Critical Decision Making
We make countless decisions every moment. But when it comes to important choices, coaching helps uncover exactly how our logical decision-making systems can work better.
Kevin McAlpin & Hans Vaagenes
Whatever kind of coaching you do, decision-making is often the most vital skill you can develop in your clients. Their ability to make the right decisions will directly correlate to their success.
So, what do you know about decision-making? The authors questioned many executives and coaches and found that their decision-making revolves around taking either a logical approach or an intuitive approach and for some even a mixture of both. Very few understand how they make their decisions. Ninety-nine per cent make their decisions out of their conscious knowledge in a way they always have. So, it would be valuable for you, as a coach, to know more about decision-making and to be able to help support your clients to make better decisions.
Choosing to Move
Decisions are about movement. They are the answer to the question ‘What do I do next?’ You move in order to interact – with people, the environment, and systems. So you need to have some idea of the types of interaction involved and the likely outcomes before you can ‘de-cide’ — literally kill off all options but one.
We are making decisions all the time, but because most of them happen automatically we don’t think about them. It is only when we have decision challenges that they come into conscious awareness.
The challenge is not how to become an expert decision-maker — you already are one. It is how to develop and use this superb system more effectively, particularly in the complex and time-critical situations executives have to deal with as a matter of course. What we have discovered is a number of very useful things about this decision system and how it works. The module will outline the underlying theory, confirm how it can be used in coaching, and give some examples of the great and not-so-great decisions.
The Four Parts of the Decision System
Your decision system is designed to keep you moving. This is the reason why we make decisions. Our emotions are what motivates us to move (’emotion’ comes from the Latin verb meaning ‘to move’).
We move for only one of four reasons:
- To get hold of or achieve something.
- To defend ourselves or what we have.
- To develop and maintain relationships with other people — that is, connect with them.
- To learn.
Therefore, decision challenges arise where:
- You are unclear about your criteria in each area, for example the type of relationship you want
- You have conflicts between the areas, for example making an investment could cause a conflict between the potential of achieving an income target versus the risk of losing money
- You get the goals muddled, for example trying to build a relationship with someone when you really want something from them
- You have a default reason and use it in inappropriate contexts, for example with the person who is always defensive
- You are doing things for other people’s reasons, not your own, giving rise to internal conflict.
Where these challenges persist, the result can be stress and activation of the basic fight, flight or freeze reaction as your deeper, unconscious decision mechanisms try to take over. How can you use this for yourself and your clients?
- Write down a decision with regard to which you have challenges. Which of the four goals will it satisfy? How will it do this? Are there any conflicts?
- Discuss this with someone and get their perspective. We are experts at fooling ourselves we are doing things for one reason when we are actually doing them for another.
Coaching the Right Decision
The value of coaching questions in decision-making cannot be underestimated. Important questions arise:
- Where am I now?
- Where is my goal?
- How do I get there? What options do I have?
- What resources do I need and how committed am I?
When making decisions, we need to be clear about the different environments we may be in. This is a way of standing back and understanding the wider context in which the decisions are being made. The three most important environments today are:
- Social — the world of people and relationships
- Technical — the area of expertise involving manipulating ‘things’
- Systems — how people and things interact.
Decision challenges can arise when:
- People use the wrong mode — thinking of people in organisations as things (technical), for example:
- There are many different options that can be used
- There are lots of stages and actions running in parallel with dependencies between them. How can you use this for yourself and your clients?
- Decide in which environment your decision exists
- Ask yourself or your client the four coaching questions
- Draw a map of the stages and routes involved in a decision you have to make. The stages are the key experiences involved, the routes are the actions that take you from one to the other.
What is Intuition?
More importantly, how do I know if I have it? Are you one of those people who still have LPs in the loft? Even though all your music is now on CDs, or your iPod? Can’t bear to throw them out? Worse still, have you actually listened to any recently? If so, it can come as a shock when you hear the sound quality compared to CD or MP3 players (I am excluding the real audiophiles from this, as I know LPs are the only way to properly hear the music).
LPs are an example of analogue information. The information is captured by carving a groove in vinyl from the vibrations of a needle. Simply reverse the process and you get the original sound back again.
The challenge is not how to become an expert decision maker — you already are one
Digital music and pictures are produced by chopping up the stream of information into discrete chunks that are then given a value. The benefit is that absolutely identical copies can be made of the information, and quality does not fall off during transmission. What we call intuition is the mind processing analogue information. It is operating like an entertainment centre that plays LPs and tapes. On top of this stack, the higher parts of the brain sit and do the digital stuff – much like adding an MP3 player to your existing system.
So why don’t we just process all information digitally? As always, nothing comes for free and digital processing comes at a price. All that digital equipment depends on enormous computing power, vast amounts of high-speed memory and rapid communication links.
Information has to be converted into digital format, processed, sped along high bandwidth lines, and then reconverted back to be useful. Our brains, very sensibly, use the analogue processing capability whenever possible, and leave the digital capacity for where it is really needed.
