Making Better Bolder Decisions – Teachings from the Stanford Social Innovation Conference – Part One

Stanford Social Innovation Review is one of the best journals of its kind, talking about the evolving lines between non-profit organizations, business and government. Of course the kind of journal we are referring to deal with issues that are a lot easier to talk and theorize about then to actually achieve in a focused, sustainable way. And here at ‘From Hunger Into Health’ we’re dreamers and idealists, but also hard-nosed types who have to live by our wits, and where the first question out of our lips is: “Sounds great, but is it free?”

That’s why it’s always been great that SSIR holds a yearly conference at Stanford Alumni Center that focuses much more in the art of the practical. Real nonprofit leaders from around the world come together for a couple of days to hear some of the latest ideas and share their tales from the trenches.

Stanford Alumni Center – Why is the Alumni center always one of the flashiest buildings on campus? Because the development department knows where the graduates are, and they will track you down…

This was my third year of attending. I always like to go as it is a nice stimulus. Of course my staff dread me attending, because it means I will return with EVEN MORE NEW IDEAS THAT I WILL EXPECT OTHERS TO EXECUTE. Not entirely true, as a lot of execution has to come from me too. I thought that this year it would be good to share some of my learnings on this blog, so saving you money and freeing up your time. I’ll do a number of posts in the coming few months. We start off with MAKING BETTER BOLDER DECISIONS, a lecture given by Stanford faculty member Chip Heath, which will be (surprise, surprise) drawn from his upcoming book.

Chip Heath

Yes, wisdom can come from the mouth of someone called Chip, and Chip Heath is (with the assistance of his brother Dan) the author of the book ‘Switch: How to Change Things when Change is Hard (Broadway Books) which made a pretty good fist at dealing with what is a daily subject here at Food Bank Central.

Chip started with some sobering statistics. (Actually he probably started with a joke, but i’ll spare you.)

  • 60% of top business executives admit their bad decisions are as frequent as their good ones.
  • ‘People’ decisions are the hardest and most important. Yet 40% of top level headhunting fails within 18 months.
  • The dropout rate amongst teachers is higher than that of students.

So how can we improve this challenging area? After all this is why they pay us the big bucks, to make decisions, right? The standard advice out there is to ‘trust your gut.’ But Chip points out that the human gut is not always particularly trustworthy. He put up a slide of a slice of the Cheesecake Factor Red Velvet Cheesecake, which has as many calories as three double cheeseburgers and a bag of Skittles.

So much for trusting the gut. (This brought back a tear of nostalgia from a Feeding America national summit a couple of years back, when we left the auditorium after a stirring discussion of good nutrition, only to find complimentary slices of Cheesecake Factory Peanut Butter Cheesecake waiting for us – hey, they were sponsors, what can you do?)

Ok, so the gut is in doubt. Other people say trust the experts, trust analysis. Ye 83% of mergers and acquisitions – which only occur after incredible degrees of expensive analysis – end up creating no financial value whatsoever. If you always said no to a merger or acquisition, you’d be right 5 times out of 6. Remember, ‘the experts are often wrong, but never in doubt.’ The average completely certain medical diagnosis is wrong 40% of the time. The average cost overrun on new plants is 56%

So, expertise is not getting us where we need to be, and the problem is compounded by the fact that with most decisions we don’t get enough specific feedback to know what was really a bad decision anyway.

There are experts…and then there is Mr. Miyagi. He’s the real deal.

Intuition, says Chip, is a machine for jumping to conclusions. It is a narrow perspective from which to view the world. It is also more about having an immediate reaction to an opportunity. He asked us to consider the concept of a ‘spotlight’, which is how we look at something that requires a decision. Spotlights are close up and good for highlighting info, but they tend to throw other options into the darkness. We need a process to help us move the spotlight around to be able to consider all aspects of a decision.

It was then that Chip hit us with his acronym. A couple of hundred note takers in the audience breathed a sigh of relief – at last a nice juicy acronym to add to our voluminous collections.

WRAP

Widen options

Reality test your assumptions

Add distance to the choice process

Prepare to be wrong.

The problem with decisions is that if we have two choices we are very likely to choose the clunker. If we have more options it will lead to a better rounded decision. The concept of reality-testing your assumptions is because we can’t help suffering from ‘confirmation bias,’ where we go out searching for information that confirms our initial view. The concept of ‘adding distance’ is there because we need perspective to get away from the short term anxiety that clouds a decision. Distance at time of choice is valuable. The final element is ‘prepare to be wrong.’ If we can move beyond seeing the success of our decision as the only possible result, then we can be more prepared for the different future that might show up.

Let’s look at these areas in a little more detail.

Widening Options

We tend to think choices are an ‘either/or’ thing. Chip called this the decision making process most commonly adopted by teenagers. It is expressed as a ‘whether or not,’ as apparently teens rarely consider that they have multiple options.

Professor Paul Nutt at Ohio State University made a study where he looked at key decisions that business and nonprofit organizations have made. His approach was to contact multiple decision makers and also those who were involved but outside the direct decision making process. He discovered that 71% of these crucial decisions (168 in total) were simple ‘whether or not’ choices with no third option considered. This means that organizations are operating like teenagers. So if you hear should we do this or not then alarm bells should ring warning you that you have a narrow framing of the situation without adequate options to choose from. If you view the future as range of possibilities, then you have room to make a better decision.

