MODULE 6 | ACC NCR Leadership Academy

MODULE 6

PROBLEM SOLVINGand

STRATEGIC DECISION-MAKING

LEARNING OBJECTIVES• Learn how decision-making approaches impact quality, speed, yield and effort.

• Understand one's own decision-making style(s) and impact on others (inside and outside of your legal department).

• Learn how to better get ahead of issues by setting and managing expectations with the business.

• Learn and be able to apply the RAPID process to enhance effective strategic business decision-making.

Phase 1 Learning Objectives

Carter Racing1.To Race or Not To Race?2.Decision Analysis3.Challenges in Decision-Making

Carter Racing

One Question (In Your Teams):

To Race or Not to Race?

Why Did We Miss It?

6

The Carters: The Dynamic LandscapeCarter Racing

Chris Carter

Pat Edwards

Robin Burns

Sponsors

Fans

Families?

The Competition

BJ Carter

NASA: How did things go wrong?“Operational Excellence”

Cost CuttingMeet Flight Schedules

SystemsDecision Making Systems Did Not Encourage Dissent around Safety

Hierarchical Structure

PeopleTechnically Mindset

Launch FocusedRisk-Taking

Culture“Can Do”

Avoidance of Negative InformationValued Cutting Costs

“Pressure to Launch”

8

Carter Racing: The Moral• We live in a complex world

– The simple gets more complex, quickly• Technical expertise is important

– Manifestations of technical expertise in the “Real World” are determined by organization/human factors.

• We rely on our imperfect selves to identify and process data

• We rely on our groups to help us make sense of the world

We Are Only Boundedly Rational And Need to Carefully Evaluate How We

Process Information

Effective Strategic Decision-Making

2. Embrace how we “really” make decisions

1. Understand what the “ideal” is

3. Acknowledge dangers and pitfalls

4. Know how/Commit to doing it “right”

Rational ThinkingDefine (Re-Define) The Problem

Identify Potential Causes

Analyze and Interpret Information

Identify NeededInformation

Identify and Evaluate Alternatives

Adopt Strategic Approachand Follow-Through Options

Act

Monitor Solution Found

Individuals are Boundedly Rational and Resource Constrained

Foster Deliberate Decision-Making Processes

How Decisions Are Really Made

Setting First Half-way Change Second Accelerated Group Phase Transition Point Phase ActivityDirection Inertia Inertia

How Individuals Make Decisions

• Bounded rationality

• Intuitive decision making

• Identifying visible problems

• Developing limited alternatives

• Making biased choices

How Is Decision-Making Compromised?

Individual Level1. Confirmation Bias2. Availability Bias 3. Anchoring Traps4. Overconfidence Bias

Collective Level1. Conformity Pressures2. Conflict Aversion

Examples of Confirmation Bias1. “A person who is going to write a research paper may primarily

search for information that would confirm his or her beliefs. The person may fail to search for or fully consider information that is inconsistent with his or her beliefs.”

2. “A reporter who is writing an article on an important issue may only interview experts that support her or his views on the issue.”

3. “An employer who believes that a job applicant is highly intelligent may pay attention to only information that is consistent with the belief that the job applicant is highly intelligent.”

4. Why do FoxNews and MSNBC continue to thrive?

http://www.psychologyandsociety.com/confirmationbias.html

Confirmation Bias

Solutions• Seek disconfirming evidence • Sample from total population of whatever you

want to learn about – Gasket failures– When gaskets did not fail

• Scenario construction- worst case– What would happen if we blew up?

Issues• We are attracted to evidence that confirms our

ideas• Motivated by Psychological Protection

How Is Decision-Making Compromised?Individual Level1. Confirmation Bias2. Availability Bias 3. Anchoring Traps4. Overconfidence Bias5. Representativeness Bias


Availability BiasIssues• “Squeaky Wheel Gets The Grease”• We tend to use information that is available to us

– Perceived as more relevant– Less Cognitive Effort

Solutions• Be dubious of easy to get information• Use outside experts (with experience) who can vet

your information and your sources

How Is Decision-Making Compromised?Individual Level1. Confirmation Bias2. Availability Bias 3. Anchoring Traps4. Overconfidence Bias


Anchoring TrapIssues• “Who Shoots First?”• Final Solutions Generally Revolve Closely

Around Initial Proposals

Solutions• Try Alternative Starting Points• Gather Wide-Ranging Evidence• Establish Your Own Anchor

How Is Decision-Making Compromised?

Individual Level1. Confirmation Bias2. Availability Bias 3. Anchoring Traps4. Overconfidence Bias


Examples of Overconfidence“Failure to see reality”

1.From the “Shark Tank”: An entrepreneur who keeps investing their retirement savings into a failing business because: “They know they can make it work”

2.A presidential candidate who stays in the race longer than they should despite failing poll numbers based on a belief that they can “turn it around.”