- Accurate storage, transmission and replication
- Sophisticated and powerful processing capability
- Narrow focus
- One-shot learning. Intuition (analogue)
- Capture a lot of information rapidly
- Ability to spot differences (this was how the existence of the planet Pluto was eventually confirmed)
- Wide focus
- Needs repeated experiences to develop flexibility of application.
Of course, this assumes that you can use the right player, the one that is most appropriate. But, more than likely, you are trying to force too much down the digital path and wondering why you are getting overwhelmed.
Most of the time, it’s not necessary to work things out logically. A survey conducted in May 2002 by executive search firm Christian & Timbers revealed that fully 45 per cent of corporate executives relied more on instinct than on facts and figures in running their businesses. Most people have experienced undertaking a lot of analysis only to find the answer just didn’t feel right, so they made the intuitive decision anyway, or made the logical decision only to find out it was wrong a few weeks later.
Great managers are skilled at using rational and intuitive decision-making in the most effective way. Research at Nanyang Business School in Singapore found the use of intuitive decision-making positively correlated with improved performance in an unstable environment but negatively related when stable. For most managers, this intuitively makes sense (doesn’t it?).
What you see going on around you is a good indication of what is going on in your head!
This is a good way to tap directly into the intuitive side of your brain.
You’ve probably thought about buying something, like a car, and then seen them all over the place. This is because thinking about something primes your sense to alert you when it spots an example of it. Your sense will also alert you to things that you are not consciously aware of, but that your unconscious mind is working on.
Annoyed by the person in the car in front who can’t make up their mind where they are going? Who does that remind you of?
Might it be the person spending loads of time getting information together and considering what they should do, when you know they are really just procrastinating because they are scared?
How can you use this? Reflect for yourself or ask your client the following:
- Think about things that have happened to you recently, or people around you. What has particularly caught your attention? What has caused an emotional reaction?
- What advice would you give those people? What if you followed your own advice?
When is a Decision Strategic?
As executive coaches, we often work in the realms of corporate strategy and strategic visions, so what is a strategic decision? Most people have some element of confusion as to when they are making normal decisions and when they are strategic.
A strategic decision is when —
- You can significantly redirect the system (remember the system could be you or your client)
- You can reorganise it. This requires you to stand outside the system and ensure you see it in context, taking a much wider range of issues, both internal and external, into account.
For example, at a personal level, a significant career change (type 1) or a lifestyle change (type 2) is a strategic decision. A decision to go to the gym more often is not.
A business example would be Tesco’s move into online shopping. It was clearly a strategic decision to open up a whole new delivery channel. Interestingly, they took a type 1 approach by utilising their existing infrastructure as far as possible, whereas the companies who tried a type 2 reorganisation largely failed.
Examples of Great (and not so Great) Decisions
- When IBM were looking for an operating system for their first PC, it seemed logical they would use a version of CP-M (then the most dominant system) from Digital Research (DR). When IBM called, the head of DR, Gary Kildall, was not there — it was later rumoured he was out flying his plane. However, a small software company, Microsoft, saw a real opportunity.
Although they did not even have an operating system at that time, they bought one written by someone else and arranged to present it to IBM. The night before the presentation it was still not working reliably. Rather than postpone, the Microsoft team stayed up all night to get it stable enough to present. The rest, as they say, is history, and it is unlikely Bill Gates regrets that particular decision.
- The famed magician Lafayette insisted that the pass door — the small door leading from the stalls into the wings – be kept locked during his performances, lest intruders discover the secrets of his illusions. When fire broke out on the stage of Edinburgh’s Empire Theatre on 9 May 1911, Lafayette rushed to the pass door, having forgotten that he had had it locked. Before he could make his way to the other exit, the stage was a raging sea of flame. Overcome by fumes, he fell unconscious to the floor. His body was later found, charred beyond recognition.
- In 1998 Google co-founders Sergey Brin and Larry Page approached Yahoo.com and suggested a merger. Yahoo, who could have snapped up the company for a handful of stock, suggested that the young Googlers keep working on their little school project and come back when they had grown up. Within five years, Google had an estimated market capitalisation of $20 billion.
- When Thor Heyerdahl first offered Kon-Tiki to publishers, few imagined that there would be much public interest in a scientific voyage on a raft across the Pacific Ocean. One publisher asked hopefully, ‘Did anyone drown?’ Heyerdahl explained that, while he and his five companions were tired when they landed on a Polynesian reef after 101 days at sea, they were otherwise fine – and was promptly shown the door. Of course, Heyerdahl did eventually find a publisher. Kon-Tiki sold more than 30 million copies and was translated into some 67 languages.
The Right Choices = The Right Outcomes
The amount of strategic decisions leaders, managers and executives must make daily is estimated to be around 50-100. Getting decisions wrong can be costly for all, understanding the mechanics of decision-making and strategies to make the right choices is critical.
Explore our Wise Decisions Programme
Based on the 4-driver motivation theory. See Paul R Lawrence and Nitin Nohria, Driven: How Human Nature shapes our Choices, Jossey Bass Wiley, 2002.