Basic Guidelines To Problem Solving And Decision Making

Guidelines to Problem Solving and Decision Making

Much of what managers and supervisors do is solve problems and make decisions. New managers and supervisors, in particular, often make solve problems and decisions by reacting to them. They are "under the gun", stressed and very short for time. Consequently, when they encounter a new problem or decision they must make, they react with a decision that seemed to work before. It's easy with this approach to get stuck in a circle of solving the same problem over and over again. Therefore, as a new manager or supervisor, get used to an organized approach to problem solving and decision making. Not all problems can be solved and decisions made by the following, rather rational approach. However, the following basic guidelines will get you started. Don't be intimidated by the length of the list of guidelines. After you've practiced them a few times, they'll become second nature to you -- enough that you can deepen and enrich them to suit your own needs and nature.

(Note that it might be more your nature to view a "problem" as an "opportunity". Therefore, you might substitute "problem" for "opportunity" in the following guidelines.)

1. Define the problem

This is often where people struggle. They react to what they think the problem is. Instead, seek to understand more about why you think there's a problem.

Defining the problem: (with input from yourself and others)

Ask yourself and others, the following questions:

 What can you see that causes you to think there's a problem?  Where is it happening?  How is it happening?  When is it happening?  With whom is it happening? (HINT: Don't jump to "Who is causing the problem?" When we're stressed, blaming is often one of our first reactions. To be an effective manager, you need to address issues more than people.)  Why is it happening?  Write down a five-sentence description of the problem in terms of "The following should be happening, but isn't ..." or "The following is happening and should be: ..." As much as possible, be specific in your description, including what is happening, where, how, with whom and why. (It may be helpful at this point to use a variety of research methods. .

1 Defining complex problems:

If the problem still seems overwhelming, break it down by repeating steps a-f until you have descriptions of several related problems.

Verifying your understanding of the problems:

It helps a great deal to verify your problem analysis for conferring with a peer or someone else.

Prioritize the problems:

a. If you discover that you are looking at several related problems, then prioritize which ones you should address first. b. Note the difference between "important" and "urgent" problems. Often, what we consider to be important problems to consider are really just urgent problems. Important problems deserve more attention. For example, if you're continually answering "urgent" phone calls, then you've probably got a more "important" problem and that's to design a system that screens and prioritizes your phone calls.

Understand your role in the problem:

Your role in the problem can greatly influence how you perceive the role of others. For example, if you're very stressed out, it'll probably look like others are, too, or, you may resort too quickly to blaming and reprimanding others. Or, you are feel very guilty about your role in the problem, you may ignore the accountabilities of others.

2. Look at potential causes for the problem

a. It's amazing how much you don't know about what you don't know. Therefore, in this phase, it's critical to get input from other people who notice the problem and who are affected by it. b. It's often useful to collect input from other individuals one at a time (at least at first). Otherwise, people tend to be inhibited about offering their impressions of the real causes of problems. c. Write down what your opinions and what you've heard from others. d. Regarding what you think might be performance problems associated with an employee, it's often useful to seek advice from a peer or your supervisor in order to verify your impression of the problem. e. Write down a description of the cause of the problem and in terms of what is happening, where, when, how, with whom and why.

2 3. Identify alternatives for approaches to resolve the problem

At this point, it's useful to keep others involved (unless you're facing a personal and/or employee performance problem). Brainstorm for solutions to the problem. Very simply put, brainstorming is collecting as many ideas as possible, then screening them to find the best idea. It's critical when collecting the ideas to not pass any judgment on the ideas -- just write them down as you hear them. (A wonderful set of skills used to identify the underlying cause of issues is Systems Thinking.)

4. Select an approach to resolve the problem

When selecting the best approach, consider:  Which approach is the most likely to solve the problem for the long term?  Which approach is the most realistic to accomplish for now? Do you have the resources? Are they affordable? Do you have enough time to implement the approach?  What is the extent of risk associated with each alternative? (The nature of this step, in particular, in the problem solving process is why problem solving and decision making are highly integrated.)

