(This piece was written in September 2005; see bottom of page for links)
by Margie Borschke
Ten years ago, on a sunny Sydney afternoon, Shawn Callahan caught up with an old friend at a Darling Harbour café. Callahan had a lot on his mind: over the years he had become increasingly interested in what made organizations tick and a little voice was telling him to make a leap into the unknown, to start a management consulting company of his own despite the solid career he’d built for himself in the IT sector. It was a major personal decision. He was looking for advice. Instead, his friend started asking questions.
“They were really open, exploratory questions about myself, what I valued and what was important to me,” says Callahan. “I’d been mulling it over but it wasn’t until I had to say what I thought that everything changed. That was a turning point.” In almost an instant, Callahan says, his answer was clear. He’d made up his mind: he would quit his job and start his own consulting company from scratch. That was that. There was no endless chronicling and ranking of options. No decision trees. No charts. No invoking of cute acronyms like PrOACT or trying on of colourful hats. In short, none of the methods that the biz school gurus and effective decision making experts advise. Instead Callahan relied on less quantifiable techniques: storytelling, mental simulation and most of all his gut-feeling, his intuition that he was onto something big.
Today, Callahan’s Melbourne-based company, Anecdote works with corporations to manage tacit knowledge- using innovative narrative techniques and his list of clients includes major players such as IBM and BHP Bilton. “It was an excellent decision,” he says, “but it wasn’t an easy one.” Personal decisions never are. No matter how many tough decisions you make at work, big life choices always seem more arduous and more agonizing. Should you have another child? Get Married? Break up with your partner? Quit your job? Retire early? Buy a new house? Renovate? Move to another country? Sometimes even choosing what to have for dinner can seem overwhelming. Some of us put big decisions on hold, often indefinitely. Others let fate (or usually other people) make choices for us. Neither is really a good approach. We wouldn’t make judgments and choices like this in our professional lives so why are we so sloppy when comes to our own happiness, in the part of our life that matters the most?
No one has been more preoccupied with perfecting effective decision making techniques than the business world where good decisions save millions and bad ones defile the bottom line. A thriving training industry attends to the demands of commerce and government to churn out better decision makers, advocating the teaching of formal decision making techniques that are based on economic theory which sees us all as rational actors attempting to maximize utility (be it profit, happiness etc.) and behavioral psychology. The approach goes something like this: Identify your objectives and your options, gather information, evaluate and rank your options according to your objectives, take into account every uncertainty and consequence you can think of and then choose based on which option comes out ahead once you do your sums. Maximizing utility is the name of the game and while no one claims the approach is foolproof, its proponents say it can be relied on to produce good outcomes for any kind of decision be it a billion dollar business deal or where to go on your annual fishing holiday.
There’s just one problem, says Gary Klein, an American scientist who runs Klein Associates, a consulting firm in Ohio. “There’s no evidence that I’m aware of that having people apply those rules improves the quality of their decisions.” Klein’s research, chronicled in Malcolm Gladwell’s entertaining best seller Blink: The Power of Thinking without Thinking as well as in his own books Sources of Power and The Power of Intuition, flies in the face of traditional thinking about decision making. Structured formal decision making methods are prescriptive–they tell us how we ought to make decisions–and they’re designed to correct what is thought to be our propensity to make interpretive errors- by misreading cues in our environment–by quantifying preferences and keeping our emotions and enthusiasms in check. Klein decided to take a different tact. Rather than concern himself with how we should make decisions, he looked at how experts under stress actually do it, working not in the lab with subjects attempting unfamiliar tasks, as is often the case in cognitive and behavioral psychology, but in the field, as the action unfolds. “I realized that what was missing [from the psychological research] was expertise,” says Klein, a leader in the field of naturalistic decision making, the study of how people make decisions in real life. His first study, in 1985, looked at firefighters–it was full of surprises.
“Everything [about that study] surprised me. Nothing happened the way it was supposed to,” says Klein. (Sources of Power is the rare book that begins by chronicling all the mistakes the author’s team made and follows up with the important lessons learned.) “First, the firefighters said that they didn’t make decisions, that they just knew what to do [when faced with a situation]. Then they said that in most cases they didn’t generate more than one option and that surprised me. A decision, [by definition] means you have to prepare at least two options and they weren’t even doing that. And then, the fact that they could evaluate an option without comparing it to another one surprised me.” Experience was often the only explanation the firefighters could give (although there was one commander who claimed to have ESP.) They just knew. Says Klein, “I had to abandon my preconceptions and try to see what were they doing and how were they using their experience.”
