Are you ready to decide?

Article from McKinsey Quarterly by Philip Meissner, Oliver Sibony, and Torsten Wulf

Some pointers that I've got are:

Confirmation bias - Our unconscious tendency to attach more weight than we should to information that is consistent with our beliefs, hypotheses, and recent experiences and to discount information that contradicts them.
Overconfidence bias - Frequently makes executives misjudge their own abilities, as well as the competencies of the business. It leads them to take risks they should not take, in the mistaken belief that they will be able to control outcomes.

Since executives won't get very far by focusing directly on biases, they should consider instead whether safeguards against them have been used. In other words, leaders should ask about the process used to develop the proposal, not about the proposal itself or the degree of confidence it inspires. Questions below helps in the evaluation of the process in the context of the two main categories of biases described earlier.

This first set of questions "Consideration of different points of view" aims to determine whether the confirmation bias has been kept in check. These questions focus on the sources of assumptions and the diversity of opinions expressed. A broad set of sources (including outside views) or a diverse set of opinions is a good indicator that the initial assumptions of the decision process have not gone unchallenged.

• Have the recommenders checked their assumptions?
• In their analysis, have they considered factors that would make the project exceed its initial goals?
• Have they compared their assumptions with those made for a comparable external project?
• Have they compared their assumptions with those made for a comparable internal project?
• Have the recommenders integrated a diverse set of opinions?
• Have they assembled a diverse team for the decision making process?
• Have they discussed their proposal with someone who would most certainly disagree with it?
• Have they considered at least one plausible alternative to the course of action being recommended?

A second set of questions "Consideration of downside risk" asks whether the possibility of negative outcomes - including company-, industry-, and macro-level downsides - has been thoroughly evaluated. Such an evaluation can act as a safeguard against overconfidence

• Inside the organization, what are the decision's two most important side effects that might negatively affect its outcome? Have the recommenders considered these side effects?
• Side effect A
• Side effect B
• In the company's industry, what are the two most important potential changes that might negatively affect the outcome of this decision? Have the recommendation considered these changes?
• Potential industry change A
• Potential industry change B
• In the macro environment, what are the two most important potential changes that might negatively affect the outcome of this decision? Have the recommenders considered these changes?
• Potential macro-environment change A
• Potential macro-environment change B

On each dimension, the questions are designed to be flexible, so that the circumstances of the decision at hand can be taken into account. Once the questions have been answered (with a simple yes or no), the responses can be transcribed on a matrix. This scoring will place the proposed decision in one of the four quadrants, leading to different courses of action. 

• Decide (3+ yes "Consideration of downside risk and 3+ yes "Consideration of different point of views"). This quadrant represents the most favorable outcome: the process that led to such a decision appears to have included safeguards against both confirmation bias and overconfidence.
• Reach out (3+ yes "Consideration of downside risk and 0-2 yes "Consideration of different point of views"). Proposals that fall in this quadrant have been tested for their resilience to downside risks but may still be based on overly narrow assumptions. Decision makers should consider techniques that broaden their perspectives and help them generate meaningful alternatives. One such technique is the vanishing-options test: executives force themselves to generate new ideas by imaging that none of the proposals on the table are available. 
• Stress test (0-2 yes "Consideration of downside risk and 3+ yes "Consideration of different point of views"). Decisions in this quadrant reflect a variety of viewpoints but, nevertheless, may not have been sufficiently challenged and could therefore be tainted by overoptimism. Executives should consider a thorough outside review of the possible risks - for instance, by conducting a premortem or asking an outside challenger to play the role of devil's advocate.
• Reconsider (0-2 yes "Consideration of downside risk and 0-2 yes "Consideration of different point of views"). When this appears, the process has probably not been comprehensive. Decision makers should therefore follow a dual strategy that generates both new perspectives and new reviews of risks. 

A key question is who answers the questions in the tool. Since individuals developing a recommendation will not be aware of their biases, they cannot be expected to assess their own decision readiness. The answers must therefore come from the outside: Not the executive who has driven the decision process, but other ho have a more neutral view.

In practice, decision makers will be in one of two situations. In the first, and easiest, they reviewed recommendations prepared by others but had minimal involvement in developing them. In that case, decision makers are well placed to address the screening tool questions themselves.

But in the second and more frequent case, the decision makers were actively involved in studying decisions that have now reached the final stage. In this case, they no longer have an outside view of the process and will need to seek out answers from informed observers: staff members, such as the CFO; colleagues from other parts of the organisation; or outside advisers. Some companies will wish to define this role in advance and make it a formal part of their decision-making process, to void having a respondent who shares the decision maker's point of view.

