Decision Making

The country director drafts a cable to respond to a specific situation. He clears it with interested bureaus and sends it up through the hierarchy, sometimes with an explanatory memorandum, frequently not. The memorandum in any event is typically focused on the immediate problem, is heavily influenced by local context, and, if it deigns to present options, does so in a manner that all but impose the bureau’s preference. If it survives all obstacles, and if it is one of the minority that are of special policy importance, the cable winds up on the desk of the Secretary of State. He does not know which ideas were eliminated by the clearance process, what modifications occurred on the cable’s journey to him, or — unless he has studied the subject himself — what long-range purpose is to be served, if any. He can rewrite the cable, though he will rarely have time or the detailed knowledge to do so. He can reject it, though if he is not extremely vigilant the cable is likely to come back to him in only slightly modified form. (In the summer of 1976 I received so many essential identical cables on one particular subject I did not wish to act upon that only the threat of transferring the entire bureau stopped the pressure.)

The good policy paper laid out the issue and then provided a lot of good detailed background and technical background and political background and then it stated assumptions and stated goals so that if people quibbled about those assumptions or goals you could have a debate. But at least you knew where the rest of the paper was coming from — it was coming from a certain set of assumptions. There was always a good intelligence tab or appendix that provided all the data that the intelligence community knew. And then there were options, and under each of the options there was either a pro-con list or a list of evaluative criteria to evaluate each of the options on the same set of criteria: how would the allies react, how would the Congress react, would the Russians agree to it, how would it get us to our goals, and how close it would get us to our goals. And it was all very transparent. You could see the flow of thought.

Policymakers cannot hide behind their analysts if they miss the essence of an issue. They can never know all the facts, but they have a duty to ask the right questions. That was the real failure on the eve of the Mideast war. We had become too complacent about our own assumptions. We knew everything but understood too little. And for that the highest officials — including me — must assume responsibility.

My job was to provide options for the President, and we conducted frequent war games, testing moves versus countermoves. Nobody other than God can consistently predict the onset, scope, tenor, intensity, course, and consequences of any war. Requirements therefore exist for a rucksack full of plans… because planning for certitude is the most grievous of all mistakes. My rucksack had plans that would give the President options to ensure the fewest major regrets if a crisis struck.

In our military, lack of time to reflect is the single biggest deficiency in senior decision-makers. If there was one area where I consistently fell short, that was it. Try as I would, I failed to put aside hours for sequestering myself outside the daily routine to think more broadly: What weren’t we doing that needed to be done? Where was our strategy lacking? What lay over the horizon? I had find officers working hundreds of issues, but a leader must try to see the overarching pattern, fitting details into the larger situation. Anticipating the second- and third-order consequences of policy decisions demanded more time than I was putting aside.

Before I served as a consultant to Kennedy, I had believed, like most academicians, that the process of decision-making was largely intellectual and that all one had to do was to walk into the President’s office and convince him of the correctness of one’s views. This perspective I soon realized is as dangerously immature as it is widely held. To be sure, in our system the President has the authority to make final decisions; he has larger scope for discretion than the chief executive of any other large country — including probably even the Soviet Union. But a President’s schedule is so hectic that he has little time for abstract reflection. Almost all of his callers are supplicants or advocates, and most of their cases are extremely plausible — which is what got them into the Oval Office in the first place. As a result, one of the President’s most difficult tasks is to choose among endless arguments that sound equally convincing.

Above all he could make decisions — very tough decisions. Even when they hurt people — influential people — he made them.

LKY does not see how it is possible to rule very wisely if one does not rule very firmly. Strong leaders make hard decisions that stick. Weak leaders make bad situations worse by deciding poorly or not deciding at all.

In the other industrial democracies, a problem is defined; the options are identified; someone chooses between them or compromises among them. Bureaucratic self-will and substantive concerns merge. There is either an identifiable winner and loser or else an amalgam of views reflective of a balance of forces. At every point it is possible to define the state of bureaucratic play.

In Japan, by contrast, everything is geared to avoid confrontation. There is no clear-cut elaboration of a formal position. There is a long process of consultation designed to achieve not compromise but a sense of direction. The art of Japanese decision-making is to avoid commitment in the early stages of the process, to enable a serious deliberation to go forward in which participants have the option of changing their minds and the need for decision is avoided until genuine agreement exists. Thus, even if outsiders could obtain correct information about the internal state of play — no easy matter — it would do them little good because the early stages of the process are amorphous and its subsequent evolution depends on group psychology.

Japan thereby acquires an enormous advantage. There is literally no one capable of making a decision by himself. Only amateurs would seek to pressure an individual Japanese minister; even when he yields out of politeness, he cannot carry out his promise. But when the consensus has formed, for whatever reason, it is implemented with speed, determination, and breadth unmatched by any Western country. So many key people have been involved in the decision-making process and they understand the implications of what has been decided so well, that they achieve tremendous momentum. What could be more effective than a society voracious in its collection of information, impervious to pressure, and implacable in execution?

