Escaping the hamster wheel: Rational decision making in organizations

December 13, 2019

My previous blog focused on cognitive biases that I have encountered in the different organizations that I have worked in. This blog, in turn, will focus on three ways in which we can mitigate or reduce these biases so that our decisions and choices are more rational. It is important to remember that these techniques are not silver bullets but will rather help people to think more slowly and in steps and therefore in a more rational way.

Giving your opinion last

For the most senior people in the room- this is an important point to remember. When hosting or chairing a meeting where part of the goal is to obtain unbiased opinions and thoughts (so every meeting then) you should get everyone to voice their opinion before you do yours. This ensures that your view is not what guides and anchors everyone else’s view. As this becomes normal and appreciated, employees, at every level, giving unfiltered opinions will become the norm. We are able to minimize Herd Behavior and Anchoring with this technique.

Use reference models

I am sure some of you have heard about the Berlin Brandenburg Airport scandal. For those of you that don’t – after 15 years of planning, construction on the airport began in 2006 with plans for the airport to open in 2011. With massive delays in the execution, the airport is still not yet open, to this day, with a new planned opening date in 2020. It has always surprised me why we continue to use the same estimated timelines for projects when in reality we know that they never seem to run perfectly. A way in which we can minimize this is to use reference models and base project costs and time in facts. So, how do we do this you ask? Simple:

  1. Find other similar projects that have been completed. The more projects you have the better.
  2. Find the distribution of the time spent and the costs
  3. Compare your project and use this information to determine the most likely time and cost
  4. Learn! Compare the estimates with the actual result once the project is complete
  5. Add this knowledge to your growing data base of time and cost for projects

Challenging as part of the Design

There are multiple ways in which you can ensure genuine challenge and critique of ideas. One of these methods is to require and insist on challenge instead of only inviting it. This can be done using a method called a pre-mortem. Here we assume that a project has already failed. Those invited to the pre-mortem will then come up with all the reasons the project has failed. The project team can then use this list to improve their plan.

Another way in which we can elicit candor from in the critiquing of ideas and plans is through something called a Brain Trust. Pixar gets their movies to be great via this technique. In essence, what happens is that the first draft of a movie is screened to trusted Pixar employees who then critique the movie with total candor. This can be a brutal process, but the underlying philosophy is that the film, not the filmmaker, is under the microscope. This concept can be used in organizations when reviewing plans, reports, or recommendations. However, it is essential that the (company) culture welcomes honesty so that the work being critiqued is in the center, not the person itself. In other words, there must be a shared understanding that it’s all about product or service improvements. There’s no ego. This works because all the participants have come to trust and respect one another. They know it’s far better to learn about problems from colleagues when there’s still time to fix them than from the audience after it’s too late.

These techniques help minimize organizational tendencies towards over confidence and group think. We are now able to get diversity of thought in terms of critique but also solutions.

Finale

There are many other techniques we can use as debiasing tools in organizations so that our business decisions are rational and based on fact. Are there any that you have used? What has worked and what hasn’t worked? Let us know in the comments!