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An Introduction to the Decision-Making Process

WHEN DO YOU MOVE FROM PROBLEM-SOLVING TO DECISION-MAKING?

Learning Objectives

At the end of this chapter you will be able to:

• Distinguish problem-solving from decision-making.
• Use good questioning technique to find the real cause of problems.
• Use a cause-and-effect diagram to structure critical thinking.
• Define and use a decision-making process.

The importance of decision-making in management is generally recognized. But a good deal of the discussion tends to centre on problem-solving, that is, on giving answers. And that is the wrong focus. Indeed, the most common source of mistakes in management decisions is the emphasis on finding the right answer, rather than the right question. Peter Drucker, management writer, educator and consultant

At this stage we need to be clear on the difference between problem-solving and decision-making. Just as decision-making must be followed by action, it is frequently preceded by problem-solving or finding causes. It is not a good idea to start the decision-making process to solve a problem if you are unaware of what is causing the problem.

This book is about decision-making, so I will limit this part on problem-solving to some simple, but effective, techniques that help with the logical search for the cause of a problem.

A sales manager was falling short of his target for the year's sales. He knew there was a relationship between the numbers of sales calls, or visits to customers his salespeople made, and the number of deals they signed up. He decided, therefore, to put in an activity monitoring system to check how many calls his people were making. After a month, armed with the statistics that the new system gave him, he set the members of the salesforce an objective to raise the number of calls they made. They did this and a small, though not proportionate, increase of sales came through. A few months later the number of calls had returned to normal, and the sales had settled back-still below target. Talking to a colleague he bemoaned the laziness of his people and attributed his failure to it. The colleague replied that over time she had come to understand that there is a limit, it might as well be physical, to the amount of time that salespeople spent in front of customers and prospects, and that any effort to increase that always failed. It seemed-in their business at least-that salespeople, with the best will in the world, could not spend more than 25% of their time on visits. The rest of the time was needed for preparation, keeping up to date with product, and so on. This forced the sales manager to reconsider the cause of the problem. He started to think about the quality of sales calls that his people were making and discovered that the sales collateral that the salesforce was using-brochures, demonstrations, and so on-could quite easily be improved. A decision to spend time and money on this, and doing more coaching, solved the sales problem by aiming at the actual cause. Remember, critical thinking means examining every assumption critically until it is no longer an assumption but a factor to be taken into account.

Complex Problem-Solving

Problem-solving provides good examples of the type of critical thinking that smart managers bring to decision-making. Finding causes of problems is not always straightforward. First you need to make sure you have the information to hand.

Some problems take a lot of effort to resolve, and others seem to hang around for a long time. One reason why problems remain unresolved is a lack of information or knowledge. Gathering data is time-consuming, and again a balance must be drawn between spending time building up a profile of the "evidence" and "getting on with it."

Smart managers ensure that every activity yields as much as possible in advancing the search for cause. This is particularly true when you track someone experienced down and ask some questions. Prepare carefully for such an encounter to avoid having to repeat the exercise later on because you forgot something. Finding the right people to talk to is not easy, so it is important to make the most of it.

It may sound rather obvious, but I am impressed during many hours observing people "troubleshooting" problems that most of the information they need can be gained by asking more of the right questions at meetings and telephone calls that are taking place in any case.

I keep six honest serving men
(They taught me all I knew)
Their names are What and Why and When
And How and Where and Who Rudyard Kipling

These lines of Kipling are the basis for thinking about the "open question." Open questions tend to start with one of Kipling's serving men. So we ask "How did you set about making the decision?", not a closed question such as "Did you buy from our usual supplier?"

Never underestimate the power of good questioning technique; it is a matter of phrasing questions in a format that makes sense for each particular situation. It takes practice but, once it has become intuitive, it helps smart managers in all sorts of situations, from making sales calls to holding appraisal interviews. After all, it taught Kipling all he knew.

The other side of active questioning is active listening. Smart troubleshooters avoid having an idea of a cause in their mind, and selectively screening information that supports or opposes their idea. If they are right then great, but if they are not, they have to go back to the start. "I must go and talk to Peter again ."

It is extraordinary how we can hear what we want to hear from a conversation.

How should a salesperson interpret the following words from a prospect? "I would like to buy your services; it's only a matter of time. Leave it with me." A rookie, wanting to hear that all was well, would record a definite sale in due course. A more experienced salesperson would hear doubt and ask further questions to see if there was anything still obstructing the prospect's willingness to buy.

Many people have a difficulty in listening to the answers to their questions for a simple reason-they do not like silence. They therefore spend the time that the interviewee is answering the first question in thinking about their second. The answer comes to an end, there is a short silence and the next question is put. Much better is to concentrate on the answer and find that the next question is directly derived from the response. Listen, interpret, and ask follow-up questions, and you are more likely to discover real causes of problems.

Finally, once we have asked smart questions and listened to the answers, it is smart to record the information in a format that aids analysis at a later date by you or by others. This means that it should not appear in text format as a long "essay." The answers may be there but they will be no easier to find! Using the questions as headings and adding facts in bullet point format into the appropriate section as and when they are gathered is probably the easiest way.

- - - - - - - - - - A Problem Well-Described Is a Problem Half-Solved Whilst training Japanese and European staff in a common approach to problem-solving and decision-making, we introduced an analytical approach to describing a problem. This in-depth analysis was initially resisted by the Europeans, who started from the point that they did not have time to sit down and think-they needed to do something. They got wiser and realized that many of the actions that they took to resolve problems had no impact on their resolution. They also found that the reason that they didn't stop to think was essentially a cultural one-the managers had created an "action-oriented" culture. This in itself was not bad, but it was starting to inhibit quality thinking. On the other hand their Japanese colleagues were very comfortable gathering and analyzing data before "jumping to a solution." There is an old Japanese proverb saying that "a problem well described is a problem half-solved" and when this organization took it to heart, things improved. A. Bruce, Creating a Market Sensitive Culture, Pitman, 1997. - - - - - - - - - -

The saving in overall time in solving problems can be substantial if the critical thinking process is completed in a structured way.

So we have identified a problem and we have gathered specific information from the people involved. Now we need to find out what caused it, or something like it, to occur. If we have involved the right people in gathering information, we will already know something about the problem and its likely cause. Incidentally, if it is common practice to maintain logs of previous problems and their causes in complex, high-value situations such as production lines, health, and nuclear power, why do we not do that in less dramatic circumstances?

For many long-term difficult problems, cause could originate in many places. Reflecting on the facts that have been gathered often provides some clues: "What could cause the problem to occur here and not in other areas-what is different?" or "What could cause the problem to occur at this time and not before-what...