It Must Be Made True

Wendell Berry | Debiasing Strategic Decisions - Part 2 | Factoids | Elsewhere, Elsewhen

No economy, industrial or otherwise, can supply an appropriate aim or standard. Any economy must be either true or false to the world and to our life in it. If it is to be true, then it must be made true, according to a standard that is not economic.

| Wendell Berry

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Although I spend a great deal of my time wondering about the economics underlying what’s going on, I know that there are more foundational issues that motivate us. Yes, thay have a material, economic manifestation, but at core, those aims are about people, not dollars.

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Debiasing Strategic Decisions - Part 2

[An excerpt from a ‘booklet’ I am working on, On Decision-Making. A booklet is to a book as a novella is to a novel. Some of these materials were originally published on the Sunsama blog.]

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Perhaps the core message to be gained from Part 1 of Debiasing Strategic Decisions is this: while being aware of our cognitive blinders is helpful, the best approach to debiasing is to create processes that structure decision-making to intentionally counter biases to the degree possible.

Here are five of the most common groups of biases relevant to business decision-making.

Pattern-recognition biases — We are pattern recognition machines: it is a defining characteristic of our species. But there are some side-effects of our pattern-matching prowess that skew our reasoning. For example, confirmation bias leads us to discount new information when it doesn’t support an initial hypothesis. As Sydney Finkelstein, Jo Whitehead, and Andrew Campbell, detailed in Think Again: Why Good Leaders Make Bad Decisions and How to Keep It from Happening to You, pattern-matching can lead to huge mistakes [emphasis mine]:

Most of the time, pattern recognition works remarkably well. But there are important exceptions. If we are faced with unfamiliar inputs— especially if the unfamiliar inputs appear familiar-we can think we recognize something when we do not. We refer to this as the problem of misleading experiences. Our brains may contain memories of past experiences that connect with inputs we are receiving. Unfortunately, the past experiences are not a good match with the current situation and hence mislead us.

Another exception is when our thinking has been primed before we receive the inputs, by, for example, previous judgments or decisions we have made that connect with the current situation. If these judgments are inappropriate for the current situation, they disrupt our pattern recognition processes, causing us to misjudge the information we are receiving. We refer to these as misleading prejudgments.

In other words, our pattern recognition process is fallible. We have all experienced the embarrassment of accosting a complete stranger we thought we recognized. We have also experienced some degree of terror because we have misjudged the sharpness of a bend in the road or the speed of an oncoming car. What is less obvious is that our pattern recognition processes can also let us down when we are trying to judge the severity of a financial crisis, the value of an acquisition target, or the threat from an incoming hurricane.

Counter: One technique is to undermine the presuppositions that lead to the pattern match in the first place. Why are the team members so certain about a particular course of action? Explicitly draw our what is the underlying analogy between this circumstance and others from the past. One means is to dramatically enlarge the set of comparison scenarios, and supply known facts for each example.

Action biases — There is a well-known bias toward action among managers which can lead to accepting overly optimistic analysis and yielding to cultural pressures to make decisions quickly without accurately assessing uncertainties.

Counter: Promote the recognition of uncertainty rather than trying to squeeze it out of the conversation. Tools like scenario planning, decision trees, and Gary Klein’s ‘premortems’ explore the many dimensions of uncertainty before pressing ahead with a decision.

Stability biases — The inertia of the status quo can make it difficult to make changes or undertake novel courses of action. The earlier discussion of loss aversion is one such case, as are anchoring bias (concepts brought up early in planning are given undue weight) and the sunk-cost fallacy (we value what we have invested in more than it is worth).

Counter: One approach is to shake things up through ‘stretch goals’ that are intentional impossible to achieve, but which can force a reconsideration of deep and perhaps unexamined premises.

Interest biases — Conflicts arise naturally based on where individuals are sited in an organization. Sales may have quite different perspectives on resource allocation than Engineering. Explicitly defining the criteria that should be applied to make a judgment may help.

Counter: Good decision-making processes have to take into account diverging — and perhaps antithetical — interests. One approach is to preface any debate about a major decision by first laying out the criteria that will be used to evaluate a proposed outcome. This avoids running circles. Also, intentionally loading teams or meetings with individuals or groups with divergent interest can short circuit ‘interested’ decisions.

Social biases — Social norms can impede making decisions on their merits rather than conforming to social expectations. Dissent must be encouraged, and when absent serves as a warning. This is also an area where diversity plays a large role.

Counter: Good decisions are made more likely by increasing the diversity of those involved, and creating a culture that provides psychological safety for dissent (see Circles of Safety, below), and in which processes like those discussed earlier are applied to counter social biases, as well.

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We can’t eliminate these cognitive blinders: they are as deep in our DNA as language and love. However, we must acknowledge their existence, and remain aware that simply knowing about them — while helpful — will not exorcise them.

The only answer — if it can be considered an ‘answer’ — is to develop processes that cover the three stages of strategic decision-making, and carefully relegate control of all stages to process.