Yours,
Something Small Thinking Big

Never run out of ideas

This post came out from The Straits Times (21 August 2014)
Title - Never run out of ideas

Some pointers that I've got are:
1. Individual thinking (7 minutes)
2. Deposit ideas (1 minute per member or 5 minutes' total duration for the group)
3. Elaborate on ideas (10 minutes)
4. Apply to context (15 minutes)
5. Showcase the solution (3 minutes)

On Individual thinking

• The first stage require each member to quieten his mind and focus on the topic to be brainstormed. Members do not engage in verbal communication or discuss ideas with one another - this is to withhold any criticism that may cancel ideas out. Using the mind map format, every member will generate ideas quickly by writing the keywords on each branch - a brain friendly process known as idea blooming.

On Deposit ideas

• With their mind maps drawn, members will take their turn and run through their ideas within a specific time. At this stage, ideas are being deposited with the group because there should not be any elaboration or clarification done.
• Due to the mind map's connecting branches, the others can start to connect the ideas deposited onto their own mind maps - focusing on quantity and creating more ideas.

On Elaborate on ideas

• Everyone can now discuss the list of ideas openly and elaborate further. The aim is to welcome all types of ideas, even if they may be unusual or unpractical. 
• These can 'seed' ideas that can combine with the other ideas to form a better and practical solution. As a group, they will pick the top three potentially good ideas which will then be developed into feasible solutions. 
• A feasible solution here refers to something which will improve the current situation using the least cost and implemented in the shortest possible time. 

On Apply to context

• The group will focus on applying the selected ideas in the brainstorming context, which is to address the "how" question.
• The aim is to go deeper into developing the solution and substantiate it with clear benefits. At this stage, the group will illustrate its recommended solutions by drawing the mind map on a larger piece of flipchart paper.

On Showcase the solution

• Depending on the required output, the group can showcase the recommended solution to management for approval. The presentation is done using the group's mind map which is visual and concise in its branch like associations. 
• The mind map also serves as a good documentation for future review, because it can capture all the other ideas generated and describe the final solution proposed. 

Yours,
Something Small Thinking Big

Design Thinking Comes of Age

Article from Harvard Business Review by Jon Kolko

Some pointers that I've got are:
1. What is a design-centric culture?

• Focus on users' experiences, especially their emotional ones. To build empathy with users, a design-centric organisation empowers employees to observe behaviour and draw conclusions about what people want and need. Those conclusions are tremendously hard to express in quantitative language. Instead, organisations that "get" design use emotional language (words that concern desires, aspiration, engagement and experience) to describe products and users. Team members discuss the emotional resonance of a value proposition as much as they discuss utility and product requirements. 
• Create models to examine complex problems. Design thinking, first used to make physical objects, is increasingly being applied to complex, intangible issues, such as how a customer experience a service. Regardless of the context, design thinkers tend to use physical models, also known as design artifacts, to explore, define, and communicate. Those models - primarily diagrams and sketches, supplement and in some cases replace the spreadsheets, specifications and other documents that have come to define the traditional organisational environment. They add a fluid dimension to the exploration of complexity, allowing for nonlinear thought when tackling nonlinear problems. 
• Use prototypes to explore potential solutions. In design-centric organisations, you'll typically see prototypes of new ideas, new products, and new services scattered throughout offices and meeting rooms. Whereas diagrams such as customer journey maps explore the problem space, prototypes explore the solution space. They may be digital, physical, or diagrammatic, but in all cases they are a way to communicate ideas. The habit of publicly displaying rough prototypes hints at an open-minded culture, one that values exploration and experimentation. Design-centric companies aren't shy about tinkering with ideas in a public forum and tend to iterate quickly on prototypes. 
• Tolerate failure. A design culture is nurturing. It doesn't encourage failure, but the iterative nature of the design process recognizes that it's rare to get things the first time. Employees in every aspect of the business must realize that they can take social risks - putting forth half baked ideas, for instance, without losing face or experiencing punitive repercussions.
• Exhibit thoughtful restraint. Many products built on an emotional value proposition are simpler than competitors' offerings. This restraint grows out of deliberate decisions about what the product should do and, just as important, what it should not do. By removing features, a company offers customers a clear, simple experience. 

2. What are the challenges?

• Accepting more ambiguity. Design doesn't conform easily to estimates. It is difficult if not impossible to understand how much value will be delivered through a better experience or to calculate the return on an investment in creativity. 
• Embracing risk. Transformative innovation is inherently risky. It involves inferences and leaps of faith. If something's hasn't been done before, there's no way to guarantee its outcome. Leaders need to create a culture that allows people to take chances and move forward without a complete, logical understanding of a problem.
• Resetting expectations. As corporate leaders become aware of the power of design, many view design thinking as a solution to all their woes. Designers, enjoying their new level of strategic influence, often reinforce that impression. Design, however, do not solve all problems. It helps people and organisations cut through complexity. It is great for innovation and works extremely well for imaging the future. But it's not the right set of tools for optimizing, streamlining, or otherwise operating a stable business. Additionally, even if expectations are set appropriately, they must be aligned around a realistic timeline - culture changes slowly in large organizations. 

Yours,
Something Small Thinking Big