Tuesday, June 29, 2010

Decisions, Decisions

“A decision,” wrote author Fletcher Knebel, “is what a man makes when he can’t find anybody to serve on a committee.”

Committees and teamwork are often an essential part of decision-making, but even in that framework, each of us must sooner or later take our stand, knowing full well the range of potential consequences. In an organization, a decision-making process must often be open and auditable. We must know not only the decision we make, but also the process that led us to that decision.

Decisions often require tradeoffs. A perfect solution may not exist. Each potential choice may have a downside, or may be fraught with risk. In some ways, making the least bad choice out of a set of poor alternatives takes greater skill and courage than making a conventionally “good” decision. Napoleon Bonaparte observed, “Nothing is more difficult, and therefore more precious, than being able to decide.”

The outcome of a decision, whether positive or negative, is not in itself proof of the decision’s quality, especially where probability is concerned. The odds may be dramatically in favor of a positive outcome, yet the dice may come up boxcars. Equally, if someone makes a stupid decision but gets lucky, the decision is no less stupid in spite of a good outcome. A good decision process improves our odds and results in the desired outcome the majority of the time.

There are two types of complexity in decision-making. The first, and most obvious, is the technical complexity of the issue and the tradeoffs that may be required. The second, though not always openly addressed, is the organizational complexity: the number of people involved, the number of departments or workgroups that must be consulted, the existing relationships that shape communication among people and groups, the organizational culture, and the pressure of the political process.

Decisions also vary in their importance. Importance can be measured in terms of the consequences of the decision and the constraints imposed on the decision process. Critical decisions fall into three categories:

Time critical decisions must be made within a narrow window of time
Safety critical decisions have the potential for injury or death
Business/Financial critical decisions can affect the future or funding of the organization

At different times in the decision-making process, consider the opportunities as well as the negative consequences that can result both from the decision to act and from the decision to wait. If the consequences of a missed opportunity are greater, then the appropriate bias is in the direction of action. If an inappropriate decision could cause greater harm, the bias should fall in the direction of delay: gather more information and reassess.

Threats and opportunities both require proactive management, but opportunities even more so. Good luck and bad luck operate differently. If a person, say, loses $100, it’s gone, and all the consequences of that loss flow automatically. If, on the other hand, there’s a $100 bill somewhere in the area, it’s possible to miss it, there is no requirement to pick it up, and no obligation to spend it wisely. Exploiting opportunity requires observation, initiative, and wisdom.

Decisions must reflect goals. A successful project outcome is not necessarily an organizationally desirable outcome. Project managers and technical professionals must consider wider factors. Sometimes the right organizational decision involves hampering or even destroying the project.

Less than ideal circumstances are typically the reality. If there were more money, if the policies were different, if procedures didn’t require this item, the decision frame would be different—and so, likely, would be the decision itself. Generally, technical professionals prefer an emphasis on getting the job done correctly over meeting the schedule, but organizational circumstances may compel the latter.

When teams are involved in the decision, team decision-making considerations come into play. Conflict is not only inevitable, but if managed properly, desirable. The goal is to reach a consensus, which is not necessarily 100% agreement but rather a decision all team members can live with.

Compare the actual to the intended. If there is a discrepancy, the crucial question is “Why?” Knowing the actual results, would the team have done better with a different process? Should the process for future decisions be modified? Is there a trend in outcomes, especially in bad outcomes? If so, there may be process issues.

Thoughts adapted from “Decision Making,” by Michael Dobson et al., in Applied Project Management for Space Systems (Space Technology Series), McGraw-Hill, 2008.


  1. Hi, Just read your book. Would like ur advice on how to know/fix one's biases.



  2. Sharad,

    The best advice I have for managing one's own biases is self-awareness. It's not automatically wrong to be biased; what's dangerous is to be ignorant of one's own biases.

    We develop biases because they work most of the time. I'm biased toward being friendly to people, and most of the time that works out in my favor. From time to time, it doesn't. By being aware of the bias, I can do a better job of figuring out when I need to make an adjustment to my normal behavior.

    With perceptual biases like the Base Rate Fallacy (see the tag cloud), our minds get it wrong because we make logical leaps that are too great for the situation. Again, awareness helps.


    Michael Dobson