5. Plan the implementation of the best alternative (this is your action plan)

 Carefully consider "What will the situation look like when the problem is solved?"  What steps should be taken to implement the best alternative to solving the problem? What systems or processes should be changed in your organization, for example, a new policy or procedure? Don't resort to solutions where someone is "just going to try harder".  How will you know if the steps are being followed or not? (these are your indicators of the success of your plan)  What resources will you need in terms of people, money and facilities?  How much time will you need to implement the solution? Write a schedule that includes the start and stop times, and when you expect to see certain indicators of success.  Who will primarily be responsible for ensuring implementation of the plan?  Write down the answers to the above questions and consider this as your action plan.  Communicate the plan to those who will involved in implementing it and, at least, to your immediate supervisor. (An important aspect of this step in the problem- solving process is continually observation and feedback.)

3 6. Monitor implementation of the plan

Monitor the indicators of success: a. Are you seeing what you would expect from the indicators? b. Will the plan be done according to schedule? c. If the plan is not being followed as expected, then consider: Was the plan realistic? Are there sufficient resources to accomplish the plan on schedule? Should more priority be placed on various aspects of the plan? Should the plan be changed?

7. Verify if the problem has been resolved or not

One of the best ways to verify if a problem has been solved or not is to resume normal operations in the organization. Still, you should consider: a. What changes should be made to avoid this type of problem in the future? Consider changes to policies and procedures, training, etc. b. Lastly, consider "What did you learn from this problem solving?" Consider new knowledge, understanding and/or skills. c. Consider writing a brief memo that highlights the success of the problem solving effort, and what you learned as a result. Share it with your supervisor, peers and subordinates.

Decision Making Tips

4 Just as people are different, so are their styles of decision making. Each person is a result of all of the decisions made in their life to date. Recognizing this, here are some tips to enhance your decision making batting average.

 Do not make decisions that are not yours to make.  When making a decision you are simply choosing from among alternatives. You are not making a choice between right and wrong.  Avoid snap decisions. Move fast on the reversible ones and slowly on the non- reversible.  Choosing the right alternative at the wrong time is not any better than the wrong alternative at the right time, so make the decision while you still have time.  Do your decision making on paper. Make notes and keep your ideas visible so you can consider all the relevant information in making this decision. Be sure to choose based on what is right, not who is right.  Write down the pros and cons of a line of action. It clarifies your thinking and makes for a better decision.  Make decisions as you go along. Do not let them accumulate. A backlog of many little decisions could be harder to deal with than one big and complex decision.  Consider those affected by your decision. Whenever feasible, get them involved to increase their commitment.  Recognize that you cannot know with 100% certainty that your decision is correct because the actions to implement it are to take place in the future. So make it and don't worry about it.  Use the OAR, O. A. R. approach in decision making. Look at O, Objectives you are seeking to attain, A, the Alternatives you sense are available to you and R, the risk of the alternative you are considering.  It has been said that a decision should always be made at the lowest possible level and as close to the scene of action as possible. However, a decision should always be made at a level insuring that all activities and objectives affected are fully considered. The first rule tells us how far down a decision should be made. The second how far down it can be made.  Remember that not making a decision is a decision not to take action.  To be effective a manager must have the luxury of having the right to be wrong.  Trust yourself to make a decision and then to be able to field the consequences appropriately.  Don't waste your time making decisions that do not have to be made.  Determine alternative courses of action before gathering data.  Before implementing what appears to be the best choice, assess the risk by asking "What can I think of that might go wrong with this alternative?"  Many decisions you make are unimportant-about 80% of them. Establish operating limits and let your secretary or others make them for you.

 Consider making the decision yourself in lieu of a group, but recognize the potential for less commitment by those affected.

5  As part of your decision making process, always consider how the decision is to be implemented.  As soon as you are aware that a decision will have to be made on a specific situation, review the facts at hand then set it aside. Let this incubate in your subconscious mind until it is time to finally make the decision.  Once the decision has been made, don't look back. Be aware of how it is currently affecting you and focus on your next move. Never regret a decision. It was the right thing to do at the time. Now focus on what is right at this time.  Mentally rehearse implementation of your choice and reflect in your imagination what outcomes will result.  Brainstorming alternative solutions with your staff or others will gain fresh ideas and commitment.  Discontinue prolonged deliberation about your decision. Make it and carry it through.  Once you have made the decision and have started what you are going to do, put the "what if's" aside and do it with commitment.

