Decision Making

DECISION MAKING

CA.S.Natanagopal

Chartered Accountant

E-mail: natan@ganeshprasad.com;

Queer sense of relief and shame, which comes to those who make sensible decisions. – Stephen Vincent Bennet in Western Star. While between two stools, my tail goes to the ground. – John Heywood Proverb

There is no more miserable human being than one in whom nothing is habitual but indecision. – William James in Psychology

Yes and no and may be and may be not – Edward Noyce Wescot in David Harum.

There is nothing more to be esteemed than a manly firmness and decision of character. I like a person who knows his own mind and sticks to it; who sees at once what, in given circumstances, is to be done, and does it – Hazlitt.

 When we can say `no’ not only to things that are wrong and sinful, but also to things pleasant, profitable and good, which hinder and clog our grand duties and our chief work, we shall understand more fully what life is worth, and how to make the most of it. – C.A.Stoddard

 I hate to see things done by halves, if it be right. Do it boldly, if it be wrong leave it undone. – Gilpin.

Men must be decided on what they will not do, and they are able to act with vigor in what they ought to do. – Mencius.

The block of granite, which was an obstacle in the pathway of the weak, becomes a stepping-stone in the pathway of the strong. – Carlyle.

It is a poor and disgraceful thing not to be able to reply, with some degree of certainty, to the simple questions, ‘What will you be’? “What will you do”? – John Foster.

Topic significance:

Slow decision-making is the greatest organizational problem everywhere.

People are too timid because often they imagine that fewer controversial decisions they make, the less chance there will be of being responsible for wrong ones.

Wherever there is conflict, people tend to defer decisions, preferring unanimity.

Character of good decision:

Decision-making must be responsible, specific, clear-cut, unequivocal and not a subject matter of confusion, evasion or timidity

  • Benefits:
  • Increased Learning and personal Growth:

When you make decisions, you have to think. You also have to learn about the underlying issues and make up your mind about the outcomes – you GROW.

  • Increased Challenge and autonomy:

People who confront problems and create solutions tend to be more motivated to improve their work and feel responsible for that work and take steps toward becoming more autonomous.

  • Increased Understanding of the big picture:

When you are involved in decision-making you develop a better understanding of other decisions made around you. You understand the difficulties and trade-offs of choosing between conflicting options.

  • Better Results:

                Since most decision involve the above process it should definitely yield better

                 RESULTS

Decision making Procedures:

Considerable activity should precede the making of a decision. Various alternatives should be analyzed. Decision should only be the conclusion of the whole activity.We hunches cannot be decried, one should act based on information received. Information can be received by reading, sifting, talking, listening and thinking, or as a form, a verbal report or a written report. Once a problem is stated clearly, the options can be considered. A decision-maker should have the data and information that he needs – not necessarily that which he thinks he wants. Often decision-maker is overwhelmed with data and information, so the first task is to decide what to receive, when to receive and how to receive. Summarized statistical data is a useful tool for a decision-maker. The CRUCIAL first step in decision-making is to see things without limiting your Vision.

Try this example:

Look around for red objects. Now close your eyes and ask yourself how many green objects there are. Look again. Surprised? It was focused attention on red that kept you from noticing things of another colour.

 It is the same with ideas. When we hear a new idea we instinctively either like it or dislike it. Hence we use our intelligence to defend our view. An easy way to escape this trap is to do a PMI. 

Plus, Minus, Interesting (PMI)

De Bono illustrates the technique with this example: in a discussion about the design of public buses, someone suggests taking out all the seats.  What’s your reaction?  Why?

Whatever you said, now takes another look at the matter, this time using PMI.  Spend three minutes writing down every good point you can make about this idea, every bad point, and every point that is neither good nor bad but simply interesting.

Most people are surprised to find that they generate eight or ten Pluses  (including some that aren’t so obvious such as, “Buses would be cheaper and easier to repair”), as many minutes, and a handful of Interesting (such as, “Comfort may not be so important in a bus”).

The aim of doing a PMI is to achieve broad mindedness in our thinking, rather than remaining the obedient servant of our own prejudices.  To put it another way: the PMI is an attention-expander; it prevents us from seeing only red.

POINTS TO NOTE WHILE DOING PMI

Ø  Think of all new, wild and interesting ideas.

Ø  Go for quantity of ideas. Narrow down the list later.

Ø      Have a Broad mind. Don’t reject even the  most outrageous idea

Considering All Factors (CAF):  This tool is a conscious effort to make sure you’ve thought of everything that might be relevant in making a decision. Suppose you’re thinking about buying a new house.  Do a CAF to be sure you ask all the right questions.  While obvious issues such as size, cost and layout are bound to come to mind, without a deliberate effort to list every relevant factor you might overlook others.  Is there a hospital nearby?  Is there a bank near by?  Does the area have under ground drainage connection? Is the water supply good? 

Ø  Determine all problems and conflicts

Ø  Do an Objective Appraisal

Ø  Find Solutions

Consequences & Sequel (C & S):  While PMI and CAF open all sorts of possibilities; C & S helps us to judge, which are the best.  One of the traits that make us different from animals is our ability to imagine the outcome of our actions.  But we can greatly improve this ability by learning to use it in a systematic way.  The De Bono technique is to imagine the probable outcome of a decision at four distances in the future: immediate, short term (1 to 5 years), medium term (5 to 25 years) and long term (over 25 years).

In his courses De Bono asks such questions as, “What if the world runs out of oil?”  Or “What if a new electronic robot replaces human labour in factories?  Imagine the consequences.  “Students are astonished to see how their predictions of immediate and short-term effects lead them on to perceive longer-term possibilities.  Soon they acquire enough skill to apply the method to decisions in their own lives.

