I co-facilitated a day-long research workshop on decision making as part of the PMI Global Congress over the weekend, which was a great deal of fun. The audience was highly engaged, asked a lot of great questions, and stayed focussed through the day. Which, given it was a gorgeous Saturday in Disney’s Magic Kingdom, was pretty impressive.
One of the most interesting insights (for me) out of the day came surprisingly early, providing an overview of what we already know about decision making. Introducing the different perspectives of decision making, it became extremely clear extremely quickly that many of the audience had a very strong preference for one particular worldview.
If we dive back into decision making history (a pretty big ocean of research) we have to go back nearly 300 years, to the work of Bernoulli and a paper he published in 1738. This established the basis of what is known as “expected utility theory,” or rational decision making. The essential assumption of rational decision making is that decision makers optimize choices in order to maximize benefits. The basic tenet of what is known as (the non-gender-specific) economic man is that we want the best choice under all circumstances.
The problem with rational decision making is that it requires a great deal of work to make ANY decision. It implies that you have to look at all the options, do so simultaneously, collect as much data as possible to evaluate each of the options and comprehensively analyze the results to determine which option is truly best. The problem, as noted by a number of behavioural decision making theorists, is that human beings simply don’t make decisions that way. We do not have the time, the attention or the computational processing power to make sure that every decision that we make (or even just the important ones) are full, truly rational choices that maximize our benefits.
But the audience really, really wanted us (or more pointedly, their executives and the rest of the people they encounter in their projects) to make decisions that way. The discomfort, in my view, had two fundamental sources. First our use of the term ‘rational’ to describe the mode of decision making represented by expected utility theory. By describing maximizing behaviour as rational, the opposite of that behaviour is perceived as ‘irrational,’ or ‘emotional.’ In other words, it lacks the logic and deliberateness that the room clearly found quite appealing. Secondly, there is a pretty strong reaction to the influence of what are perceived as non-rational political influences on how choices get made in the real world. Put simply, the audience would really like a little more process and logic, and a little less political (or worse, random) judgement being exercised.
The important thing to recognize here is that criticisms of rational decision making aren’t that human beings are fully irrational. But we have limitations. Behavioural decision making tells us that we don’t maximize, we satisfice. We engage in sequential search (we look for possible options one at a time, in sequence, rather than looking at all of them simultaneously) and we choose the option that is “good enough” to meet our threshold criteria. In other words, we make the best possible decision under the circumstances.
This isn’t bad, in fact it’s relatively well-adapted evolutionary behaviour. We can’t comprehensively analyze all options fully. Instead, we deal with a threshold recognition of what “good enough” looks like, and we work through the options to find it.
Where I think this becomes problematic for many, particularly in the real world of work, is that the aspiration levels of “good enough” cover a number of factors that don’t necessarily include only what is technically the best way forward in a situation. Aspiration levels of executives involve everything from making peace with another department to seeking a quid pro quo for a future decision to furthering their own political interests and advancing their career. This is the behaviour that a lot in the room find most frustrating. And while that is understandably so, it is also very much a reality in organizations, and isn’t going away any time soon.
Political decision making is also not irrational. It just uses different criteria in the context of making a decision and defining successful outcomes. It is introducing new criteria (peace, competitiveness, advantage or payback) into the decision making process, separate and distinct from what the technically preferred solution might be. These are additional layers of analysis, but they are no different from the emotional factors at play when we buy a car or choose the neighbourhood in which we will by a house.
Emotions do influence decision making, often to a greater degree than simply technical limitations or requirements. These need to be (and are) factored in, analyzed and prioritized in the same way that more objective needs and wants are addressed. And arguably, they are, by those who are making decisions. Something I learned a very long time ago is that all decisions are rational, from the perspective of the person making the choice. The larger question to answer is what criteria are at play in making that decision.
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