Whether you are evaluating an M&A candidate, creating a strategic alliance, analyzing licensing deals, or determining what to do about a leaky and eroding pipeline, how you set up the discussion with your senior team has an immediate and lasting impact on the decision. How can your team make the best decision? Avoid these contaminants, and use these tools to decontaminate your decision-making processes for your most critical decisions.
Decision-Making Process Contaminants
Information availability: Avoid basing your decisions upon information you either have recently recalled or you vividly remember. Suppose you decide to select a new vendor for part of your manufacturing process. You’re guilty of this contaminant if you choose a vendor with whom you are comfortable and familiar, to the exclusion of others, based upon your requirements.
Confirmation Bias: This occurs when you look for data that confirms your theories about what should be done. You avoid (unconsciously) seeking information that disconfirms the evidence or process.
Anchoring and Adjusting: Once you commit to a course of action, even preliminarily, by saying “I think,” you anchor and adjust all discussions around that initial decision point. You see this with budget targets that start with last year’s numbers and then adjust upwards or downwards from that initial starting point.
Decontaminate Your Decision-Making Processes With These Tools
Question assumptions. Ensure assumptions are written and validated before deciding upon a solution.
Ask “cui bono” (to whose benefit). You want people to be passionate about the recommendation, yet you must solicit diverse opinions as well.
Validate what the problem is and when it needs to be solved. Clarify what success looks like, then review the process to confirm or disconfirm the proposed strategy to solve the problem.
Ask “what if that (the assumption) is not true?” Look for data that does not simply confirm the prevailing decision option.
Build consensus around understanding the issue, then look for diverse opinions on the solution. Take the time to ensure that everyone involved understands the issue and parameters at the outset. Follow that by looking for multiple solutions.
Question the numbers on spreadsheets or presentations. Dig into the numbers to determine underlying assumptions.
Allow all others to speak before you. Perhaps the best wisdom comes from a retired Navy Rear Admiral, who, during one of our seminars, reminded everybody, “When the boss says ‘I think’, the thinking stops.”
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