Making A Better Decision

The November 13, 2012 edition of the Financial Times had an important article for all engineers.  The article by Philip Delves Broughton, Decidedly Better Choices, covers the topic of understanding how to make decisions more effectively leads to better outcomes.  Key points in the article:

• It is not just the substance of the decisions that matters but also the process and style in which decisions are reached.  You could make the right decision through luck and never know how to repeat your success.
• The idea of "choice architecture" is important - - the context of which we choose.  Good choice architecture can help overcome our tendency to make poor decisions because we procrastinate, avoid complexity, or simply turn away.
• Our aversion to losses makes us too cautious.
• Our tendency to anchor choices on certain assumptions makes us give too much weight to information that might be irrelevant.
• Since human judgment is so badly flawed, senior managers must find ways to limit its worst consequences.
• Good decision-making is not a permanent trait, but the result of a fluctuating state of mind.  You can get decision fatigue.
• Options-based decision making - - ways to develop new strategies in business environments where information is constantly changing, and the context is resistant to change.  By keeping many options open and reviewing them regularly, organizations become more flexible than if they are always waiting for one monumental decision and its consequences to unfold.

The article listed the keys to improving your decision-making:

• The ability to make good decisions fluctuates throughout the day.  Don't exhaust yourself with small choices.  Save your decision-making energy for what matters.
• Good process leads to good decisions.  Consciously work to challenge the bases of decisions and the biases and prejudices of decision makers.
• Make decision-making a constant and flexible process.  Keep a running list of several options for important decisions, discussing them with fellow managers and updating them with new discoveries.  This lessens the drama of big decisions and allows for more course corrections en route.
• Seek ways to distance yourself from the emtion of decision-making.  Going over the decision in a second language might sound a strange approach, but it has been shown to lead to more rational decisions.