Decision tools

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This is the third post in a series of post I am writing after reading Blink: The Power of Thinking Without Thinking by Malcolm Gladwell (for former post see 1, 2).

One of the sentences that struck me as the most important in Blink comes from the afterword. This is it:

The key to good decision-making is not knowledge. It is understanding. We are swimming in the former. We are desperately lacking the latter.

This sentence is built upon a number of stories in the book (and connects to other writings by Gladwell about the perils of too much information). One of the leading stories it refers to is the story of how Cook County Hospital improved the decision-making of its doctors by telling them to focus only on three pieces of information in the entire sea of details they had about patient in order to make a decision whether he was a risk for heart attack. Even though all doctors felt that this was the wrong way to go, as they were ignoring precious information, it turned out that by focusing only on three issues, doctors made much better decisions that not only saved money, but more importantly, saved lives.

I have written before about the dangers of using the information and measurements we have just because we have them. As we continue to develop in terms of technology, we will have more and more data and information. As Gladwell says in Blink:

We take it, as a given, that the more information decision makers have, the better off they are. If the specialist we are seeing says she needs to do more tests or examine us in more detail, few of us think that’s a bad idea… extra information isn’t actually an advantage at all; that, in fact, you need to know very little to find the underlying signature of a complex phenomenon.

In my mind this connects perfectly with the idea of Vital Signs. This is what I wrote almost a year and a half ago:

I believe the challenge of managers in the next few years, especially in the more subtle fields that are hard to measure will be to create the right vital signs.

I am I the process of reading Switch: How to Change Things When Change Is Hard by the Heath brothers and one of the main concepts of the book is about scripting change. They describe the importance of making people aware of the basic decision principles to guide their specific behavior. They give example of major changes accomplished by ordinary people who harnessed the power of simplifying the decision-making. How? By creating scripted concepts that help decide what is important and what is not.

Reading Blink and Switch just strengthened my understanding of this concept. People are cognitive misers. They are not able and do not want to deal with large amounts of information. As Blink (and Switch) show, when they are faced with so much information it actually affects their judgment, usually in a negative way. The most successful people are not going to be those who can master and absorb large amounts of information. It will be those who will know how to distill this information into a few major signs that help guide decision-making. Thus, our rule as managers is to find the vital signs and make them crystal clear. We need to make sure that we are tackling the right issue. Not lack of information. Lack of decision tools.

Elad

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