Cultivating Judgment: Decision-Making Strategies for Managers

1. Cultivating Judgment: Decision-Making Strategies for Managers

2. Housekeeping • Course materials • Roster (at end of session) & evaluations (email sent after course) • Bathrooms • Break • Cell phone & computer usage • Refreshments

3. Objectives • Overall objective: • To cultivate the quality of good judgment; to improve our ability to consistently make better decisions • More specifically, you will be able to: • Define judgment and describe its importance for leadership • Describe and apply a process for improving judgment • Identify and implement some helpful decision-making strategies

4. UF Leadership Competency Model

5. Judgment: What is it?

6. Judgment: What is it? • Judgment • “a contextually informed decision-making process...”* • Contextually informed includes knowledge of and from self, team, organization, stakeholders • Process involves three phases: preparation, call, execution * Bennis and Tichy

7. Judgment: What Makes it Hard? • What are some of the challenges that make consistent, great decision-making so hard for managers?

8. Judgment: Can it be Learned? • Why do well-intentioned, smart, experienced professionals make poor decisions far too often? • “We believe it is because they haven’t been taught a disciplined process for making winning decisions.” • Russo and Schoemaker

9. Judgment: Can it be Learned? • Consistently, experts say…better decision-making can be learned and judgment can be improved! • “Leadership decision-making is not a natural capacity, and since those in leadership positions tend to make predictable decision errors, they are also preventable.” • Michael Useem (italics added)

10. The Judgment Process

11. The Judgment Process • Three phases • Preparation • Sense/identify • Frame/name • Mobilize/align (people and processes) • Call • Get the timing right • Execution • Make it happen • Learn and adjust Strategy #1: Know and consider the full judgment process when making a decision

12. The Judgment Process Preparation Sense/Identify Frame/Name Mobilize/Align Call Get the Timing Right Execution Make it Happen Learn/Adjust

13. The Judgment Process: Preparation

14. Preparation: Sense • Sense/identify • One of the first aspects of good judgment is just sensing that an issue is on the horizon that needs to be considered… • Key principles: • Confront reality – “Failure to face reality and see the need to change has often had disastrous consequences.” – Bennis and Tichy • Be paranoid – You must look over the horizon at tomorrow’s environment, be paranoid, and reinvent the organization. – Andy Grove Strategy #2 Strategy #3

15. Preparation: Sense • Sense/identify • Key principles: • Practice “purposeful abandonment” – what got you here, won’t get you there! • A consistently changing environment often requires finding new approaches • Letting go of methods, tools, processes that were once successful Strategy #4

16. Preparation: Frame • Frame/name • What are “frames”? • What do you see?

17. Preparation: Frame • Frame/name • What are “frames”? • What do you see?

18. Preparation: Frame • Frame/name • What are “frames”? • What do you see?

19. Preparation: Frame Without lifting your pencil (or pen) from the paper, draw four (and only four) straight lines that connect all nine dots…

20. Preparation: Frame

21. Preparation: Frame • What are frames? • Frames are our perspectives – through which we see, understand, and make sense of the world • Much like looking out of a window… • We see the world through the window, but typically don’t see the window itself… • Moreover, we see different things depending on the window through which we are looking! • Frames can be “sticky”

22. Preparation: Frame • What are frames? • For example, do you tend to see your organization more as a… • Factory or well-oiled machine • Family • Jungle or battlefield • Church or temple • Managers tend to view their organizations with different “frames” – e.g., structural, human resource, political, symbolic* * in Bolman and Deal

23. Exercise

24. Preparation: Frame • What does this mean for decision-making? • The perspectives through which we view the world can limit the decision-making options we can see

25. Preparation: Frame • What does this mean for decision-making? • Challenge your frame: Take multiple perspectives; consider different frames • Use frames to your advantage – “the power of the first draft” • Know your vision and frame the decision with that in mind Strategy #5 Strategy #6

26. Case Study

27. Preparation: Mobilize • Mobilize/align (people) • Remember that the judgment process is “contextually informed” (by self, team, organization, stakeholders) • A key piece of the judgment process, then, is relationships • Judgment comes not just from the specifics of the decision-making process, but from our relationships • Leaders with good judgment have cultivated good relationships!

