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Ronaldo, Beckham & Barclays – how do you make the decision?

June 29, 2012

Judgement counts. We all make a lot of decisions everyday, and we like to think that we make the big ones with enough time, care and attention that we can be reasonably certain that they are rational, consistent and safe.

Three big decisions have caught my attention this week, and I wonder how they were made:

  • The decision by Ronaldo not to take one of the first four penalties for Portugal v Spain in the Euros semi-final penalty shoot-out
  • The decision not to include David Beckham in the British Olympic football squad
  • The decisions made at Barclays to act with such skulduggery in working in an illegal and covert manner to set inter-bank lending interest rates

Decision making is a science that was unknown in the days of Benjamin Franklin, who used ‘moral algebra’ to make his decisions: My way, is to divide half a sheet of paper by a line into two columns; writing over on Pro, and over the other Con. Then, during three or four days consideration, I put down under the different heads short hints for the different motives. When I have got them all together, I endeavour to estimate their respective weights, and I find at length where the balance lies.

The modern science of quick decision-making is called heuristics. It is concerned with finding simple rules for making good decisions in complex situations. One of its discoveries (proved in areas from weather forecasting to the prediction of high education dropout rates) is that there is often no need to assess the relative importance of different factors. Just drawing up lists of ‘for’ and ‘against’, and going with the longer list, can produce as good a result or better

This is what Charles Darwin did when deciding whether to propose marry Emma. His original list is still on display at his home for all to see. The pros included companionship (better than a dog, anyhow), while the cons included the fact that he would have less money for books. The list of pros was longer than the list of cons, and Darwin duly proposed. Darwin’s procedure of a simple tally worked, I suspect if he had followed Franklin’s more complicated procedure he would probably still be trying to work out whether to get married or not!

But just how consistent and careful are we? How far are our decisions influenced by external trivia? That’s the question three business school academics ( set out to answer when they studied decision making by parole judges.

The law is a good test bed, as legal decisions are more rules-bound than in business and life and therefore less susceptible to wide variation. Deciding on a prisoner’s parole is a palpably serious issue that gets serious, focused attention, so you’d expect consistent decision making. But what they found was shocking: it was more likely that a prisoner would be granted parole if the application was heard at the very beginning of the day or after a food break!

Are judicial rulings based solely on laws and facts? Legal protocols holds that judges apply legal reasons to the facts of a case in a rational, mechanical, and deliberative manner. In contrast, realists argue that the rational application of legal reasons does not sufficiently explain the decisions of judges and that psychological, political, and social factors influence judicial rulings.

The research tested the common caricature of realism that justice is what the judge ate for breakfast in parole decisions made by experienced judges. They recorded the judges’ two daily food breaks, which result in segmenting the deliberations of the day into three distinct decision sessions. They found that the percentage of favourable rulings droped gradually from 65% to nearly zero within each decision session and returns abruptly to 65% after a break. The findings suggest that judicial rulings can be swayed by extraneous variables that should have no bearing on legal decisions.

The good news is there are ways to enhance your decision-making. Research shows that there are a few other ways to re-charge your cognitive batteries – look at scenes of nature, take a short nap, experience some kind of positive mood – or eat a meal. All these things can significantly recharge your mental batteries. Brain gym and other gimmicks won’t help but cardio-vascular exercise will.

What I find especially intriguing about this research is that we tend to imagine human judgment is a fairly fixed characteristic. What the parole judges research finding teaches us is we aren’t as rational as we imagine and all kinds of extraneous trivia can change our minds completely.

Effective leaders combine experience and a strong decision process that forces them to evaluate, listen, adjust and learn from each decision.  Strategic leaders typically build in these three core steps when evaluating and arriving at their decisions.