Experts, Klein found, were not exceedingly fast at following rational rules of decision making, as some believe, instead they made their decisions in an entirely different way. They draw upon their experience, looking for recognizable patterns, to quickly assess if a situation was familiar or not. Then, based on that, they chose the first workable option they came up with, often the first thing that sprung to mind. Evaluating the effectiveness of a course of action didn’t involve gathering information and weighing the advantages and disadvantages of one approach as compared to another–there was no time for that. Instead, they evaluated the decision based solely its own merits by imagining how it would play out. If they foresaw a problem with their solution they modified it or moved onto the next idea; if not, it was full steam ahead. As Klein wrote in Sources of Power, “the emphasis is on being poised to act rather than being paralyzed until all the evaluations have been completed.”
Klein has since studied many experts who work in stressful conditions including nurses, intensive care unit teams and military strategists and time and again he has found that they all seem to break almost every rule that formal decision making advocates set forth and yet they manage to make good decisions the majority of the time. More impressive still, they manage to do so in less than optimal conditions, in situations where the stakes are high (often life or death), where their access to information is limited and while they are under a great deal of stress and time pressure.
When it came to how experts made decisions, intuition rather than reasoning, seemed to lead the way and techniques such as simulation and storytelling seemed to be far more important than rational analysis. “I realized what a tremendous strength this was,” says Klein. “And here the research community had been studying people in ways that disqualified their strengths, in ways that separated them from what makes them so effective and then they sneered at them for being so flawed.” Rather than study the weaknesses and limitations of the human capacity to make decisions, Klein set out to study the many strengths that didn’t seem to be accounted for in the dominant models of decision making and to figure out how to better train decision makers. If experts, the people who made the most effective decisions, weren’t using these techniques to make choices, Klein asked, should we really be training novices to use them?
Experts, of course, have that certain something that novices don’t: experience. Though Klein doesn’t believe that personal decisions are fundamentally different to those that experts make he admits that the issue becomes trickier because people are usually making decisions about areas where they don’t have a lot of expertise or experience. So while classic methods might be a waste of time for experts, might they be of some use to the rest of us? When we’re on unfamiliar terrain, as we often seem to be in our personal lives, surely a little rigor and reasoning could come in handy.
David A. Welch, a professor of political science at the University of Toronto and the author of Decisions Decisions: The Art of Effective Decision Making thinks so.
“We’re all normal human beings and normal human beings suffer from particular kinds of traps and our intuitions lead us into those traps. If at the end of the day what you really care about is maximizing something, these traps are going to lead in the wrong direction,” says Welch. An expert on international relations, Welch became interested in decision making while studying international security. “I wanted to understand why smart people make dumb decisions,” he says. He also realized how useful the information could be when individuals were faced with tough choices such as buying a house or choosing where to go to school so he sought to translate the technical jargon of rational choice theory into a language the average person who wanted to make smarter decisions could understand.
“People make bad decisions all the time because they are over hasty, they fail to consider some of the implications of what they do or they wrongly judge one alternative favorably because it reminds them of something unrelated,” says Welch. “The way the brain works leads us down the wrong path a huge proportion of the time. It doesn’t mean all your intuitions are wrong. It means that if you’re making a really important decisions and you want to be really sure you’re making the right choice then ideally what you want is to have is your intuitions agree with a more structured approach. A good proportion of the time your intuition and your exercise will agree and you will have the satisfaction of being even more confident.” Though the technique he advocates could theoretically be used for any kind of decision, even matters of the heart, Welch says you have to consider the time it takes to go through the exercise. (Plus, he says, you risk being labeled unromantic if you start charting out your intimate relationships.) “You don’t do this every day,” says Welch. “I will go through the formal exercise maybe twice in a busy year.” Buying a house and a car were both occasions where Welch personally made the effort.
Klein, on the other hand, sees these technical exercises of limited use, even for novices.
