An Easy and Pedagogical way to make Informed Decisions using Collective Intelligence
Have you sometimes had the feeling that you missed important aspects in your decision making which make you feel somewhat uneasy?
Did you perhaps forget to take certain facts into consideration or did you misjudge the relative importance of an influencing factor? Did you realize the unintended consequences of the decision taken?
You know there is a tacit cause and effect mechanism under the surface, but maybe you did not capture it, or even not understood it.
By: Göran Källmark,CEO, Informed Decisions AB | [email protected]
Imagine that you are about to make a decision where the desired outcomes are improving time to market by 10%, an increased profit margin of 15%, or a mandatory decreased environmental impact in the packaging of goods of 20%. Then ask yourself what things do I have control over to achieve these outcomes. If your business was a car it would be things like the steering wheel, the accelerator, the breaks and signals.
Would you then have the understanding how your driving will lead to the desired outcomes? It could for instance include an increased budget on R&D with the expectations of shorter time to market and to reach the mandatory environmental requirements. Then, what about the desired increase in profit margin? Is it affected by the increased R&D budget? Furthermore, there are other parts of the organization that need to participate to reach these targets, such as production, logistics, sales, marketing, finance, procurement and HR.
This is often the time when the feeling comes creeping up on you that you are uncertain if you have made an Informed Decision (knowing what you don’t know). Why is that?
Human cognitive limitations
There are limitations in how many factors one can keep in mind. According to recent brain research, there are just 5-7 factors that each individual is capable to consciously relate to. When another factor is introduced, we either neglect it, or, one of the previous factors is neglected. We are also cognitively disabled by our limited ability to understand text and numbers. It is a small part of the brain that was in evolutionary terms developed late called Broca’s area that represents our ability to process text and numbers. We are much better equipped to understand and work with visual elements and with motion. Comparing the size of the visual cortex and the motor cortex to Broca’s area gives you some sense of understanding of their relative contributions to our overall ability to make informed decisions
The famous Nobel Prize Winner Daniel Kahneman puts it elegantly in the following phrase: What you know is all there is. That means that we should become aware of the human cognitive limitations and find ways to support our mental capabilities and capacities. Our decision making capability is limited to our mental capacity.
The power of collaboration
The knowledge that exists in a team is an example. We all come with a set of experiences and capabilities that are different from each other. This allows for us to take advantage of the knowledge and capability of others. It further lets us have the positive experience of challenging the limited knowledge we ourselves possess and believe is true. Tapping into what we call collective intelligence is a way to get to a better state for informed decision making. This will not happen automatically and will require using good methodologies and tools.
Visualization – I can see it clearly now
Just like we have disciplines for engineering (think airplanes), architectures (buildings), software engineering (software), they all have developed methodologies and toolsets to improve their respective disciplines.
It is hard to imagine a 747 being built by a team of people without engineering methodologies and design tools. One of the key reasons why we are able to handle very complex engineering tasks is not only the engineering capabilities itself, but very much the mental support provided by visual modeling. Visual modeling provides us with the ability to better understand and collaborate around the task at hand. The old saying that a picture is worth more than a thousand words is very true
The time has now come to apply that same way of working to decision making. Making decisions today can be very hard due to the complexity we are facing. Complexity often leads to reduction and simplification to be able to manage the task, but can, in turn, lead to not so well informed decisions.
It is better to make mistakes and learn in a simulator than to make mistakes in the real world. Just think about how we practice flying airplanes in simulators before we actually take the airplane off the ground. Once we have started to use modeling as a part of the decision making process we can with the right methodologies and toolset also work with simulations and then in a safe environment test various decision scenarios for affect.
A formal process and documentation
A very valuable aspect of working with Decision Intelligence to enable Informed Decision making is the formal process gained. A structured approach lets you continuously improve your decision making capability. A part of the process is documentation so you later know how and why certain decisions were made or certain factors considered or not. That is a huge benefit when it comes to aspects such as organizational learning, transparency and follow-through on the decision.
Many times a decision will not only be judged by the decision itself but rather the effect produced by the decision. Therefore it is hugely beneficial that with decision intelligence you do not only get to an informed decision, but also have the roadmap of why and how certain actions should be taken to lead to the desired outcomes. Over time, this should move you toward making increasingly more optimal decisions faster.
Learning Decision Intelligence is an easy, way to get an efficient and pedagogical methodology for an increased decision making capability and ultimately for making more Informed Decisions.
This topic will be covered at our Data Governance Conference Europe 2015, 18-21 May by Hakan Edvinsson – Modelling Business Decisions – a Step Further for Data Modellers. Modelling Business Decisions: Improved Decision Capability through Decision Intelligence can be taught as a 3 day inhouse seminar for your organisation.
All articles are © 2015 by the authors.
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