He brought up the example of an organization called HopeLab. They wanted to design an activity monitor for teens to measure how physically active they were and to provide some kind of reward system. (the product is called Zamzee and check it out at www.Hopelab.org – interesting company and product).

To design this product, they considered 6 or 7 potential partners. Normally it would have been a straight horse race and they would have agonized over who to bet on. Picking partners based on how they impress you in a meeting can be dangerous. (Especially if you want to move beyond the gut situation).

So HopeLab thought: why not buy the horserace? They broke down the project to smaller stages and hired five of the companies to each do the first small part of the project to see how well they did and how HopeLab worked with the outside partner. This is not as onerous as it sounds, because you can typically eliminate a couple straight out of the gate as a result of them being bad to work with or not to have any real ideas, however impressive the binders were at their presentation.

This process is also an opportunity to really look at what you are trying to achieve. If a particular approach keeps coming up as important in multiple people’s work, then it would be good to include it in the finished product or service. In HopeLab’s case, two firms had brilliant ideas. They had the luxury of combining the best features from each and now had two proven partners to choose from. At this point they could make their choice or even run the race again with the next stage of the project.

Our kneejerk response might be that by doing this, we were making at least part of the project five times more expensive than it needed to be. The rebuttal to that would be that we are improving the actualization of the project in a way that is going to save us a lot more money further down the line when things get really expensive – far more than you spent when things were cheaper at the beginning. So instead of getting stuck on ‘either/or,’ maybe think ‘this AND that’ and you may be able to achieve more.

Reality Testing Assumptions

Reality testing is doing what it takes to get the data, and not just the data that confirms what your gut tells you. ‘Confirmation bias’ is a particular problem when there is ambiguity. We want to confirm what we believe. Data that supports us is always going to interest us more than that that which does not.

Clearly sometimes there is no data to draw on. It this case, there is a value to testing. So in the case of recruiting, people put way too much store on the interview, even though this is not the most predictive indicator to future job success. Another alternative is have people do work samples. Why predict if you can know? Most of us could, with a bit of thought, come up with some way of asking people to produce a sample or demonstration of their work no matter what job they were applying for.

The best defense is to force yourself to ask disturbing questions: Why are we not likely to finish this project on time? Why should we not start this program? Sometimes non-comfirming questions can be positive.

Another element that Chip brought in for us to consider in the decision-making framework was our own attitude. Specifically, that we should be always trying to assume positive intent on the part of other people we are dealing with. Often our first reaction is to assume negative intent. We are always listening out for criticism. If we assume positive intent, we will be amazed what happens, because we are always downplaying the positive. He produced statistics showing that when married couples keep a marriage diary, where they write down the things that make them happy, that 70% of relationships improve. This is because typically we dismiss the good stuff and focus on the negative.

Add Distance to the Process

The villain in the decision making process is short-term emotion – getting caught in the here and now and not looking at the long term implications of decisions. You don’t always have the luxury of sleeping on the decision. Chip brought up an amusing example of how we would advise our best friend if he/she was asking us whether they should call an unattached person they had admired or whether they should attempt to continue making a favorable impression in their shared work/study environment for longer so that their approach might be more likely to succeed. If the friend was agonizing, we would all say ”just call him/her’. That is probably the right recommendation. Yet when the decisions are ours, then our fears and anxieties can win out or slow things down. So, next time you face a tough decision, just ask: “What would I tell my best friend to do?” Distance helps us identify the core priorities. That is the approach you should take. Identify your core priorities and enshrine them in your decision making process.

Prepare to be wrong

I think this is a much overlooked stage of the decision-making process. Overconfidence can blind you to preparing for an environment where you decision doesn’t work out.

It’s a pre-mortem, but it won’t hurt hardly at all…

As part of the decision-making process, consider conducting a ‘premortem.’ Don’t just focus on your best picture of the future. Imagine your organization a year from now, and the new project has been a disaster. Ask those involved with and impacted by the decision what happened? If you move that spotlight to what could cause a bad result, you will be surprised how accurately people can tell you what and why things went wrong.

The ‘Pre-parade’

This not only keeps you ready for the range of possibilities that is the future, but also helps you make a better decision in the first place. The process isn’t all negative either because you should also conduct a ‘pre-parade.’ This is a consideration of what happens if you are wildly successful. Will you be prepared? Will you build expectation to deliver something where you can’t meet the huge demand or interest?

The Tripwire

 

RETHINKING A DECISION

The final element of the decision-making process is to consider when do you rethink a decision? The need here is for tripwires. These are agreed markers of success (budgetary/timeline/project achievement) at key early stages, so you can be confident that things are starting off and continuing in the way that they need to, in order to lead to success.

Chip told us the story of rock band Van Halen and their infamous ‘no brown M&M’s’ rider. This has always been held up as an example of unbridled rock star excess. In fact the band were shrewd business people and by burying something like this in their detailed contract to perform at a venue, it acted as a tripwire to see whether the venue had read the stipulations of the contract in detail. If there were brown M&M’s in the dressing room, then this raised the alarm for a detailed check into more life or death issues such as electrical safety.

Having a process is the answer with decision making, according to research. Systematically ask questions both of the matter to be decided and also your own attitudes to it. Your decision-making can never be perfect – but it can be better.

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