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How to make the tough decisions

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Kathy Gibson at Gartner Symposium, Cape Town – CIOs find themselves in the difficult position of having to make decisions that may change the organisation — often without sufficient information, analysis or time.”Digital is here,” says Parther Iyengar. “And digital is, if nothing else, uncertain,”This means not all the outcomes are obvious upfront. “But you cannot afford to get stuck in analysis paralysis,” he adds.In fact, in the digital world, waiting for the perfect data point or information map that will help CIOs to make the decision probably means that it is too late anyway.There are different grades of difficult decisions, and Iyengar advises CIOs to have a framework for decision-making.There are simple decisions which are quite easy to make.Complicated decisions are those where you don’t know everything, but you know what you don’t know.Complex decisions are those where you don’t know what you don’t know.The final category of decision is totally chaotic, with too many unknowables, where you don’t know what you have to find out, or what else is coming down the line.The chaotic and complex categories of decisions — the difficult decision – are where CIOs would need to look for patterns, areas where they might match things that have happened before.There are different methods of decision-making, and they should be used in different areas.Analytical decision-making, with data inputs, is relatively simple, Iyengar says.Heuristic decision-making relies on a small set of simple rules that may not be data driven, but based on experience. The probabilities and values are fairly bounded although outside the bounds of data.Intuitive decision-making in a non-conscious or subconscious process. This happens when people are able to quickly recognise patterns and reach conclusions.The point of analysis paralysis while you wait for the data are numbered in business and even in our personal environments.”But intuition is not a seat of the pants, knee-jerk reaction,” Iyengar says.Some guidelines include checking for a few concurrent conditions that include whether you are a domain expert, if there really is no or only very limited data available, and if the time constraints are severe and irremovable.The higher people rise in the organisation, the more likely they are to face difficult decisions. And the ability to make difficult decisions is one of the soft skills that CIOs should have in a Mode Two environment, according to Gartner.In fact, the higher up the stack you go, the more likely it is that you will have to make it yourself. But CIOs should beware of getting sucked into every decision that could be made by other team members.However, to succeed in making complex decisions, it is important to involve the team, and gain their input.”Start with smart people,” Iyengar says. “These are people who would rather risk looking stupid than being stupid.”They could then focus on five types of questions:

* Clarifying — why do you say so?

* Funneling — how did you do this analysis?

* Comparing — has anyone taken this approach before?

* Adjoining — how would this apply to another context?

* Elevating — what are the broader issues? What are we missing?

“Asking these questions does improve the quality of the decision,” Iyengar says.Moving from advocacy to inquiry can come from a number of areas.Constructive conflict is where the team is broken down into sub-groups, which forces people with different interests to work together. You could enable it by assigning team members to play different, functional roles But it’s important to prohibit language that triggers defensiveness.”Raise your thoughts, not your fists,” Iyengar says.The next step is consideration, where the person who has to make the decision demonstrates an openness to accept different views by listening attentively and then spelling out the contribution of each individual.The final step is closure, actually making the best possible decision.Judgement disasters are a reality when knee-jerk reactions lead to the wrong decision.The biases that feed into this include over-confidence or an overestimation of the team’s skill level. Anchoring is another bias where the first or most recent data is given more weight.Confirmation bias comes in when the decision-maker seeks, or appears to seek, confirmation rather than contradiction.The sunk costs fallacy is a very real danger in IT, where there is unwillingness to kill a project that has cost so much already. The possibility of throwing good money after bad should be avoided, Iyengar says.Loss aversion is another danger, where the pain of a loss outweighs the benefits of a gain.CIOs should make sure they don’t make the wrong decision because of biases by requesting a second opinion, nominating a devil’s advocate, attain some distance, and prepare to be wrong.This is important, Iyengar says. “Set clear, measurable and time-bound success metrics for your decision and revisit it, if necessary. As a leader, have the courage to say you need to make a mid-term correction.”