Decision-making: what do you know?
We like to believe that our decisions are rational, based on agreed facts, which we objectively weigh up when deciding where to invest, who to promote, or which markets to target. Yet this is rarely the case.
It’s the same in politics - my former vocation – and in the intelligence community, according to David Omand, former head of GCHQ. In his excellent book How Spies Think* he explains how an analytical framework can improve critical decision-making.
In this InSight I want to consider how to sort fact from fiction, when making decisions. There are three stages I want to reflect on: understanding what we don’t know, learning to judge ‘facts’; and recognising our own bias.
The Knowns and Unknowns
As a Government Minister I quickly learnt that many decisions have to be made without all the facts. People outside politics assume that senior politicians have far more resources, expertise and time available to them than is the reality. Yet, as the recent pandemic has shown, very often tough decisions must be made with incomplete information.
You may scoff that’s why so many duff political decisions are made, but in business and in life we often find ourselves needing to make a choice, based on partial knowledge. As Donald Rumsfeld famously put it
“There are known knowns, things we know that we know; and there are known unknowns, things that we know we don't know. But there are also unknown unknowns, things we do not know we don't know.”
Understanding that decisions will often have to be made with incomplete knowledge is an important first step for many leaders. The bigger the decision, the larger the consequences, the greater the inclination to delay that decision.
However, our knowledge will always be incomplete, even in the digital age, so we need to proceed by bringing an analytical approach: understanding what we need to know, understanding what else might impact on decisions made and being honest with ourselves about the limitations of our knowledge. This is not a recipe for inaction, it’s about having what Omand would describe as good ‘situational awareness’ – understanding the here and now, in our business, in our market and in the wider world.
Judging ‘facts’ – be a healthy sceptic
After the Trump Presidency we are all too familiar with the debate around ‘fake news’. Yet the explosion of digital information has meant that we all need to be more cautionary about what we see and hear. Wrong or misleading information isn’t new, but the internet has made its circulation easier and more authoritative. The burgeoning online conspiracy industry is a sad comment on people’s willingness to believe what they read on the Web.
“question the news - who is telling me this, what does it mean and why now?”
As a serving politician I learnt to question the news - who is telling me this, what does it mean and why now? Healthy scepticism is a useful trait when considering the information we have - about a competitor’s new service, the accuracy of new market data, or any causal links implied between events and our perception of the world.
I have had several coachee clients where the scope and quality of the data on which they rely has been a major cause of concern. Unlike politics this is less about a malevolent force creating fake news for advantage and more often about how to best judge the information available and the basis upon which that information has been assembled. There are no simple answers here, but its where leaders need to apply their own independent judgement.
Challenging our own bias
We all have a natural bias, whether it be emotional, cultural or historical. It colours our view of the world and can be as important a distortion of news, data and facts as any external factor.
One useful approach in coaching is applying the principles of Gestalt psychology. Developed in the 1920s by Fritz Perls, Gestalt work helps clients develop new insights about themselves.
For example, one of my coachees found it incredibly helpful when trying to resolve their troubled relationship with their CEO. The ‘Empty Chair’ technique requires two chairs – one occupied by the coachee, the other left empty, but representing the other person, in this case the CEO. What followed was a conversation in which the coachee first spoke to the CEO and then, seated in the other chair, replied as the CEO. The session proved hugely cathartic for that individual, helping them express the situation from both viewpoints and so help them resolve how to progress the actual relationship.
When making business decisions we therefore need to recognise the potential for individual bias and the existence of other viewpoints. Too often we have a fixed perception of the business, our colleagues, or the wider market, when we need to look at matters from other perspectives. Ensuring that we step back and take a different perspective is a good business habit.
Leaders need to ensure they and their teams challenge both the data and the decisions on which they are based. This is about having rigorous processes in place, but its also about the culture of the organisation and the leadership’s attitude to being challenged.
To conclude
So, to improve our decision making, we need to first recognise that we can never have complete information when making decisions; we need to bring healthy scepticism to all news and data, applying our own judgement; and we need to recognise and account for our own bias in how we see things.
*How Spies Think. Ten lessons in intelligence. David Omand. Viking Books
