The Decision Dichotomy: how making the right decision can get you a bad outcome
/By Duncan Anderson and Daniel Tram. To see all blogs click here.
One sentence summary: Bad decisions will eventually kill a company, but decisions that no one is on board with will mean that good decisions can’t make a company.
In some respects a company is a series of decisions. Decisions have to be made, and making no decision is a decision. Not everyone is going to be on board with every decision (disagree but commit) but no one will be on board with a decision that doesn’t have fair process.
Good decision * Fair process => Good outcome (people in the company are on board)
Good decision * Not fair process => Bad outcome (people in the company are NOT on board)
Bad decision * Fair process => Good outcome (people in the company are on board)
Bad decision * Not fair process => Bad outcome (people in the company are NOT on board)
Jingle: Fair Process > Decision Quality
What is fair process? Well it depends, some thoughts on this below :).
Whose responsibility is it to have fair process? Everyone! No one is perfect, but we can hope to be ‘fairly’ good. One person deciding what ‘fair’ is sounds ‘fairly’ ridiculous to me. Because the outcome of ‘fair process’ is ‘everyone on board with a decision’ then input into what is fair can come from anywhere. You don’t and can’t have input on everything, but if something really doesn’t sit well with you to the point of you ‘not being on board’ please please PLEASE bring it up! Bringing it up is ‘loyal opposition’, not doing so is ‘disloyal opposition’.
Overview
We’re all making decisions every day!
That’s what makes the job interesting - we’re not just mindlessly executing processes
Decision Outcome = 1. Belief in Fair Process * 2. Trust in Decision Maker * 3. Decision Made
The decision impact is not just what you decide to do, it’s the impact that occurs after the decision made
Commitment to Implementation of Decision = 1. Belief in Fair Process * 2. Trust in Decision Maker
Commitment to implementation is independent of the actual decision made
The ‘right’ decision can be made, but if there is no commitment from the team to implement it effectively then there will be negligible delivered impact
A team can wholeheartedly commit to the implementation of a decision even if they disagree with the actual decision made as long as there is:
1. Belief in Fair Process
Fair Process =/= engaging everyone
Idea Meritocracy =/= Democracy
DO Make a decision based on the best idea
DO NOT just make a decision based on who had the idea or how many people have the idea
“Your representative owes you their judgement. And they betray you if they sacrifices it to your opinion.” Edmund Burke.
What is a fair process varies from decision to decision
Factors to consider when determining what fair process is:
Level of behaviour change required
Level of Emotions associated with the change (controversiality)
Decision makers need to engage their team to ensure their team feel like a sufficiently fair process has taken place
2. Trust in Decision Maker
Team members implementing a decision need to believe that the decision maker is being open, honest and authentic
Team members implementing a decision need to believe that the decision maker is learning from experience - both good and bad decisions
Decision makers need to constantly engage their team to build this trust
Long term outcome for company = 1. Belief in Fair Process * 2. Trust in Decision Maker
The long term outcome for company is also independent of specific decisions made
Making the ‘right decisions’ without fair process or trust in decision makers will mean a poor outcome for the company in the long term
Making the wrong decisions with fair process or trust in decision makers
++++++++++++++++++++++
Details
1. Belief in Fair Process
Context on fair process and disagreement
How you engage others when making a decision is important, perhaps the most important thing (HBR Article: Fair Process Managing in the Knowledge Economy)
"employees will commit to a manager’s decision—even one they disagree with—if they believe that the process the manager used to make the decision was fair."
"people care as much about the fairness of the process through which an outcome is produced as they do about the outcome itself.”
Having disagreement between what is the right decision is actually a symptom of having a diverse group that is striving to make the best decision. (Kellogg Insight: Better Decisions Through Diversity)
“When these diverse groups perform well, they don’t recognize their improved performance”
“a diverse group’s members will typically feel less confident about their progress largely due to the lack of homogeneity.”
Ok, fair process is important. So what exactly is fair process?
Well, it depends on the problem you’re dealing with! When trying to work out what fair process is, factors to consider are:
Level of behaviour change required
Level of Emotions associated with the change (controversiality)
A matrix for you all!
