From those mental models, we develop rules about how we should make decisions and from those rules we make decisions themselves. This is a cycle.
Phasing Out Standard Performance Management
The thing is, you can influence the decisions made if you concentrate on the mental models developed. In many cases, if you want to improve decision-making, the key isn’t in monitoring the decisions (to make sure there are limited options). The best way to influence decisions is to make sure the people making decisions (also known as knowledge workers) have the right worldview/perspective. If we can tackle the perspective, it will change the rules that influence decision-making. This is how everything works in context. Here’s the thing, there are decisions that are conclusions that we make about something; they’re judgment calls. There are many things that influence the judgment calls that we make.
"If you don't drive your business, you will be driven out of business." - B. C. Forbes
In our witch's pot (pictured below), the things written in red are considered to negatively influence our decisions. There are distractions, irrelevant data, biases from people who aren’t relevant to the decisions, and people involved who aren’t experts for the decision we need to make. We also have fears pertaining to the results of the decision and biases; more distractions we’d like to get rid of. Next, in brown, we see things that (depending on how it’s set up), could be good or bad. For the first item in brown, we have, “The Number of Choices,” if the number of choices is two or below, it hinders decision-making. What you want for good decision-making is at least three or more decisions (choices). However, once you reach about seven, then it becomes too complex and hinders decision-making. So the spread is from 3-7.
The other item we have in brown is “Standards.” By definition, standards are the principles or norms that are agreed upon by a group of people, an organization, an industry, etc. (whoever you work with). The reason standards are important is because there are some that will help you to communicate, understand the context, and make better decisions. However, there are some standards that may not be accurate.
Here’s an example for a standard that isn’t helpful; our basic meeting agenda. A basic meeting is about 60 minutes. But 60 minutes is too long to discuss a topic because people fill it in with other information. In the agenda, we usually include people that make the decisions, people who own the decisions, people who might be concerned about the decisions, and people who want to hear about the decisions. If you’re trying to make a decision in the meeting, the people who need to know about it (if absent) should be informed and any people who may influence the decision. But sometimes there are too many people, all with their own opinions (who may or may not be experts). It may be standard to include this many people but including them is not helpful; it makes it easier to veer off topic and then nothing gets accomplished. Due to the format we use and our principles that we have around meetings, most of our meetings aren't helpful. Still, there are standards that are helpful.
"The measure of success is not whether you have a tough problem to deal with, but whether it's the same problem you had last year." - John Foster Dulles
Components of The Decision-Making Process
I’d like to promote a meeting format composed of four components:
outcomes, assumptions, hypotheses, and outputs/activities (this is a much better format.)
The lettering in green (in the picture above) are the things that help make decisions, they act as ingredients, such as “Decision Context.” Decision context are the things around the decision that help make decisions. As part of the decision context, I propose this format because it gives you the context you need.
Outcomes are the goals you want to achieve, it represents what it is you wish to accomplish.
Figure out what decisions help move you closer to your goal. That context is helpful and quite important.
Assumptions are the mental models used to make decisions.
But not all assumptions are true, the ones that aren’t true aren’t helping us make the right decisions.
Having a hypothesis you can test is very important, it helps provide the necessary context.
In addition, in the decision-making process, our ability to assess the value of consequences is another ingredient important for decision-making. Anyhow, our ability to do so is generally poor, which is why we make poor decisions. The ability to assess the risk involved with different choices is another important ingredient for decision-making. Again, also something that we perform poorly when we try to implement decision-making. When thinking of ways to improve your decision-making and how to manage it, it is important to think about how to manage these components. At Bridgeport Digital, we use this process along the groups in our company, aligning everyone with the same components for decision-making.
Inquiry on Decision-Making
After each member of the team shares their mental models, only one member of the team decides what hypotheses to test based on their perspective.
How do you think you could implement what you have learned about the decision-making process in your own work place?