3.Staying in a bad relationship longer than you should based on a belief that you know how to and can change your partner.

What to do about it?

Being Forewarned is Being ArmedActively Try to De-Bias Your Decision Suggestions

– Change your decision goals– Be conscious of environmental influences– Change your decision frames– Change your decision anchors– Actively disconfirm– Seek other’s opinions/inputs

Video: Thirteen Days

• Be an advisor to President Kennedy• Observe the meeting dynamics• Advise

– Where are biases (potentially) present– Why?

Group Decisions: The Challenge

ConflictToo much

dissent over goals,tasks and processes

ConformityToo much agreementover goals, tasks and processes

The Goal: Healthy, ongoing

conversations about goals, tasks and

processes

Group Challenge: Conflict

Task Conflict – Conflict over content and goals of workProcess Conflict – Conflict over how work gets doneRelational Conflict – Do I like you personally?

From Robbins, 2005

Group Challenge– Social Loafing

Group Size

PerformanceExp

ected

Actual (due to

loafing)

Other conclusions:• Odd number groups do

better than even.• Groups of 7 or 9 perform

better overall than larger or smaller groups.

Group Decisions: The Challenge

ConflictToo much

dissent over goals,tasks and processes

ConformityToo much agreementover goals, tasks and processes

The Goal: Healthy, ongoing

conversations about goals, tasks and

processes

Asch Study

Group Challenge: Conformity

Group dynamics often press us toward conformity

Members desire to be accepted and avoid being seen as different

This impacts our decisions and actions

Making Better Decisions

1. Actively encourage dissent • Avoid norm of favoring only good news• Coach/Model how to dissent with respect

2. Structure “open” discussions• Active brainstorming• Devil’s advocate; Nominal group technique• Grace periods for re-evaluation

3. Invite outsiders• Embrace fresh ideas• Show that you welcome challenges

Two-Part Solution

Phase 2– Discuss RAPID Decision-Making Process– Way of Allocating Decision-Making

ResponsibilityPhase 3– How to Enhance Our Decision-Making– Way to Make Sure Everyone Participates

Fully in The Decision-Making Process


Understand RAPID1.What it is2.Why, When, and Where we would use it3.How to deploy it effectively

Use RAPID in Decision Making

Discipline our strategic decision-making

RAPID OverviewRAPID is intuitive and simple mechanism oforganizing strategic decision-making

1.Use RAPID (Recommend-Agree-Perform-Input-Decide) to clearly define decision accountability roles

2.RAPID focuses attention on WHO should be involved & WHAT role they will play in decision making

3.Shared understanding of critical roles within strategic decision-making

Group Challenge: Clarify Roles

• Role• A set of expected behavior patterns attributed to someone occupying a

given position in a social unit

• Role Perception• An individual’s view of how he or she is supposed to act in a given

situation – received by external stimuli

• Role Expectations• How others believe a person should act in a given situation• Psychological Contract: an unwritten agreement that sets out mutual

expectations of management and employees

• Role Conflict• A situation in which an individual is confronted by divergent role

expectations

Recommend

Decide Agree

Perform

Input

• There is only one D• D makes the final decision and commits the

organization to action• Locate the D at the level of the organization where

you would expect the decision to be made…(note: there is a single line of “command and control” for any decision – people can have two bosses, decisions cannot)

• If D belongs to a group, clarify how it gets exercised (e.g. majority vote?)

Decide

• There is only one (singular) or two (competing) Rs; does 80% of work developing the recommendations

• R has broad visibility and access to information for relevant inputs and leads the process to develop a recommendation, factoring in all relevant input

• R has credibility with both I’s and D• D chooses R• R+D (with advice from As and Ps) choose Is

Recommend

• Usually, there are multiple I’s• I’s are chosen because they hold knowledge,

experience or access to resources that are key to decisions.

• I’s can sometimes be individuals who … are key recipients of decisions so their counsel is sought.

• Often try and restrict the number of I’s to those who have key information or really need to be involved.

• Remember, I’s provide requested information (i.e., from R’s and D’s)

Input

• A’s should be assigned sparingly• A is usually only for extraordinary circumstances

relating to regulatory or legal issues• Having an A implies VETO power (on the

recommendation only, not the decision – also cannot disagree afterwards)

• Where A exists, they must be consulted, should not be ignored

• If A and R cannot agree on the recommendation, then D breaks the deadlock

Agree

• There may be multiple P’s• P’s are accountable for performing or executing the

decision, once it has been made• P’s are often also considered as I’s, in order to

engage early, identify change resistance or potential implementation issues or to enable advance planning

Perform

Four Phases of RAPID Decision-MakingPhase 1 – WHAT?• Identify Key Decisions• Key Decisions• Sub-Decisions• Frame Decisions• Importance• Context

WHO?• Clarify up front whowill play what role ineach decision. Eg.Decision maker,recommender….“

Phase 2 - WHO?• Clarify up front who

will play what role in each decision.