How We Sometimes Fool Ourselves When Making Decisions

Think back on a decision you made in the past that cost you dearly or caused you considerable pain. Then consider some smaller decision where, in retrospect, you realize a different choice would have saved you time and avoided aggravation. Looking back on the momentous times in our lives, some of our biggest regrets come from faulty decision- making.

What if you found out your mind played tricks on you? That you could have thought things out better and made a wiser choice? Perhaps you were relying on your "gut instincts" but were fooled by the unconscious decision-making traps we fall into when trying to figure out what we should do. According to one of my all-time heroes, negotiations guru Howard Raiffa, we are destined to repeat the same faulty decision- making process and face more grief from the poor results if we don't gain insights into some of these traps.

According to Raiffa, the fault often lies, not in the decision-making process but in the mind of the decision-maker. The way the human brain works can sabotage our decisions. Here are some insights into the most well documented traps we set for ourselves in making decisions.

The Routines of Decision-Making

We use unconscious routines, called heuristics, to cope with the complexity inherent in decision-making. These routines serve us well in most situations. For example, in judging distances, we equate clarity with proximity. The clearer an object appears, the closer we judge it to be. The fuzzier, the farther away we think it is. Like most

6 heuristics, this one is not foolproof. If the day is hazier than usual, our eyes tend to trick our minds into thinking things are more distant than they actually are. For airplane pilots, such a distortion could be catastrophic if they weren't trained to use other truly objective measures and instruments. This decision-making flaw is based on sensory perception, but others are based on biases or on irrational anomalies in our thinking. These anomalies are potentially dangerous because they are invisible to us. They are hardwired into our thinking, so we fail to even recognize we are using them.

Anchoring

How would you answer these two questions?

1. Is the population of Turkey greater than 35 million? 2. What's your best estimate of Turkey's population?

If you are like most people, the figure of 35 million in the first question (which researchers chose arbitrarily) influenced your answer to the second question. I've watched the behavioral scientists ask variations of these questions to groups of people many times over the past decade. In half the cases, 35 million was used in the first question; in the other half, 100 million. Without fail, the answers to the second question increase by millions when the larger figure is used as an "anchor" in the first question.

When considering a decision, the mind gives disproportionate weight to the first information it receives. Initial impressions, estimates, or other data anchor subsequent thoughts and judgments. The implications for influencing another's perceptions are mind-boggling and can take many guises. A colleague's comment or a statistic in the morning paper can influence your later decision-making on the same topic. Other guises are as insidious as a stereotype about a person's skin color, clothing, or accent. In business, one of the most frequent "anchors" is a past event or trend. In attempting to project sales of a product for the coming year, a marketer often begins by looking at the sales volumes for past years. This approach tends to put too much weight on past history and not enough weight on other factors.

Because such anchors can establish the terms on which a decision is made, they can be used as a bargaining tactic by savvy negotiators.

Reduce the impact of the effects of anchoring in these ways:

1. Be open minded. Seek information and opinions from a variety of people to widen your frame of reference, without dwelling disproportionately on what you heard first.

2. Offer objective information. In seeking advice from someone else, offer just the facts, without your opinion, so you don't inadvertently anchor the person with your thoughts. Then you can benefit from hearing diverse views on the situation without those views being colored or anchored by yours.

7 3. Remember this. Whoever most vividly characterizes the situation usually anchors the other's perception of it. That's an immensely powerful ability. Others literally see and discuss the situation while anchored from that most memorably stated perspective. The vivid communicator has literally created the playing field on which the game will be played. Be especially wary of anchors in negotiations. Think through your position before any negotiation begins, so you can avoid being anchored by someone else's proposal or position.

The Status Quo Trap

We instinctively stay with what seems familiar. Thus we look for decisions that involve the least change. For example, when a radically new product is introduced, it is made to look like an existing and familiar product. The first cars looked like horseless carriages. The first online newspapers and magazines had formats much like their print counterparts.

