The Art of Critical Decision Making

Thanks to the local thrift store and eBay, I have acquired a growing selection of DVDs and books from The Great Courses company, which produces college-level, non-credit video and audio courses taught by university professors and subject-matter experts. But like most of my books and media, I have not taken the time to utilize them. They sit and collect dust. . .until today — I have decided to dedicate 30-day periods to each subject in hopes of actually retaining the information and utilizing it where I can.

I have chosen to start with The Art of Critical Decision making. Going forward, I will attempt to repackage my learnings and publish them here, almost as a lesson, with the idea being that teaching can often improve learning.

If you’re interested in learning about this subject along with me, stick around.

The Art of Critical Decision Making

Purpose of this course:

Is to help us understand how to diagnose our process of decision making, as well as how to enhance those processes going forward.

In most cases, differences in intellectual capability to not help differentiate success from failure when it comes to complex, high-stakes decisions. Even great leaders have stumbled when it comes to the social, emotional, and political dynamics of decision making. Even the most intelligent person in the room can fall into cognitive traps, regardless of intellect or expertise in a particular field.

There are a number of incorrect beliefs or myths about how decisions are made in groups and organizations that limit our understanding of decision making in general. By clearing these myths up, we can begin to learn how to improve our own decision-making capabilities.

5 myths

1. The chief executive decides

   • Reality: You cannot look only to the CEO to understand why a company made a decision. Strategic decision making entails simultaneous activity by people at multiple levels of the orginization.

2. Decisions are made in the room

   • Reality: Most of the real work occurs in one-on-one conversations and small subgroup settings. The purpose of formal staff meetings is usually to ratify decisions that have already been made.

3. Decisions are largely intellectual exercises

   • Reality: high-stakes decisions are often complex social, emotional, and political process. Social pressures for conformity and human’s natural desire to belong affect and distort decision making. Political behaviors also play an important role in organizational decision making.

4. Managers analyze and then decide

   • Reality: Strategic decisions often unfold in a nonlinear fashion, before managers define problems or analyze alternatives. Sometimes, solutions go in search of problems to solve.

5. Managers decide and then act

   • We often take some actions, make sense of those actions, and then make decisions about how we want to move forward.

To understand how decisions occur, and what can go wrong when we make critical choices, we have to understand decision making at three levels of analysis:

1. Individual

   • At the individual level, we must understand how the mind works. Sometimes our mind plays tricks. Sometimes we make biased judgements. On other occasions, our intuition proves quite accurate. We make poor decisions because of cognitive biases such as the sunk-cost effect. Our intuition can be very powerful, but at times, we make mistakes as we match what we are seeing from patterns of our past.

2. Group

   • At a group level, we have to understand why teams do not always make better decisions than individuals. To understand group decision making failures, we have to examine problems that groups encounter such as social pressure conformity.

3. Organizational

   • At the organizational level, we have to understand how structure, systems, and culture shape the decisions that we make. We do not make decisions in a vacuum. Our environment shapes how we think, how we interact with those around us, and how we make judgements. Organizational forces can distort information that we receive, the interpretations of those data, and the way that communication takes place (or does not take place) among people with relevant expertise.

Do not think of decisions as events, think of them a processes. Decisions involve processes that take place inside the minds of individuals, within groups, and across units of complex organizations. Many leaders focus on finding the right solutions to problems rather than thinking carefully about what process they should employ to make key decisions.

When confronted with a tough issue, we focus on the question, “What decision should I make?” We should first ask, “how should I go about making this decision?”

This is known as process-centric learning (changing how we make decisions) rather than just content-centric learning (changing what we decide about something specifically). Process-centric learning transfers to every future decision; content-centric learning often doesn’t.

Below is a historical example of process-centric vs content-centric learning.

The Defining Case: Bay of Pigs vs. Cuban Missile Crisis

Kennedy’s team for the 1961 Bay of Pigs invasion was, by any measure, brilliant — yet the decision process was deeply flawed: CIA advocates controlled the flow of information, dissenting State Department voices were excluded, deference to “experts” went unchallenged, and a false sense of consensus prevailed. The result was a catastrophic failure.

After the failure, Kennedy didn’t just learn a lesson about Cuba — he redesigned his decision-making process. During the 1962 Cuban Missile Crisis he:

• Abandoned formal rank and protocol in meetings.

• Asked advisers to act as “skeptical generalists” rather than departmental advocates.

• Brought in outside experts and lower-level officials for fresh perspectives.

• Split advisers into two subgroups to develop competing plans (air strike vs. blockade) and critique each other.

• Assigned his brother Robert Kennedy and Ted Sorensen as devil’s advocates to challenge every assumption.

• Deliberately stayed away from many preliminary meetings so people would speak freely.

• Insisted on hearing arguments for multiple courses of action rather than a single recommendation.

The lesson: Kennedy engaged in process-centric learning (changing how he made decisions) rather than just content-centric learning (changing what he’d decide about Cuba specifically).

Suggested reading to better understand this Subject:

Harrison, The Managerial Decision-Making Process

Roberto, Why Great Leaders Don’t Take Yes for an Answer