R, A, P, I, D• Distribute Responsibilities

Phase 4 - WHEN?• Establish decision &

execution milestones.• Create a decision calendar

for reporting out and integrating interdependent decisions.

Phase 3 - HOW?• Meetings• Deliverables• Participation• Communication Media• Feedback/Check-ins• Process Evaluations

Use the RAPID Matrix

Decision

ACTOR1

ACTOR2

ACTOR3

ACTOR4

ACTOR5

ACTOR6

ACTOR7

ACTOR8

ACTOR9

MarketingPlan D P R R P I A I PProgram Implementation P I P D R R I I P

Once Roles are Assigned – Information Gathering and Analysis Responsibilities

Must Be Clarified!!

Using RAPID for Carter Racing

Decision

BJ

CARTER

CHRIS

CARTER

ROBIN

BURNS

PAT

EDWARDS

DRIVER

GOODSTONE

REP

GASKET

REP

To Race of Not D R A I P I IWe would ask specific questions of each

participant to gain key insights


Enhancing Group Decision-Making 1.What it is2.The Importance of Status3.How to build Trust

How to Engage Group Members Fully in Decision-making

“Crashed in the Mountains”

Cascades Survival Activity

46FIRST DECISION: Should you stay in place or go for help?FIRST RULE: You have to achieve a consensus on this decision

1 2 3 4 5

Ave. Individual Score

Team Score

Gain (Loss) Score

Percent Change

Best Individual Score

# of Members BetterThan Team

Cascades Survival – Team Metrics

Decision-Making NormsNorms = Accepted standards of behavior within

a group that are shared by the group’s members

Classes of Norms! Performance Norms – What are we trying to achieve?! Decision Norms – What is our process/sub-processes?! Relational Norms – How we empower each other?! Allocation Norms – Responsibilities, resources, and

rewards! Communication Norms – How/When we communicate?

Recommend

Decide Agree

Perform

Input

Consider Applying Rapid in Your Process

Self Reflection QuestionsWhat did you notice about yourself in that simulation?

- Your goals in decision-making?- Your orientation toward conflict?- Your focus on listening vs. speaking?- Were you empowered: Why of why not?

Collective Reflection QuestionsWas your team successful: Why or why not?

- Overall Decision-Making Approach?- Was everyone listened to?- How was conflict handled?- How was consensus built (if at all)?- Did you enjoy this team dynamic?

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Group Decisions: The Goal

!Group Strengths:"More complete information/idea generation"More creative decision "More accurate decisions"More power behind decisions"More of the load is shared"More fun!

Effect of process on group performance

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Solution: Promoting Individual StatusStatus: A sense of value to one’s group

Characteristics of Perceived Status1. Perceived power over others2. Perceived capacity to influence group goals3. Possesses valued personal characteristics

When People Perceive They Have Status1. Focus on Fostering Group Performance2. Generously Contribute Their Views and Talents3. Think Critically and Creatively about Group Decisions

Recommend

Decide Agree

Perform

Input

Clarify Roles

Key Objective: Build TrustTrust = Ability + Benevolence + Integrity

Ability•Members apply their abilities to foster positive group performance.•Members develop their capacity to foster good intra-group relationships.

Benevolence•Members take care of each others’ instrumental and relational interests.•Members try to help each other in doing their work

Integrity•Group members keep promises to each other.•Group members keep confidences.•Implicit and explicit promises•Group members make sure that rewards are fairly distributed.

Focus on Mutual Support

Psychological Contracts“Reflects an individual’s understanding of the

commitments made with another.”“Mental model” of the employment relationship

Key Assessments•Interpersonal treatment•Quality of feedback•Delegation outcomes•Promotion opportunities

Key Features•Assumed mutuality•Incompleteness – “The Unforeseen”•Developed through multiple sources

Targets largely determine psychological contract

parameters!!

Trust in Group Decision-Making!

A socially defined position or rank given to groups or group members by others

Promoting Perceived Status: 1. The Importance of Transparency:!Trust – Takes Interests of the group into account!Standing – Individual respect and dignity!Neutrality – Fair and impartial

2. The Importance of “Voice”!Encourage critical analyses (process and content)!Encourage active participation

Equity

My OutcomesMy Inputs

Your OutcomesYour Inputs= I’m happy

You’re happy

My OutcomesMy Inputs

Your OutcomesYour Inputs

I’m unhappyYou feel happy/guilty

Idea: People are motivated to achieve and maintain equity in relation to comparison others by:

- reducing inputs or increasing outcomes

- reframing the situation

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Chris P. LongPaul Naughton Associate Professor of Management – St. John’s University

Adjunct Professor of Management – Georgetown UniversityFounder, Principal, Organizational Impact, LLC

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MODULE 6 | ACC NCR Leadership Academy

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