  • Carefully frame and then reframe your decisions Strategic thinkers consider what truly needs to be decided right now. They ask themselves: What is the crux of problem I need to solve or the opportunity I want to capture? Will the decision advance overall goals?
  • Balance speed, rigor, quality and agility Endless analysis loops do not make for a good decision; it takes courage to decide based on incomplete information and conflicting opinions, or when uncertain consequences lurk, and naysayers abound.
  • Remain flexible Strategic thinkers often break the decision down into smaller options or sub-steps. They reframe a binary yes/no decision as entailing more than two alternatives.  They stage the decision over time and run pilot tests on key assumptions if valuable.

Of course the landscape of our brain is not a rational place. We still walk around with the same Stone Age brain our ancestors had – a mess of emotions, imperfect memories, and a short attention span. To top it off, it never has all the facts to make the ‘perfect’ decision.

From here the story gets worse. We even make decisions without being conscious of having done so. In reality things aren’t so bad, we make decisions all day, everyday, the world keeps turning. The good news is that the field of neuroscience has made us well aware of the shortcomings of the human brain. By knowing these weaknesses, we can then use a simple strategy to work around them.

Here are my thoughts on a strategy on how to make better decisions.

  • Listen to your instincts but don’t let them boss you around We evolved instincts for a reason – they work really well. We rarely need to make snap decisions anymore but don’t fight it, but don’t simply stop there. Ask why did I think that? or why do I feel that way?
  • List your alternatives The brain is the most powerful computer in existence, but it sucks at multitasking. It’s difficult to hold more than seven different trains of thought in your mind at once and impossible to concentrate on two simultaneously. Write down every option you have for the decision you’re making, get it out of your head and spend some quality time on each one.
  • Rephrase the question You know what it takes to be a genius or a brilliant scientist? It’s simply asking the right questions. Forcing yourself to think about the problem in different ways makes it easier to come up with different solutions.
  • Anticipate history Using history to make a decision requires that we remember what happened last time we were in a similar situation. Go slow and be critical with your recall – beware of only remembering your wins vs. your misses.
  • Remember that time is on your side Distance gives perspective, separate yourself from the emotions of the moment. This is impossible to do instantly, so the next best thing is to put some time between now and when you actually make the decision.
  • Visualize every outcome in detail. Engage all your senses when you picture what could happen as a result of each decision. Just be sure to imagine every outcome in detail, not just the best or the worst ones.
  • Weigh the possible outcomes. For every option, list each outcome and label it as positive or negative.
  • Make the damn decision Are you deciding your career path or what breakfast cereal to eat? Not all decisions are equal so don’t waste your time. You don’t need to follow these steps every breakfast time.
  • Implement your decision wholeheartedly Once you have made a decision, implement it totally. At this stage, don’t be confused by thinking about the other potential alternatives that you did not pick.

After you’ve made your decision, evaluate it – this is the most important step. If you don’t evaluate your decision afterward, you won’t learn anything from it. Ask yourself whether the outcome was what you expected? Would you do it again? What do you know now that you didn’t know before? How would you turn this lesson learned into advice? By drawing insight from every decision you make, you can ensure that every choice has at least one positive outcome.

Albert Camus said Life is the sum of all your choices, reflecting that we make decisions every day. The trick is not to get hung up on keeping your options open – researchers have found that our aversion to letting options stay alive results in poor decisions. Equally don’t get lost in the decision-making process, give yourself a time limit to make the decision. Finally, there is the risk of paralysis by analysis, if you are trying to decide what to have at the curry house, don’t waste valuable drinking time reading everything on the menu. Don’t overthink it. If you try too hard, you may miss the obvious.

Of course the shenanigans at Barclays shouldn’t surprise us, the culture of deceit and personal gain which permeates the morality of such organisations has a major impact on the outcomes which bias decision making. In a similar way, maybe Ronaldo was thinking more about personal glory than the team in lining himself up for the final penalty, and the decision on Beckham was taken on a balanced perspective which perhaps we don’t share.

The decisions on which doors to open and close each day decide the lives we live. Whatever decision and choice you make, move forward, and don’t get a crick in your neck from looking back over your shoulder. The risk of a wrong decision is preferable to the terror of indecision – if you chase two rabbits, both will escape.

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