Archive for the ‘decision process’ Category

To have good decision-making, give people closest to the problem decision-making power

December 8, 2007

I think that these can safely be considered to be “laws”:

  1. Individuals closest to a problem have the most accurate and complete information about the problem.
  2. The further removed an individual is from a problem — by time, space, rank — the less information and the less accurate information he has about the problem.
  3. Good decision-making requires accurate and complete information.

Therefore:

  • To have good decision-making, give people closest to the problem the power to make decisions. For example, give decision-making power to those people on the factory floor.
  • Avoid centralizing decision-making power to a few individuals at the top of a hierarchy.

Unless people know what the truth is, it’s unlikely they’ll make the right decision

December 7, 2007

“Unless people know what the truth is, it’s unlikely they’ll make the right decision.” [Wisdom of Crowds by James Suroweicki]

If employees see problems and keep it to themselves, it leaves an organization without knowing the truth, and thus unlikely to make the right decisions and stunts organizational learning. For example:

“Those nurses whom doctors and administrators saw as most talented unwittingly caused the same mistakes to happen over and over. These “ideal” nurses quietly adjust to inadequate materials without complaint, silently correct others’ mistakes without confronting error-makers, create the impression that they never fail, and find ways to quietly do the job without questioning flawed practices. These nurses get sterling evaluations, but their silence and ability to disguise and work around problems undermine organizational learning. Rather than these smart silent types, hospitals would serve patients better if they brought in noisy types instead.”

Hard Facts by Jeffrey Pfeffer and Robert I. Sutton

Democracy doesn’t mean endless discussion, it means a wider distribution of decision-making power

December 5, 2007

During the 20th century organizations wanted to include more workers in the decision-making process. That is, organizations wanted to be more democratic.

To accomplish this, organizations formed lots of committees and groups for workers to participate in.

However, the actual decisions were still made at the top.

Democracy doesn’t mean endless discussion. Democracy means a wider distribution of decision-making power.

— Extracted from The Wisdom of Crowds by James Suroweicki

Consensus + Management Hierarchy = Poor Decision-Making

December 2, 2007

The idea that top-down organizations are oppressive and damaging, and that workers should be given more decision-making power is well-known to managers.

To involve as many employees as possible in the decision-making process, management forms lots of teams and committees, comprised of a variety of workers.

Thus, before a CEO makes any decision, the issue makes its way through each layer of management hierarchy. At each level the issue is vetted by a committee.

Each committee resolves the issue by reaching consensus (lowest common denominator).

As the issue bubbles up through the hierarchy the opinions and ideas become more and more watered-down.  By the time it reaches the CEO there is little innovation or diversity left.

Paradoxically, in trying to make the decision-making process as inclusive as possible, companies actually make top executives more — not less — insulated from the real opinions of the workers.

Layers of management, coupled with a “can’t we all get along” (consensus) attitude is a recipe for poor decision-making at the top.

— Extracted from The Wisdom of Crowds by James Suroweicki


Here is a related blog: Consensus versus Collective Decision-Making

Will you join me in a pledge to integrity – show both sides of a “solution”?

October 7, 2007

Portions of the below are from Hard Facts by Jeffrey Pfeffer and Robert I. Sutton:

Medicine

No drug is without side effects.

Most surgical procedures have risks and even when performed perfectly may have downsides.

Physicians are ethically obligated to reveal risks and drawbacks.

Doctors are getting better at explaining risks to patients and, in the best circumstances, enabling them to join in a decision process where risks and potential problems are considered.

Management

No management practice/program is costless and universally applicable.

All management practices and programs have strong and weak points, and even the best have costs.

That doesn’t mean companies shouldn’t implement a management practice, just that they should recognize the hazards.

Advocates of business practices rarely describe risks, problems that arise even in successful cases, or occasions when their wares are likely to be ineffective.

Admit the Flaws of your Solution

Admit the flaws and uncertainties of your “solution.”

Admit that your solution is the best you can build right now and, like all good ideas, will require constant modification as more is learned along the way.

You may make less money in the short term, but in the long term you will be seen as an honest, straight-talking person.  You will have integrity.

Pledge

I make a personal pledge that for the next year whenever I make a recommendation, propose a “solution,” or give advice, I will also describe all their problems that I can think of, and I will actively seek out their problems.

Will you join me in making this pledge?