To protect our egos from damage, we avoid changing the status quo, even in the face of early predictions that change will be safer. We look for reasons to do nothing. For example, in one experiment, a group of people were randomly given one of two gifts of approximately the same value -- half received a mug, the other half a large Swiss- chocolate bar. They were told they could easily exchange the gift they received for the other gift. Although you might expect about half to want the exchange, only one in ten actually did. The power of status quo kicked in within minutes of receiving an object. Other experiments have shown that the more choices someone is given, the more pull the status quo has. Why? Because more choices involve more effort, and selecting the status quo avoids that effort.

In business, sins of commission (doing something) tend to be punished much more severely than sins of omission (doing nothing). In all parts of life, people want to avoid rocking the boat.

What can you do? Think first of your goals when preparing to make a decision. Then review how these goals are served by the status quo as compared to a change. Look at each possible change, one at a time, so as not to overwhelm yourself and instinctively want to stay "safe" and unchanged.

Never think of the status quo as your only alternative. Ask yourself whether you would choose the status quo if, in fact, it weren't the status quo.

Avoid the natural tendency to exaggerate the effort or cost or emotional reaction of yourself or others if you change from the status quo.

Remember that the desirability of the status quo might change over time. When considering a change, look at possible future situations. If several alternatives are superior to the status quo, avoid the natural tendency to fall back on the status quo because you are having a hard time choosing among the other alternatives.

8 The Justify- Past-Actions Trap

The more actions you have already taken on behalf of a choice or direction, the more difficult you will find it to change direction or make a different choice. Whenever you invest time, money, or other resources, or whenever your personal reputation is at stake, you will find it more difficult to change your decision or course of action. Suppose you pour a great deal of time and effort into offering a product to a new niche market. Because you have already used resources to be successful in that market, you will find it difficult to withdraw, even when the market clearly is not interested in your product. If you have a once-close childhood friend who has not been supportive of you for years, you'll be reluctant to acknowledge that change and will likely act as if you are still close. Banks used to continue to lend to businesses that had fallen back on payments, thus throwing good money after bad.

For all decisions with a history, make a conscious effort to set aside your "past actions" -- investments of emotion, money or other resources -- as you consider whether to change direction. Seek out and listen to people who were uninvolved with the earlier decisions. Examine why admitting an earlier mistake distresses you. If the problem lies in your wounded ego, deal with it straight-away. As Warren Buffet once said, "When you find yourself in a hole, the best thing you can do is stop digging."

Don't cultivate a failure-fearing culture in the people around you at home or at work. In such an atmosphere, others will perpetuate mistakes rather than admitting them to you and changing course. When you set an example of admitting mistakes in your choices and self-correcting, others will believe they can do likewise without penalties from you.

The Confirming-Evidence Trap

This trap is the bias that leads us to seek out information to support our existing point of view while avoiding information that contradicts it. This bias not only affects where we go to collect evidence to reinforce a current stance or perspective, but also how we interpret the evidence we receive, leading us to give too much weight to supporting information and opinions and too little to those that are conflicting.

In one study of this phenomenon, two groups -- one opposed to and one supporting capital punishment -- each read two reports of carefully conducted research on the effectiveness of the death penalty as a deterrent to crime. One report concluded that it was effective, the other that it was not. Despite being exposed to solid scientific information supporting counter-arguments, the members of both groups became even more convinced of the validity of their own positions after reading both reports.

Two fundamental and extraordinarily powerful psychological forces are at work here. Please read the next two sentences twice, as they describe two of the most subtle and pervasive ways we let our rush of first emotions bias our better, more balanced judgment.

The first is our tendency to subconsciously decide what we want to do before we figure out why we want to do it. 9 The second is our inclination to be more engaged by things we like than by things we dislike -- a tendency well documented, even in babies.

What can you do about these traps? Always check to see whether you are examining all the evidence with equal rigor. Avoid the tendency to accept confirming evidence without question. Get someone you respect to play devil's advocate, or build the counter- arguments yourself. What's the strongest reason to make a different choice? The second strongest? The third?

Be honest with yourself about your motives. Are you really gathering information to help you make a smart choice, or are you just looking for evidence confirming what you think you want to do? In seeking advice from others, don't ask leading questions that make your decision-making inclination evident. Make sure the people from whom you want perspective are not biased by your views and can offer you truly independent information and opinions.

