Tuesday, September 4, 2018

How to Make Big Decisions

Interesting essay in the Times by writer Steven Johnson about research on decision making. First piece of advice: consider multiple alternatives.
One important insight that has emerged from this research is the importance of generating alternatives to any course of action you are considering. In the early 1980s, a business school professor named Paul Nutt set out to catalog real-world decisions. . . .

The most striking finding in Professor Nutt’s research was this: Only 15 percent of the decisions he studied involved a stage where the decision makers actively sought out a new option beyond the initial choices on the table. In a later study, he found that only 29 percent of organizational decision makers contemplated more than one alternative.

This turns out to be a bad strategy. Over the years, Professor Nutt and other researchers have demonstrated a strong correlation between the number of alternatives deliberated and the ultimate success of the decision itself. In one of his studies, Professor Nutt found that participants who considered only one alternative ultimately judged their decision a failure more than 50 percent of the time, while decisions that involved contemplating at least two alternatives were felt to be successes two-thirds of the time.
Considering multiple alternatives is the heart is the Environmental review process under NEPA, which requires you to generate multiple alternatives (including the "no action" alternative) and forecast the impact of each on the environment, traffic, neighborhood cohesion, historic properties, etc. I have taken several courses on this process and every instructor has his or her own fund of stories about projects that failed because the planners did not consider alternatives.

Second piece of advice: imagine failure. Many experts recommend a narrative approach to decisions, that is, telling yourself a story about what will happen if each choice is made.
The psychologist Gary Klein has developed a variation on this technique. He calls it a “premortem.” As the name suggests, the approach is a twist on the medical procedure of post-mortem analysis. In a post-mortem, the subject is dead, and the coroner’s job is to figure out the cause of death. In a premortem, the sequence is reversed: “Our exercise,” Dr. Klein explains, “is to ask planners to imagine that it is months into the future and that their plan has been carried out. And it has failed. That is all they know; they have to explain why they think it failed.”

In Dr. Klein’s experience, the premortem has proved to be a much more effective way to tease out the potential flaws in a decision. A whole range of bad cognitive habits — from groupthink to confirmation bias — tends to blind us to the potential pitfalls of a decision once we have committed to it. It isn’t enough to simply ask yourself, “Are there any flaws here in this plan that I’m missing?” By forcing yourself to imagine scenarios where the decision turned out to be a disastrous one, you can think your way around those blind spots and that false sense of confidence.


Shadow said...

Sounds like devils' advocates play an important role in decision making. The best testers are those who think differently than those who designed the system.

leif said...

as i pulled my truck onto a side road last week, its engine destroyed by a thrown rod and purging all of its fluids, i was already going through causes, scenarios, tasks, options and short- and long-term costs. i can't help it and couldn't halt it if i tried. it just happens. i admit until reading this excerpt, i thought the majority of people had such rapidfire congingency planning bursts as a matter of course. i must be terribly wrong in this, and i find that as much embarrassing as disconcerting.