Fair process with Low Emotions/Low Behaviour Change: Send Comms post decision
Clearly communicate decisions in written comms to ensure alignment
Decision maker(s) are empowered to unilaterally make decisions
If every decision involves engaging everyone we won’t be able to improve education very fast!
Fair process does not always mean a democracy - we empower people to take responsibility
DA: “I love that I didn’t know about this!”
Fair process with High Emotions/Low Behaviour Change: Explanation and Discussion
Post decision making, provide an explanation for the reasoning behind the decision
Provide the opportunity for those impacted to ask questions to understand
Fair process with Low Emotions/High Behaviour Change: Engage with representative sample
Spend time with those that the decision will affect to validate and update your understanding of the implications of the decision
Given the low emotional impact, this will focus on gathering understand and input so only a representative sample of people are required
"While fair process gives every idea a chance, the merit of the ideas—and not consensus—is what drives the decision making. Nor is fair process the same as democracy in the workplace.” (HBR Article: Fair Process Managing in the Knowledge Economy)
The aim of this approach is to:
Improve the understanding of the decision inputs
Demonstrate that the due diligence was done
Follow up with written comms post-decision
Fair process with High Emotions/High Behaviour Change: Bring on the Journey
Engage with all those affected
Provide all with the opportunity to provide input prior to the decision being made
Ensure that the environment is ‘emotional safe’ so that team members can communicate radically candorously
Post decision: Communicate the input that has been received and how the decision was made
Note, this matrix is only a guide - use your judgement to tweak this framework a factor is only rated at “medium” or “very high”
Variations that can be used to adjust this framework:
Communicate before/after
The higher the stakes, the more likely pre-decisions engagement is needed
Written Vs In-person
The higher the stakes, the more important it is that we sacrifice short term efficiency to ensure greater ‘buy-in’ through communicating in person
Explanation Vs Input
Sample population Vs Everyone
2. Trust in Decision Maker
For a team to commit to a decision made, they need to believe and trust the decision maker
In this blog we’ll focus on the “Perception of Self-Interest” and Credibility” elements of trust
Perception of Self-Interest
This can be thought about whether or not the team believes that the decision maker has their “heart in the right place”
Does the decision maker have the collectives’ interest at heart (at Edrolo: Is the decision maker being guided by what will most improve education?) or do they have a personal interest in the decision?
If doing a Large decision be as transparent as possible on motives and if somehow the outcome is 'helping you / making your life easier' consider explicitly explaining why this is the best outcome for the collective. If you don't address it people can assume the worst.
Credibility
Making wrong decisions does not inherently erode trust:
Some people believe that credibility = never changing your mind
This is true only when you have made the ‘right’ decision
If you have made the wrong decision this will actually erode your credibility!
“Only those who can change their mind, change the world.” DA OR “Those who never change their mind never change anything.” Churchill
However, we all make wrong decisions sometimes! This means at least some of the time we should be openly communicating about how we were wrong!
1. Work out if you are wrong
You probably are wrong in some way!
It’s unlikely you were able to perfectly predict everything
We find what we are looking for
2. Work out how wrong you are
Try to quantify this
Technique to help quantify: identify how many of your core assumptions proved to be incorrect
3. Work out why you are wrong
Again, reviewing your assumptions used to make the decision is a good place to start
Ask questions to dig down deep into the root cause
4. Deliver appropriate comms
This is the clutch bit!
In an upside down way, communicating how you are wrong can actually increase credibility. What the!?!
If you communicate openly and with humility/vulnerability this can increase people’s trust in you
They know that if something goes wrong, they can trust that you’ll be open about it rather than sweeping it under the carpet
Use the information gathered in steps 2 and 3 to communicate
The more wrong you were, the more you should communicate!
Summary
Decision Outcome = 1. Belief in Fair Process * 2. Trust in Decision Maker * 3. Decision Made
Commitment to Implementation of Decision = 1. Belief in Fair Process * 2. Trust in Decision Maker
Long term outcome for company = 1. Belief in Fair Process * 2. Trust in Decision Maker
Making the ‘right decisions’ without fair process or trust in decision makers will mean a poor outcome for the company in the long term
If the organisation is constantly looking to “Reciprize, Systemtize and Live better Livez” then making wrong decisions with fair process or trust in decision makers will result in long term success
Specific decision outcomes are irrelevant to the long term outcome of a company