Without a bias-countering process, decision-making will be, at the least, suboptimal. And, at worst, flawed strategic decision-making processes can end a company’s future.

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Factoids

The ‘olds’ at work.

People aged 75 and older are projected to be the fastest growing segment of the U.S. workforce. [...] Nonprofit AARP found that fewer than 4% of companies were committed to programs that support putting older people to work, with only 27% “very likely” to consider doing so.

| Worklife

And we are going to need them to work, if other sources of new workers — immigration, domestic births — dry up.

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Rage deletion.

Nearly one in six workers has experienced a co-worker intentionally deleting important company data before quitting a job. One in twenty has personally committed “Rage Deletion,” with Gen Z employees being twice as likely (one in ten) to admit to doing so.

| CrashPlan

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Breadcrumbing in the workplace.

Yet another popular dating term is making the rounds and showing up in workplaces — breadcrumbing.

It’s when someone offers intermittent reinforcement to keep someone on the hook. At work, it may look like managers or HR telling staff about future opportunities, like raises, promotions, and travel, that never come to fruition. While this tactic to keep staff engaged isn’t new, it can ultimately break employees’ trust in their employer. And today’s younger workers are more discerning of it and have no problem job hopping when their patience dwindles.

| Worklife

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source: unknown

Conferences on the wane.

Most of the 175 convention centers across the country operate at a loss.

| Hunden Partners

Last year, conferences and corporate meetings generated about $119 billion in economic activity, down from the $139 billion added to the U.S. economy in 2019.

| U.S. Travel Association

 Just 20 convention centers host 82 percent of the 250 largest recurring events.

| Mint

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Elsewhere

Courtesy of Livio Hughes, in Is Employee Engagement an Oxymoron?, tells about a consulting project after working with ‘a widely distributed remote team created from a merger to trust each other by communicating better, sharing knowledge by default, reducing bureaucratic controls and applying some online self-management and resilience techniques’.

There is no ready-baked universal solution to these engagement challenges, but here are three ideas to better involve employees in decision-making and creating inclusive business environments that maximise staff retention and improve overall results:^[2]

• Circle of Safety is a type of organisational culture in which everyone is trusted and feels like they belong. Leaders should strive to create a Circle of Safety because it significantly improves cooperation in organisations when everyone feels that they are more secure in their job and that they are capable of completing tasks and contributing to organisational goals. Many corporate cultures have components that are counter-productive to collaboration. Employees can feel isolated, useless or that their ideas are not valued, which are all conditions that need to be addressed by leadership. To develop a Circle of Safety, leaders must develop a culture based on human-centred values by offering trust and empathy by default. You can learn more about this idea in this short but very engaging TED lecture from Simon Sinek, who came up with the concept.

• Appreciative Inquiry is a model for analysis, decision-making and the creation of strategic change, but in particular for decision-making among larger groups. It is a technique developed for collective exploration of a problem state and potential solutions, with an emphasis on what works in an organisation rather than what is broken. Some people refer to it as the opposite of problem-solving as it builds on strengths, not weaknesses. Compared to other group decision techniques, AI differs by appreciating the strengths of the current state and steering the collaboration by carefully designing the questions raised in the decision process. If you want to explore this approach for your team(s), this very clear overview from the Center for Appreciative Inquiry is a great starting point.

• The Advice Process entitles anyone to make decisions, but they are obliged to first seek advice and consider integrating the input they receive. The bigger the decision, the wider the net must be cast for advice, including reaching out to leadership. As such, there is no prescribed format for how employees should seek advice. Depending on who they choose engage, they can ask colleagues in one-on-one discussion or gather relevant people for a meeting. However, the best way to do this is using digital workplace platform, especially if seeking advice from a larger group. This Medium post from Mark Eddleston is a neat summary of the approach.

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Elsewhen

Management doesn’t do science.

On Evidence-Based Management | Stowe Boyd (2018): In a stark expose of the anti-scientism in today’s management, Eryn Brown investigates the sad state of affairs in ‘evidence-based management’, where findings from scientific research could be applied to critical management initiatives and decisions, but generally are not.

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Red-Collar crime.

A Shocking Number of Killers Murder Their Co-workers | James Graham (2018):

In a 2010 study, researchers administered a test frequently used to gauge psychopathy to 203 managers and executives at seven companies. On a 40-point scale, the average person scores 3 or below. Shockingly, eight subjects pulled a score of 30 or higher, which is serial-killer territory. "Their excellent communication and convincing lying skills, which together would have made them attractive hiring candidates in the first place, apparently continued to serve them well," the researchers concluded.

How many office psychopaths turn violent is less clear: The FBI doesn't track red-collar crime, nor does OSHA. Richard G. Brody, another CFE and an accounting professor at the University of New Mexico, sometimes trawls the web for murder trials involving white-collar defendants, and has become convinced that red-collar crime is more prevalent than most people suspect. Detectives don't always spot such homicides, he told me, so crime scenes may be contaminated and murders may pass for suicide. "Whenever I read about high-profile executives who are found dead, I immediately think red-collar crime," he said. "Lots of people are getting away with murder."

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