“One reason people run to these methods [in the corporate sphere] is because they want to avoid responsibility,” says Klein. “People are very desperate to find an analytical method that gets them off the hook. They don’t want to say I made that decision. They want to say look, I followed the steps so nobody can blame me.” (The rigour of this kind of analysis, he points out, can make it beneficial in situations where justifying a decision is important, for example in the political sphere where there are often many competing interests to account for and accommodate.)
“If you’re going to improve somebody’s decision making skills you’re not going to do it by improving the quality of their procedures and their analytical methods,” he says. “The advice people usually give you is don’t form any conclusions until you’ve gathered all the data. That’s bad advice because it makes you passive,” he says. But before you start counting your chickens before their hatched, think again. “Even worse than waiting, is jumping to a conclusion and sticking to it no matter what.” Klein is by no means advocating snap judgments or indulging prejudices nor does he believe you should abandon rational thought, another powerful human strength. On the contrary, he believes that deep, thoughtful reflection will improve your decision making skills. Says Klein, “The way you’re going to improve [a person’s] decision making and judgments is by improving the quality of their intuitions and that means having them reflect on decisions that they’ve made that turned out right or wrong. It means giving them more experiences. It means having them take a more active stance in developing their expertise.”
Part of developing expertise is being honest with yourself about when you’re dealing with the unfamiliar. “Novices should be less confident in their intuitions and they should explore alternative options but not in the classical way by setting up common evaluation dimensions, assigning weights to these dimensions, filling in squares all those sorts of things,” says Klein. “Instead of comparing options on a set of dimensions that is rigid, novices should imagine each option, how it might go well and how it might go poorly. They need to see how they feel about the best cases and the worst ones.” Klein trains his clients to conduct so-called pre-mortems, a sort of simulation of what would happen if everything went wrong. “You don’t just go with your enthusiasm,” he warns. “It’s about actively exploring the data and discovering relationships that allow you to learn more about a situation so that when you do have to make a choice it will be better informed because you have a deeper understanding of the dynamics.”
We need to take our intuition more seriously. Shawn Callahan believed in his in the face of difficult odds. Had he dismissed those feelings that were difficult to articulate and analyzed the situation along more traditional criteria, a career move, he thinks would have appeared to be foolhardy. Novices should be more wary of their gut-feelings, says Klein but they should not dismiss them. “Be aware that if you have to think of different options there’s a good chance that the first option you think of is going to be the best,” says Klein. “It may not be. But hold onto that. That initial impulse, when you have some basis of experience is usually pretty good and if you start analyzing too quickly, the analysis can confuse you and you will have lost your intuitive sense of what you really want to do. Pay attention to what your intuition is telling you and then do the analysis rather than vice versa.” Listen to your heart: your head will follow.
Getting Out of the Zone of Indifference
Some of us are plagued by indecision but could it be that we place too much value on choices that don’t really matter much?
“In most cases we’re faced with pretty obvious choices: Do you want to buy a really good car at a very low price or do you want to buy a mediocre car with terrible repair records at a high price? That’s not hard,” says Gary Klein, a leader in the field of naturalistic decision making. “However, the closer together we make the options the harder it gets. The toughest decisions are those where the strengths and weaknesses are almost perfectly balanced.”
“They’re also often the decisions that matter the least because the choice will be almost inconsequential. This is the zone of indifference. At this point it doesn’t matter what you choose but we are so conditioned to want to find an advantage for one option over another that we drive ourselves crazy trying to do it,” says Klein. If the goals are well defined and only the best will do–and there are such occasions-–then this is exactly the sort of task at which formal decision making methods excel. They will help you tease out the best option if you have the time. But Klein advises otherwise. “If you think you’re in the zone of indifference rather than spending another few hours or days or weeks trying to [find the optimal choice] just admit that you’re in the zone of indifference, admit that you don’t want to be trapped there and you can’t think yourself out of it. Flip a coin or something.” Move on.
Books & Links
Klein Associates
Anecdote
Blink by Malcolm Gladwell
Sources of Power: How People Make Decisions (Paperback) by Gary Klein
Decisions, Decisions: The Art of Effective Decision Making (Paperback) by David A Welch
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