Making Complex Decision

“…when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.”  Daniel Kahneman, Thinking, Fast and Slow

In the midst of the pandemic, we have and will continue to face numerous complex decisions where there are many unknowns and no clear choices.  Organizations and individuals are grappling with challenging issues.  What is safe?  How long can we stay quarantined or closed?  

These questions are particularly challenging because of their potential life-or-death consequences.  Unfortunately, our regular decision-making practices will not help.  We will try to simplify matters rather than confronting the difficult questions.  When addressing complex problems, we should:

• Recognize the situation;
• Engage logical thinking; 
• Use different tools; and
• Plan to adjust.

Recognize the Situation

Decision-theory identifies three types of problems: simple, complicated, and complex.  

Simple problems are quickly answered with binary (yes/no) choices.  These problems are often solved by instinct and do not require analytic thinking.  Research indicates that 71% of all significant corporate decisions are binary.  For example, getting tested after being exposed to COVID should be a simple, “yes.”

Complicated problems can be addressed by deconstructing the issue into solvable smaller ones and aggregating the results into an overall strategy.  This is a common approach used in project management and other disciplines.  Reconfiguring the workplace for employees requires significant planning and coordination, but these are easily solved logistics issues.

Complex problems are fundamentally different.  There are many unknowns, intersecting questions, and external factors to consider.  It is impossible to forecast the cascading impacts a given decision.  When and under what circumstances to return to work is a complex problem.  

Engage Logical Thinking

We need to actively engage our analytic brains, rather than allowing our instincts to prevail.  Discussions surrounding COVID naturally invoke a flight-or-fight response.  I have observed leaders declare they have “a zero-risk tolerance.” While I appreciated the sentiment, we expose ourselves to risks every day.  Accidental injuries are the third leading cause of death in the United States.  

To facilitate thoughtful discussions that engage logical thinking, we can:

1. Present a range of options.  Rather than presenting people with a series of binary choices, have them select from 3-5 reasonable options.  
2. Avoid abstract discussions.  Do not ask people to describe their “risk tolerance” or “comfort level” without providing them with meaningful measures to guide that conversation.  Financial advisors gauge investors' risk tolerance by examining how they respond to various changing market conditions.  
3. Avoid brain fatigue.  Our brains are muscles.  When they get tired, we stop engaging our logical minds.  We should tackle critical issues when we are fresh.  Hold important meetings at the beginning of the day and place critical decisions at the top of the meeting agenda.  A study of judges found they made more thoughtful decisions at the beginning of the day or after breaks.
4. Create time for reflection between evaluating information and making subsequent decisions.  Schedule a 10 or 15-minute break, for decision-makers to review the data and contemplate the options, before responding.  

Use Different Tools

Behavioral economics has demonstrated that people are not rational actors.  Most of our decisions are instinctual, made quickly, and do not invoke our logical brains.  To thoughtfully respond to complexity, we need to engage both creative and logical thinking.   The following decision-making and facilitation techniques will lead to better solutions:

Consider a Range of Options

For simple and complicated problems, we can commit to a single path using point-based decision making.  For complex problems, we should use set-based decision making, where we consider a range of potential solutions, and commit at the last responsible moment.  

Set-based decision-making preserves options.  We can learn from our actions and continue to evaluate alternatives. This allows us to quickly adjust when circumstances change.   Research indicates that the optimal number of scenarios is 3-5; too many options overwhelm the brain.

For example, we might identify five options for returning to work.  The choices may be bracketed between the status quo and the pre-COOVID environment.  We could then envision 2-3 additional scenarios within those boundaries.  

Structured Brainstorming

Creative and analytical thinking engage different regions of the brain, and the brain cannot quickly shift between these two modes.  We should use structured brainstorming techniques to generate and prioritize many ideas.  Categorization and prioritization frameworks can be used to assess the options quickly. The nominal group technique is a common and effective tool.    

Separating the creative and analytic processes allows us to avoid the common trap of identifying and over-analyzing only a few options.  A well-facilitated session can generate dozens of ideas in less than an hour.  

Plan to Adjust

The contours of complex problems are continually evolving.  Adopting a plan-do-check-act (PDCA) mindset creates the opportunity to experiment, learn, and adjust to the environment.  This model was adapted for Air Force combat pilots (OODA Loops) and is the foundation of the Lean Startup Model.  The essence of these models is incorporating a continuous feedback loop into the ongoing decision-making process.

Lessons from the Lean Startup that are relevant to guiding us through complex decision making include:

Experimenting and Prototyping

We should plan to conduct multiple experiments, rather than spending significant effort developing the “right” solution.  The purpose of these trials is to increase our learning to inform future decision-making.  Many of these explorations are expected to “fail,” which is a source of valuable information.  

Split Testing

Split testing, also known as A/B testing, is a concept from online application development where different groups of consumers are presented with a different set of screen options.  Data is collected to see which path is more effective.  A/B testing usually starts with a limited sample and expands if successful.

Split testing gives us the ability to accelerate experimentation.   We can run multiple experiments, collect results, and quickly analyze the outcomes.  More than 140 COVID vaccines are currently being developed and tested, which increases the likelihood that an effective vaccine will be found sooner.  

Actionable Metrics

As Deming said, “without data, you are just another guy with an opinion.”  Collecting and using data to make decisions is critical.  We should understand our definition of “success” and collect metrics that will allow us to evaluate our performance.  Fact-based discussions are more constructive and yield better decisions.  They move us away from simple, binary choices and force us to engage our analytic brains. 

Pivoting

In basketball, pivoting is keeping one foot grounded and changing directions.  Here, we want to stay grounded in what is working well and pivot—adjusting and evolving—based on what we have learned.  Many well know companies have successfully shifted their strategy based on what they have learned about their customers and the marketplace.

In addressing complex problems, we need to regularly evaluate and adjust our strategy based on circumstances and the knowledge we have gained.  Embracing these concepts builds an adaptive organizational culture.  People feel encouraged and empowered to question the status quo and change.  

Recognizing that we inhabit a volatile and uncertain environment requires us to develop new skills and organizational muscle-memory.  Unconcisely avoiding simple answers is the first step.  Our ability to recognize complexity, select the right tools, continually assess the situation, and adapt will help our organizations become more robust. 

? 2020, Alan Zucker; Project Management Essentials, LLC

To learn more about our training and consulting services, or to subscribe to our Newsletter, visit our website: www.pmessentials.us.

Related Project Management Essentials articles:

• Conducting a Successful Brainstorming Meeting
• Decision Making: 6 Ways to be More Effective
• Project Status is Subjective: Linguistic and Cognitive Bias

Image courtesy of: medicalexpress.com