The Framing Trap

How you make a decision is often determined by how you view your choices or how you frame the questions around it. For example, to reduce insurance costs, the neighboring states of New Jersey and Pennsylvania made similar changes in their laws. Each state gave drivers a new option: By accepting a limited right to sue, drivers could lower their premiums. But the two states framed the choices very differently, and how the state officials framed the vehicle owners' choices for insurance costs made a $200 million difference in how the drivers in one state chose to pay versus those in the other state.

In New Jersey, you automatically got the limited right to sue unless you specified otherwise. In Pennsylvania, you got the full right to sue unless you specified otherwise. As a result, about 80% of drivers in New Jersey chose the limited right to sue, but only 25% in Pennsylvania. A frame can establish the "status quo" or introduce an "anchor." It can lead you to "justify past actions" or highlight confirming evidence. Two kinds of frames can distort decision-making with startling frequency.

Frame As a Gain or As a Loss

People are risk averse and will look for reasons to turn down or avoid a decision where a loss, however small, is possible -- even if a larger chance exists for an upside gain. People also tend to adopt the framing of the situation as it is presented to them, rather than restating the problem in their own way. Don't automatically accept the initial frame, whether you or someone else created it. Try to reframe the problem or opportunity in several ways to see it from different sides and envision different potential outcomes. Also try posing decision-making situations in a neutral way that combines gains and losses or embraces different reference points. Throughout the decision-making process, ask yourself how your thinking might change if the framing changed.

Estimating and Forecasting Traps

10 We are all fairly good at estimating time, volume, distance, and weight, because we make such decisions frequently and get quick feedback about our accuracy. We are less experienced (and get less verification) when deciding on less certain forecasts. Weather forecasters and bookmakers have opportunities and incentives to maintain a record of their judgments to see when they have been accurate and to plan to replicate the accurate reasoning in their next decision. We make mistakes in estimating and forecasting in one of the following three ways:

1. The Overconfidence Trap

We believe we are better at making forecasts or estimates than we actually are. In one series of tests, people were asked to forecast the next week's closing value for the Dow Jones Industrial Average. To account for uncertainty, they were then asked to estimate a range within which the closing value would likely fall. In picking the top number of the range, they were asked to choose a high estimate they thought had only a 1% chance of being exceeded by the closing value. Similarly, for the bottom end, they were told to pick a low estimate for which they thought there would be only a 1% chance that the closing value would fall lower. If they were good at judging their forecasting accuracy, you'd expect the participants to be wrong only about 2% of the time, but hundreds of tests have shown that the actual Dow Jones averages fell outside the forecast ranges 20% to 30% of the time. Overly confident about their ability to predict, most people set too narrow a range of possibilities.

2. The Prudence Trap

People are often overly cautious or prudent in forecasting. When faced with high-stakes decisions, we tend to adjust our estimates or forecasts "just to be on the safe side." An extreme example is the "worst-case scenario analysis" once popular in the design of weapons systems and still used in certain engineering and regulatory settings. Using this approach, engineers designed weapons to operate under the worst possible combination of circumstances, even though the odds of those circumstances actually coming to pass were infinitesimal.

3. The Recallability Trap

Even if we are neither too confident nor unduly prudent, we can fall into a trap when making estimates or forecasts. Because we frequently base our predictions about the future on our memories of the past, we can be overly influenced by dramatic events -- those that leave a strong impression on us. We all, for example, exaggerate the probability of rare but catastrophic occurrences such as plane crashes because they get disproportionate attention in the media. A dramatic or traumatic event in your own life will distort your thinking forever. You will assign a higher probability that similar things might happen to you and to others in the future.

To minimize the distortion caused by variations in recallability, carefully examine all of your assumptions. Many of these traps work, not in isolation, but in concert with each

11 other, thus amplifying their power to distort. When we make a fast decision, thinking we are relying on gut instincts, we are often falling into a trap.

Before you spend too much time actually making a decision, take time to review how you are making it. Don't get emotionally attached to one outcome before you're sure your decision-making process serves you well.