Decision Making

Let us start with a strong and perhaps bold assertion, based on Richard Barber’s tremendous work on systemic risk management.

“The greatest risk to an organisation is the quality of its decision-making!” 

The standard risk management approach assumes ALL risks can be identified, placed in a matrix, be allocated a pretty colour and by some magical process risks are “managed”.  How many organisations have risk matrices or risk registers where the quality of decision-making is mentioned? I would think only a few. There are a few that I know of, but only because they have worked with Richard and have been made aware of how narrow their view of risk has been.

If the quality of decision-making is the organisations greatest risk, then it is by default the greatest point of leverage for success. So how can an organisation support its leaders in making better decisions? Well for starters, a helpful decision making model will certainly go a long way.

Depending on the domain you are operating in (using the Cynefin framework as reference) there might be multiple plans or approaches  (A, B, or C) that are equally as good. It is the role of the leader to make the decision on which plan to proceed with. I have deliberately used the work leader here, as the Manager might not be the one leading the task. How that plan is developed with the contribution of the team is explained in the decision making model below.

Before I get to the model some assumptions about participative decision-making must be made explicit.  The model is based on the idea that better decisions are made when:

• We assume that everyone on the team (and others) can add unique insights to the situation.
• Challenging our assumptions can lead to unique and powerful outcomes and is therefore a valuable contribution.
• Spending time and effort into really understanding the nature of the problem is critical.
• Options, ideas and critical issues are explored openly as part of the process.
• Good use is made of both analysis and intuition.
• The leader is clear about the final decision and their accountability for it.

SETED  – A participative leadership decision-making model

• Share Context and Purpose
• Explore Critical Issues
• Test Mental Models and Assumptions
• Explore Options
• Decide on Option

Share Context and Purpose

Context aims at setting the scene and provide clarity about what brought about the task, linkages to other tasks, and anything that could in any substantive way influence what we are trying to achieve. Depending on the size of the task at hand the context could vary in length and detail. Sometimes there is already shared understanding of the context but it is a good habit to always check this by assuming it is not.

The purpose is the reason for the work – not the work itself. It clarifies why we are we doing this and what do we hope to achieve by doing so?

Effective leadership behaviours at this stage include:

• Taking the time to brief others properly.
• Inviting questions and alternate views about the context.  Listening and reflecting.
• Using dialogue to make sure the purpose makes sense to everyone, in the same way.
• Avoiding setting filters or limiting exploration.
• Making sure context and purpose are well understood before moving on to the next stage.

Explore Critical Issues

Critical issues are also known as showstoppers or challenges that unless resolved threatens the purpose.  They are different from constraints, as constraints are already known.  Critical issues are not certain and need be identified so that you can develop actions to address them – contingency planning.

A good way to frame Critical issues is to use the language of “What if…” and “How to…” The reason for this is to depersonalise the issue raised and to objectively analyse it. It is really good practice to develop the skills to identify critical issues as it can push the thinking to a higher level.  It may take a few iterations before you reach clarity of an issue.

Identifying and understanding critical issues a step that differentiates this particular model from many others. It is also the most difficult step to do well.  Part of the problem is that people want to move quickly to solution (ready-fire-aim) and become frustrated when asked to continue exploring critical issues.

This jump to action mentality is often very destructive and can create unintended consequences that due to the delay (see fixes that fail system archetype) are not connected and the hero fire-fighter can come save the day and get promoted even though they might have caused it. Unfortunately for the careful planner, diligent in planning for critical issues and with few or no fires, the reward is little, or no recognition.

Effective leadership at this stage behaviours include:

• Staying in the “critical issues” stage until certain that there are no more to identify (at this point in time). Remaining disciplined, strong – avoid moving to solution too early.
• Exploring views, inviting different thinking, challenging assumptions.  Listening, reflecting.
• Seeking analysis, maverick views, and independent opinions – anything that might open new possibilities.
• Matching the effort to the complexity and value of the challenge.
• Ensure that critical issues and associated ideas are documented.

Test Mental Models and Assumptions

Mental models are “rules” we unconsciously apply to make it easy to make rapid decisions in familiar situations.

Assumptions are beliefs we apply without testing.

Effective leadership behaviours at this stage include:

• Accepting that everyone has limiting mental models and make untested assumptions.
• Valuing and exploring the perceptions and ideas of others even when they seem to be a ‘misfit’ to what we believe is possible.
• Explicitly acknowledging and discussing assumptions and mental models and use conversation to try to generate new insights.
• Reviewing the impact of identified assumptions on critical issues, context and purpose.
• Actively listening to what everyone is saying and encouraging different views.

Michael Stange, a fellow Sydney Lean Coffee member  mentioned how he had his team view their assumptions from a different perspective. They had all written down the things they took for granted for a specific project. They were then asked to negate all those assumptions to see if that brought about any new critical issues. This could be a simple yet powerful method to get the ball rolling.

Image courtesy of Gaping Void

There is a possibility that this stage can identify that you are trying to address the wrong issue. This is of course a very powerful insight but often this stage is not even in the back of minds of people.

Edward de Bono’s Six Thinking Hats is another process used to generate deeper insights and better decisions.

  

Explore Options

By Options here I refer to the possible approaches or parts of approaches to dealing with the critical issues and the activities that need to be completed to deliver on the task.

Effective leadership behaviours at this stage include:

• Getting organised to capture ideas, possibilities, and options
• Listening to and exploring ideas
• Probing the views, concerns and ideas of all stakeholders
• Building an overall approach, strategy or theme and testing it with others
• Critical review, testing and challenging even of obvious options
• Continually bringing people back to solving the critical issues
• Reflecting on and adapting the purpose and critical issues, as new insights come to light

 

Decide on Option

With multiple options or pathways available someone has to make a decision on which option to proceed with. Obviously my view is that the person accountable makes this call and in doing so accepts to be held to account for judgments and behaviours exercised when delivering on the task.

The decision making model is a tool that both leader and team member can refer back to if either is concerned the team is getting off track. Furthermore, not all decisions require participation and input from the team. The leader has to exercise judgement depending on the specific circumstances surrounding the decision.

Before I move on to a Task Assignment model, let me be very clear. The model above does not assume that the leader or Manager makes ALL decisions, far from it in fact, what is can do is support a social process of decision making. It is aligned with a view of organisations that believes that decisions in general should be made at the lowest possible level.

The decision making model is linked to the Task Assignment model as the options or plan will contain tasks that need to be clarified and assigned. When a task has been assigned (and accepted) a decision has to be made on how to deliver on the task.

Systems Leadership Theory consider this the work, i.e. working out the how and work is subsequently defined as “turning intention into reality”.

As this post ended up being longer than anticipated, I will continue with the Task Assignment Model and work as a social process in the next post.