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
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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”
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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
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
Collective Level1. Conformity Pressures2. Conflict Aversion
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
Collective Level1. Conformity Pressures2. Conflict Aversion
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
Collective Level1. Conformity Pressures2. Conflict Aversion
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 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
Phase 2 Learning Objectives
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
• 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
Phase 3 Learning Objectives
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?
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!
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
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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