I think it’s ironic that many decisions at the top of organizations are made with less emphasis on considering alternatives and collecting data than some decisions at the bottom of an organization. We would never think about sending out a request for proposals and entertaining only one proposal. But that’s what the research says: For strategic decisions made at the very tops of government or business or nonprofit organizations, the typical number of strategic alternatives that leadership teams consider is one. We’d be upset if our employees on the front line were only considering one supplier, or one potential solution for a problem.
A leader joins an organization and doesn’t have a lot of information about how the place works. What advice would you give about how quickly to act on instinct vs. how much time to spend gathering more information?
The research literature is pretty clear that instinct is reliable in situations where we have about a decade of experience in the situation. So if you’re a manager taking over a position in an organization you know well and an environment you know well, you should definitely trust your instincts. If you’re taking over a new position or a new group or a new functional responsibility, you might want to hold back for a while and consider some different options.
Before you make any changes, consider a couple alternatives. We tend to act in a way that psychologists call “confirmation bias.” Information that is consistent with our initial hypothesis — that supports what we initially believe — is just more readily available and more attractive to us. So what I would say is take the time to look for reasons you might be wrong as well as reasons you might be right.
Why do some people become incapacitated by indecision?
Being indecisive is very often a cue that we lack attractive options or the right information about those options. There was a great paper a few years back by a Stanford researcher named Kathleen Eisenhardt that said that top leadership teams in Silicon Valley who consider more options and more online, real-time information actually make decisions faster than teams who consider fewer options.
If we feel like we’ve only got one alternative and it’s not a very good alternative, it’s hard to get excited about choosing that, and so we spin our wheels.
There are some simple things that you can do, like considering alternatives so that you have a fallback or setting a tripwire. Setting a mental trip wire is a way of establishing another decision point in the future, so that if we get into a bad situation we’ll revisit it. That gives more comfort to the person who’s initially indecisive. Any problems are bounded.
What are some of the other big issues?
One of the things that people have responded to most in the book is the idea of “ooching” [or inching our way] into a decision. If we have confirmation bias, one of the best ways of testing out our assumptions is to actually do something.
I love the example of Intuit in India, where they had a proposal from someone on the team for a new kind of messaging service for Indian farmers. In the typical organization, this would have been debated in a series of PowerPoint presentations and a series of arguments, but at Intuit they had a culture of experimentation and they said, “All right, run it.”
At this point they have something like 350,000 farmers using this, whose income has increased 20 percent based on the information they’re getting from the service. That never would have happened in an organization where we’re all entrenched in our positions and have to debate our assumptions of the world rather than going out and testing.
What are your thoughts on how to make better hiring decisions?
One of the most brilliant moves ever made in an organization was by Anne Mulcahy when she was turning around Xerox. She essentially said, “Look, we always claim that people decisions are the most important decisions that we make, and so from now on whenever we make a senior-level hire, I want at least three viable candidates for that position.” And when she said three viable candidates, she meant really viable candidates — as in, someone on the hiring team would actually defend each person.
I love the Kissinger line about how in many bureaucracies and many government situations you get three alternatives, but they’re essentially the equivalent of nuclear war, surrender or current policy. Those are not three good alternatives. But if you’ve got someone on the hiring committee who will actually go to bat for each of the three candidates, you’re going to understand much more in that decision process about what the job requires and what the skills of the particular candidates are.
What Mulcahy did by forcing three people to be considered for these important decisions is she short-circuited a lot of the confirmation bias. Psychologists have lots of research that things like height and attractiveness turn out to matter in job situations, and they really shouldn’t. The confirmation bias kicks in and you think the tall, good-looking man or woman is the best candidate.
What about decisions to move on from a job or to switch career tracks?
Very often when kids are applying to graduate school in, say, pharmacy, they really don’t have a clear idea of what it means to be a pharmacist. But if you’re going to spend the next three years and $150,000 doing this, why not collect that information upfront? In the job situation, we may not be able to shadow for a hundred hours somebody who’s doing the job we want to do, but wouldn’t it be worth three good conversations with people who currently have that kind of job?
Don’t just ask them, “What do you like about the job?” Ask them specifically, “What do you hate about the job?” If you go into the job with open eyes, knowing what the best and the worst are, you’re going to be more happy with your choice.
It seems we often don’t give big decisions, like attending graduate school, the time and robust thought they need, but we can overthink small decisions.
We would never think today about buying a television without checking the reviews on a Web site. And yet many times we aren’t systematic enough in the job situation about collecting even three data points or four data points about what it’s like to be in that job and whether people enjoy it or not.
Similarly, businesses make decisions about mergers and acquisitions that are hundreds of millions of dollars, and to the senior leader it seems like, “Well this is a different situation than the last acquisition we made.” And yet in that room making the decision is a set of people who have probably seen a dozen acquisitions, but they don’t take the time to do even the equivalent of the three-out-of-five-stars rating that we would get from Amazon.com.
Why do you think that is?
The kind of decisions that senior people make always present themselves as though they are completely different than anything else. Big decisions are subtle in a way because they all seem to come one at a time. The advantage of smaller decisions is we realize we are in a repeated situation where we’re going to see the same thing a lot.
Yet lots of big decisions end up having that property as well. If we take the time to move our mental spotlight around, we can always find other decisions that are similar to this one. We think the chief financial officer we’re trying to hire is in a unique position in the company, and that this is a unique position in time with unique demands. But the fact is, we’ve made other senior hires and we know how that process goes. Stepping back and taking in the broader context is just as useful for senior leaders as it is for the frontline worker who’s making a decision on the 35th mortgage application or the 75th customer complaint.
What have you personally taken from working on this book?
I’ve been struck by how often I don’t consider more than one alternative at a time. It’s just so seductive to get an opportunity that you often don’t think about it in the broader context of all the decisions you’re making. And you don’t step back and think, “Are there ways of doing this and that?” Things that seem mutually exclusive very often are not. Take the time to ask yourself, “Is there more than one thing that I could do here?” That’s been incredibly useful to me in my personal life.
A lot of leaders have the experience of waking up at 2 a.m. and starting to think about a decision. All of a sudden the adrenaline kicks in and you’re wide awake. The advantage of having a process that’s systematic is, if you know you’ve considered multiple alternatives and you know you have a trip wire set so you’re never going to go too far wrong without reevaluating, there is comfort in knowing you’ve done everything you can do. There are times that helps me get back to sleep.
How do you know when you’ve landed on the right decision?
The closest thing to a decision-making magic trick that I’ve found is the question, “What would you advise your best friend to do if they were in your situation?” So often when I ask that question, people blurt out an answer and their eyes get wide. They’re shocked at how easy it is when you just imagine you’re advising someone else.
Cunningham edits On Leadership for The Washington Post. Follow her on Twitter at @lily_cunningham.
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