“Even smart people in clever organizations make bad decisions." -- Paul Nutt, a management professor at The Ohio State University
Half of your decisions are a success.
Half of your decisions are a failure.
Based on his research, Professor Nutt has determined you are just as likely to make a failed decision as a successful decision.
A primary culprit of generating failed decisions is a half-hearted or limited search for alternatives during the decision-making process. Many executives end up selecting from a limited pool of options, decreasing their odds of making the best possible decision.
Steven Johnson, author of Farsighted: How We Make the Decisions That Matter the Most, has explored Nutt's research and found many executives fail in the decision-making process by failing to generate alternative outcomes and scenarios.
Nutt collected real-world decisions where he analyzed 78 decisions made by senior managers at a range of public and private organizations: insurance companies, government departments, hospitals, advice for hire firms, etc.
According to Johnson, the most striking finding in Nutt’s research was this: Only 15 percent of the decisions he studied involved a stage where the decision makers actively sought out a new option beyond the initial choices on the table. In a later study, he found that only 29 percent of organizational decision makers contemplated more than one alternative.
This turns out to be a lousy strategy for decision making.
Executives often feel compelled to “grab the first feasible choice that comes along, cram it down everyone else’s throats, point to data that supports the choice, and then battle resistance when they try to implement it,” Nutt says.
It turns out there is a strong correlation between the number of alternatives deliberated and the ultimate success of the decision itself.
Why do smart people from clever organizations rush to judgment and clinging stubbornly to one set of ideas?
Blame mythology, emotion, ego, and lack of process.
The mythology of the successful businessperson demands they succeed regardless of the stakes, often by taking rapid and decisive action. The mythology of success placed on businesspeople creates an environment where failure is not an option thus forcing decisions to be executed rapidly and cover up mistakes.
The emotion of making a swift decision makes executives feel good. Decisions made generate the high of deciding. Unfortunately, these decisions are often made without clearly exploring all outcomes and scenarios. In reality, most decisions made do not need to be quick. Executives have more time to choose than they realize. Thinking about a decision could be the best decision an executive makes.
For many executives, especially entrepreneurs and thought leaders, they come from the rugged individual mindset. People from this mindset ask for little support, need little outside motivation, and have worked solo successfully for years by just doing and executing. Shaped by a self-supported ego, such executives usually propose a self-serving idea and then quickly move to get endorsements for the self-supporting idea.
Here are some tactics to create a process to shape your next big choice:
1. Don't be too decisive: Even Barack Obama had chosen to sleep on his decision before he authorized the raid that killed Osama bin Laden.
2. Involve other perspectives: Retired Army general Stanley McChrystal reminds executives they have access to the answer, but the answer is often locked up in different parts of the company that executives can’t or won't interconnect.
3. Visualize the inverse of what a successful outcome looks like: Famously before one of the greatest endings in Michigan State - Michigan college football history, my seatmate asked, "What could go wrong?" Well, a lot. In 2015, Michigan led 23-21 and just needed to punt the ball away to win. However, the Wolverines mishandled the snap, and the Spartans ran it back for a touchdown as time expired to win 27-23. Hard to imagine any Michigan coach, player, or fan envisioning such an ending. If they did, Michigan not punting the ball might have been the best outcome to ensure victory.
4: Don't ask how, ask who: Don't learn how to do something, ask the best expert on the subject what they would do.
5. Consider three different outcomes: By making this decision, ask yourself what the possible, preferable, and probable outcomes are. Predicting one successful answer is tough - identifying three outcomes is easier.
Your decision, it's probably right.
-- Marc A. Ross
Marc A. Ross is the founder of Brigadoon and specializes in thought leader communications and events for senior executives working at the intersection of globalization, disruption, and politics.