Bryan Prescott in Effective Decision-making gives an admirable example of the difficulty as follows:

The objective is to increase the production by at least by 10%

Three possible decisions are:

  1. Introduce overtime working
  2. Recruit temporary workers
  3. Introduce new technology

 The productivity will increase in 1) by 10%, in 2) by 12% and in 3) by 20% The cost of 1) would be Rs.100000, of 2) Rs.90000 and of 3) Rs.375000 The implementation can be 1) immediate, 2) three months and 3) none months.

 So, the factors considered critical are: If it is time, then 1) wins, if cost 2) wins, and if increased productivity in the long run 3) wins. 

But what about the effect on work force?

They would prefer 1) first, the 2) and then 3). They may refuse to work with temporary labor and they may fear new technology will endanger jobs. So, no decision should be treated in isolation from those affected.

Other Point of View (OPV): Often problems involve a conflict with one such as your spouse, boss or neighbor. You will better able to find a solution if you try to see the situation from the other person’s viewpoint.

To see how OPV can help your thinking, write down whatever views the other person is likely to have about your disagreement. Not only are you sure to produce thoughts that surprise you, but also you may well see solutions to the problem.

Recently I bought a new car radio from a dealer who recommended it highly. It proved no better than the one it replaced. I was about to charge into his store and demand my money back, but it occurred to me to put myself in his place. Doing this I saw how offended he’d be at having his judgement questioned. So I took a different tack and appealed to his sense of self-respect. He exchanged the radio for a much better one, without charging me the difference in cost.

As my grandmother used to say, “You can catch more flies with honey than with vinegar.” She couldn’t have known about de Bono’s tools: she was just a naturally good thinker.

Ø  Consider the other persons point of view

Ø  Don’t question his judgement

Ø  Build on the ideas of others (Someone might say something that might “spark” a new idea in you.)

Aims, Goals, Objectives: An often-unused tool of better thinking is the practice of making a list of all your reasons for doing a particular thing.  Most of us assume we know what our goals are, but often we have hidden or unconsidered goals that get in our way. A man usually loses because he tries to go for “kill” shots – which generally wind up in the net.  Although he thinks winning is his goal, he is in fact led astray by another goal – the desire to look terrific.  The pursuit of one of his goals is keeping him from reaching the other.

Defining our goals can lead to creative solutions to problems.  De Bono tells of a grandmother trying to knit while the family toddler was tangling her yarn.  Exasperated, she put him in his playpen, but he howled so loudly that she had to take him out.  Then she realized that her goal wasn’t to pen the child, but to separate him from her yarn.  So she solved the problem by leaving him out – and climbing into the playpen herself.

Ø  Defining our Goals

Ø  Listing out the things to be achieved to reach the Goal

Ø  Going in pursuit of that Goal.

 

 

 

First Important Priorities:  This step helps you to evaluate and to choose among the many possibilities you thought up by means of the other tools.  De Bono and his colleague, Michael de Saint-Arnaud, give this example:

Suppose someone wants to borrow money from you.  Consider all factors and then choose the three most important.  The top priority might be, “ When will it be repaid?”  Followed by “ Can you trust the borrower?”  In the case of a parent lending money to a daughter, the top priority might be, “What does she want it for?”  Too many of us make our decisions on a gut-level basis; we do what feels most important – but feeling is no substitute for thinking

Ø  Target your Primary Goal.

Ø  Set a time Limit

Ø  Take the necessary action to achieve your target

 

Alternatives, Possibilities, Choices:  Even after using the preceding tools of thought, you may not have found a satisfactory solution to your problem.  The key to finding alternatives is to look for possibilities outside your usual thinking patterns.  Edison, in searching for a light-bulb filament, tried thousands of unlikely materials, including cork, fishing line and tar, before succeeding with a strip of carbonized cardboard.

Learn to “think wild”.  Let yourself imagine all kinds of possibilities, including those you would ordinarily consider impractical or ridiculous.  Permit your mind to float free and to take what it offers.  Use good sense and judgement only later to weed out what’s impossible.

There are a number of ways to search for creative alternatives.  One is to think about the exact opposite of what normally comes to mind.  Another is to check your assumptions; may be you haven’t found a good alternative because you’ve unnecessarily limited your search.  The classic six-match problem is a case in point. 

Lay six matches on a table.  Arrange them to make four equal-sided triangles.  If you don’t know the answer, you’ll probably decide there’s no way to make more than two triangles with six matches.  But who said you had to solve the problem in two dimensions? If you ask yourself that question, the solution suddenly becomes obvious: you can make a tetrahedron (a four-sided pyramid), each face of which is an equal-sided triangle.

Ø  Search for creative alternatives

Ø  Think opposite of what comes to mind

Ø  Cultivate the most critical skill f “Adaptive Capacity”

Some  outstanding examples of critical decisions made in difficult situations and emerging victorious. Sidney Harman a leading executive in Harman Kardon International had to rush once to his factory to solve a rebellion by the workers at his factory.

The men at the night shift were supposed to get a coffee break at 10 p.m. When the buzzer that announced the workers break went out of order the management arbitrarily decided to postpone the break for 10 minutes when the other buzzer was scheduled to ring. One worker argued that I have a watch to tell me when it is 10 so I am going to my coffee break and not waiting for another 10 minutes. So 12 workers went out against the order and all hell broke loose. The workers point was that he refused to cow down to managements senseless rule. Harman understood the workers point of view – “the technology is there to serve the man and not the reverse.”  After this Harman revamped the factory and it campus encouraging the workers to take most of the responsibility to run their workplace. Harman had unexpectedly become the pioneer of “participative management” – a movement that continues to influence the shape of workplaces around the world. 

Leave a Reply

Your email address will not be published. Required fields are marked *