28. Preparation: Mobilize Strategy #7 • Use an inner and outer circle • A small circle of trusted advisors (or a team with high trust) is important for good and timely decisions… • Unless you only rely on your inner circle • Also have a large outer circle of diverse advisors (that can be called upon to provide a different perspective) • Stakeholders, experts, and even opponents • Leaders and managers with good judgment typically utilize both

29. Preparation: Mobilize • How do you handle groupthink?

30. Preparation: Mobilize How do you handle groupthink? Strategy #8

31. Preparation: Mobilize • How do you handle groupthink? • Pick people with different perspectives • Cultivate and encourage task-oriented conflict • Foster teambuilding and team trust • Minimize personality conflict • Also, stress (past the panic point) reduces decision-making effectiveness – high trust teams help reduce stress Strategy #9

32. Preparation: Mobilize • Mobilize/align (processes) • Use processes to maximize intelligence gathering and avoid common decision-making errors • True or false: • When people have greater access to more information, they make better, more informed decisions… False! Researchers found that the greater the access to more information, the more people used it selectively to support preconceived positions, erroneously assuming that the quality of their decisions had improved! (cited in Russo and Schoemaker)

33. Preparation: Mobilize • Common error: wishful thinking/distorting information • We commonly interpret objective data to align with our preferences • How can we address this error? • Ask disconfirming questions • Entertain and test multiple hypotheses – make it a habit to explore a variety of possible hypotheses Strategy #10

34. Preparation: Mobilize • True or false • The leading cause of death in the U.S. is heart disease • Violent crime in schools has increased dramatically since 1994 • In response to a series of incidents of children being seriously harmed or dying from Halloween candy that had been tampered with, safety advocates began recommending that parents check candy before allowing children to eat it

35. Preparation: Mobilize • True or false • In 2007, more people died in motor-vehicle accidents than from kidney-related disorders • The rate of sexual activity among young adults (ages 15-24) in the U.S. is at its highest in 30 years

36. Preparation: Mobilize • Common error: availability bias • Our perceptions are distorted by the most available, most vivid, or most recent information… • How can we address this error? • Look beyond the most available data • Are you being unduly influenced by data that is simply more available, vivid, or recent? • Is the data representative? Strategy #11

37. Preparation: Mobilize • Common error: anchoring effect • Readily available (but not necessarily relevant) numbers or ideas distort our final judgments because people fail to adjust away from them sufficiently • How can we address this error? • Be aware of it… • Provide a range first, not a single-point value • Work with multiple anchors (e.g., best-case, worst-case) • Avoid considering only incremental solutions Strategy #12

38. Case Study

39. The Judgment Process: The Call

40. The Call: Timing • When to make the call…and how much is too much!? • Does more time, analysis, and information always lead to better solutions? • Study of horsehandicappers*with 5, 10, 20, or 40 pieces of information…confidence goesup, accuracy goes down! *in Russo and Schoemaker

41. The Call: Timing • When to make the call… • Consider using the 70 percent solution (U.S. Marine Corps) • When you have 70 percent of the information, have done 70 percent of the analysis, and feel 70 percent confident…make the call! Strategy #13 *in Useem

42. The Judgment Process: Execution

43. Execution: Make it Happen • Good decisions can fail because they aren’t executed effectively • Effective judgment requires the leader see it through • Key characteristics • Communicate the decision and the why of the decision • Stay in the game, stay involved • Plan the implementation • Set clear milestones • Support those making it happen Strategy #14

44. Execution: Learn and Adjust • “Leadership judgment is a process; the final outcome can sometimes be dramatically altered in the execution phase.” • Bennis and Tichy

45. Execution: Learn and Adjust • Key characteristics • Get feedback – be intentional about how you will get feedback along the way • Make adjustments – sometimes this may even mean using a “redo loop” and “going back” a step • e.g., if you haven’t mobilized and aligned effectively, you may learn that you need to go back, even if you (personally) are comfortable with your decision Strategy #15

46. Exercise

47. So…What Makes it Hard? • Why do well-intentioned, smart, experienced professionals make poor decisions far too often? • Because we have to make a lot of decisions and we have to make them quickly… • We rarely consider how the issue might look from another perspective… • We rarely consider how our decision aligns with our vision for our department…

48. So…What Makes it Hard? • Why do well-intentioned, smart, experienced professionals make poor decisions far too often? • When we make decisions in groups, we are often either too nice (and let others sway us even when we have reservations) or too contentious (letting personal differences get in the way)…

49. So…What Makes it Hard? • Why do well-intentioned, smart, experienced professionals make poor decisions far too often? • If we do base our decisions on data, they are often based on either the first reliable information we get, the loudest, or the information that confirms what we already think… • Once the decision is made, we don’t pay enough attention to its implementation…

50. The Good News • Because these types of errors are predictable, they are preventable… • By using a disciplined process, we can make better decisions and cultivate good judgment! • Prepare – sense/identify, frame/name, mobilize/align • Make the call – get the timing right • Execute – make it happen, learn and adjust