“You should not be a trainer you are a business therapist!” He said. That caught me off guard…(I guess we carry a bit of the inner us wherever we go.) The person speaking had no background information on what else I do apart from management training and consultancy. We were having a discussion on how decision making has become such an uphill task in the VUCA (Volatile, Uncertain, Complex, Ambiguous) world. Nothing is predictable anymore from Covid effects to the high rate of inflation. The supply chain is very unpredictable.
My view however was as a manager or business owner you have to make decisions anyway. The decisions do not have to be perfect. We also need to give ourselves the benefit of doubt when things do not turn out as planned. We have always been taught about the perfect decision making cycle, from defining the problem to implementing the best solution. It’s however important to acknowledge that not all decisions are going to be good, in spite of our best efforts. We also have to appreciate our barriers to decision making especially during these uncertain times;
- Bounded rationality – While we might like to think that we can make completely rational decisions, this is often unrealistic given the complex issues we are facing in life or in business. Since we have not faced these particular situations previously, we may not know what questions to ask or what information to gather. Even when we have gathered all the possible information, we may not be able to make rational sense of all of it, or to accurately forecast or predict the outcomes of our choice.
“Bounded rationality is the idea that for complex issues we cannot be completely rational because we cannot fully grasp all the possible alternatives, nor can we understand all the implications of every possible alternative.”
- Escalation of commitment – Given the lack of complete information, we do not always make the right decision initially, and it may not be clear that a decision was bad until some time has passed. Escalation of commitment is the tendency of decision makers to remain committed to poor decisions, even when doing so leads to increasingly negative outcomes. Once we commit to a decision, we may find it difficult to reevaluate that decision rationally. It can seem easier to “stay the course” than to admit or recognize that a decision was poor.
We however need to recognize that progress down the wrong path isn’t really progress.
- Uncertainty – Times have never been so uncertain, from Covid effects to the high rate of inflation. One may not know the outcome of an alternative until they have actually chosen that alternative and choosing or committing to one option means forgoing other options.
- Time – In a world that is moving too fast we may not have the luxury of time to collect information and rationally process it. We may depend on gut feeling rather than engage deep processing. While this may save time it does not necessarily lead to the best possible solution.
- Personal bias – Our decision making is limited by our own biases. We tend to be more comfortable with jobs, ideas, concepts, things, and people that are familiar to us or similar to us. We tend to be less comfortable with that which is unfamiliar, new, and different. In a world that is changing so fast and requiring us to deal with the unknown, our own biases will keep us stuck and revolving around the familiar even when it is not working.
This conversation cemented the need to be more courageous and proactive in decision making; take action without certainty. This means acting from an angle of experimentation as we review the risks and results with readiness to change course when necessary.
His comment however made me realize that we are all human at the core. Considering this was a management class I did not expect the word ‘therapist’ to come up. I however realized that as we struggle with decisions as business owners or business executives we need to be reminded of our human limitations not as a weakness but as a challenge. We also need to allow ourselves to lean on each other’s strengths and expertise.
“Courage and confidence is what decision making is all about and you cannot make progress without making decisions.”