Many paradigms of decision making

Making a decision is a part of the broader subject of problem solving, although the management science approach can be used to construct a mathematical model, it is useless if the result is too complex to be communicated to the decision maker.

Even the most analytical decision techniques need intuition to make them work - balancing conflicting goals, visualising possible outcomes, coming up with alternatives, considering the intangibles.

One needs time to reflect and introspect in order to acquire vital abilities: objectivity, learning, self-confidence, responsibility, tolerance for ambiguity and paradox, balance in life, creativity and intuition, and subjugation of self-esteem. All these are needed. It could be ‘innovation’ or ‘creativity’ which provides the mutation that evolution demands. The real danger is when we ‘sit back’ and hope that evolution will do for us what we find difficult to do for ourselves! But you should know that if you do not invest in innovation and creativity, you are going to be operating way below the opportunity level.

The complexity of today’s business operations, recessions, aggressive competition, and government controls, has made the job of a manager increasingly difficult. It is no longer possible for an individual to be aware of the details of every characteristic of the firm or to make all decisions regarding its operation. Even within a manager’s relatively small span of control, the factors affecting his decisions are often so numerous and their effects so pervasive that “seat of the pants” decisions are no longer acceptable. As a result, effective decision making often requires the availability of information analysed and summarised in a timely fashion.

Surprisingly, sometimes the analytical can help the intuition. Time and again people will be stymied by a choice and intuition is stuck bouncing around among the alternatives. Then they go through some rational decision process to choose one alternative. They pay attention to their feelings during the process. Thinking that they are rooting for one alternative to win? Will they be pleased or disappointed over the choice? This technique often helps them dredge up feelings that were not evident at the outset.

Often, managers will spend more time on comparing the alternatives than they will on coming up with them. Broadly speaking, there are two types of thinking involved in every decision making - divergent and convergent. Divergent thinking requires an open mind and imagination and is good for coming up with possible alternatives.

Convergent thinking is critical and analytical and is good for selecting from possible alternatives. People are usually better in one type of thinking than the other, and so tend to favour one. Business people tend to be more comfortable with convergent thinking, and so select alternatives quickly and narrowly.

Besides the above, managers have a speckled range of decision making styles. Some use their intuition; others are keen on hard evidence. Some shoot from the hip and ask questions later; others are reflective and slow to make decisions. But there is one style disparity that needs highlighting and that is whether the managers make decisions on a methodical, sequential basis or whether they prefer to experiment and improvise. Methodical thinkers are common at the top of organisations and their approach to making decisions is effective when the main priority is efficient execution. However, wherever innovation is essential for competitive advantage, a supplementary experimental decision making style is more appropriate.

Making business decisions methodically means being as close to 100 per cent sure of what you want to do before taking action. At the extreme are perfectionists who will not take a step until they are absolutely sure that they have made the right decision. The process for making such decisions is sequential. Take a look at the facts, scrutinise alternatives, think carefully what you want, choose an option and then implement it. Such a structured approach is logical and rational.

The other example is structured, rational way or by trial and error. Here the innovation calls for more of the latter even if it seems less rational. Another example of making management decisions on a trial and error basis is when a software company releases a beta version of new software. It is not fully ready for general use, but a small group of users try out the beta version and give the software company feedback on how it is working. As feedback rolls in, the software is repeatedly refined until the beta users are satisfied with it. Here the decisions are being made based on trial and error than we realise. Any time, you start down a particular track and change course en-route; you are making decisions through improvisation. Most of the innovation occurs in this manner.

Wise decisions are those that are made using a definite process. They are based on the values and perceptions of the decision-maker and include carefully considered alternatives and options along with periodic reassessments of the decision and its effects. Wise decisions may or may not follow societal norms and expectations.

However, they are right for the decider based on what he knows at that point of time about both his options as well. However intelligent a person may be, the capacity of perception and application has its own limits, in making the decisions effectively and structured processing, the ‘alternatives and their possible consequences can be created and explored more fully and intelligently, without the debate becoming divisive, unfocused and unprofessional’.

Paradoxically, no one can prove to you that there is a better way of doing something until that better way has been found, demonstrated and proved. There has to be a ‘belief’ that changes for the better is possible. It is possible to show mathematically that making a decision is essential in any organisation; otherwise we get locked into stable states that are far from optimal. At this point making a decision is no longer a ‘belief’, but becomes essential.

In this turbulent new world, where irrelevance may be a bigger risk than inefficiency, we will need to continuously re-evaluate and reinvent – maybe even get revolutionary. As the business has become increasingly complex, the decision making style has become a liability, because too much is unknown and fast changing. The actions of customers and competitors are unpredictable. Ultimately, the management decisions making style is nothing but the manufacturing mindset, which means deciding what customers want and trying to sell it without input from them which has lead to decide individually in isolation from rest of the real world. And the world of business is too dynamic to make decisions.

There are no alternatives, you take what you have learned frompast experiences and constantly add to it, and it is good to inculcate this habit and adapt to innovative methods. Any method, for that matter is not going to be a ‘Gospel’; it has to be thrown out in due course,  And things always evolve.

(The author is a free-lance writer in the field of HR)