Another quality of the committee system is that it puts a premium on safety and not on great conception. A policy dilemma is produce because every course of action seems to involve drawbacks — else there would be no need for discussion. But in assessing the merits of alternative measures, the risks seem always more certain than the opportunities. No one can prove that an opportunity in fact existed, but failure to foresee a danger involves swift retribution.

Men like Bobby Brown perhaps lacked the confidence required to stick to decisions. Others are in a perpetual quest of the last possible morsel of information, using that as an excuse not to make a decision. When you are in the football world, and I suspect in almost every other setting, you have to make decisions with the information at your disposal, rather than what you wish you might have. I never had a problem reaching a decision based on imperfect information. That’s just the way the world works.

Currently BlackRock runs tens of millions of risk models a day. On each of these, computers continually run through an ever-changing number of potential risk scenarios, some 200M of them per week — everything from what happens if the US starts defaulting on its debt to what happens if China stops buying it. This type of analytical power is what sets BlackRock apart.

Shirking by the US military usually takes 1 of 3 forms:

Efforts to determine the outcome of a policy calculus by giving inflated estimates of what a military operation would cost.
Efforts to determine the outcome of what a policy calculus with “end runs,” unauthorized public protest, leaks, or appeals to other political actors.
Efforts to undermine a policy through bureaucratic foot-dragging and “slow rolling” so that the undesired policy will never be implemented.

Set criteria before thinking about the options.

Think about a recent decision and how you went about making it. You probably started by weighing various options and then comparing them to decide which one best suited your purposes. Although this method can be effective, unbeknownst to you your decision may have been biased.

Most people look at the benefits of available options when trying to make a decision. Some, however, seem to feel that considering the risks introduces a negative note to the proceedings. Consequently, the risks receive little, if any, attention. In some work environments people find that suggesting risks is unacceptable, so they keep quiet about them.

At the other opposite end of the spectrum are those who only opt for “safe” decisions, that is, those that seem to carry minimum risk.

Making the decision itself is often one of the hardest moments a manager can face. Some people are prepared to take risks that accompany decision-making, others are not. However, one question all managers ask is: “Do I have all the information I need?”

When a decision is needed, failure to decide can be a far bigger problem than making a wrong decision. “Not to decide is to decide.”

What are the main criteria?
What are the main risks on both options?

Bàn về ưu điểm, nhược điểm của 1 vấn đề thì đơn giản, nhưng làm rõ ra được nặng, nhẹ, đúng, sai mới là khó.

For leaders, decisions are when the hard work begins; there’s a reason why the word “tough” is so often followed by “decision.” Formulating a strategy, hiring the right people, and creating a unique culture are all preliminaries to the fundamental activity of all businesses and business leaders: decision-making.

Different institutions take different approaches to decision-making based on their hierarchical structure. The Marines (top-down) keep it simple: One guy gives the orders to take the hill; everyone else takes the hill. Most big corporations (bureaucratic) have far more analyses to perform before they can decide the best course of action. Do they have all the data they need? Have the analysts crunched it? Did they calculate pro forma revenues and EBITDA? And the hip start-up (enlightened), the CEO proclaims that she works for the employees so decisions are made by consensus. Everyone gets a say and the arguments are collegial, considerate, and last forever.

Then, after reassuring the argument’s losers and articulating what needs to be done, the decision-maker must ensure that everyone who was involved does one of two things: disagree but commit, or escalate publicly. If it’s the latter, then the escalator must let the decision-maker know the reason for her objections, and how and to which higher-up she plans to escalate. (“I’m sorry, I still don’t think this is the right decision because of… How about we see what Barrack thinks?”) Public escalation is a valid option and should be encouraged, because if you don’t it will just happen anyway, only with a lot more rancor.

The forum for decision-making is almost always a meeting, which may be the most hated of all business practices. People complain about meetings and how they are a great waste of time, but in fact a well-run meeting is a great thing. It’s the most efficient way to present data and opinions, to debate issues, and yes, to actually make decisions.

When a group or individual is unable to make it through the problem-solving step on the way to making a decision, they could be experiencing analysis paralysis. Analysis paralysis is the state that a person enters where they are unable to make a decision, in effect paralyzing the outcome. Some of the main causes for analysis paralysis is the overwhelming flood of incoming data or the tendency to overanalyze the situation at hand.

Never judge a decision by its outcome.

Whether we like it or not, we are puppets of our emotions. We make complex decisions by consulting our feelings, not our thoughts.

There is no such thing as a free option, but in most other realms, options seem to be free. This is an illusion, however. They also come at a price, but the price tag is often hidden and intangible: each decision costs mental energy and eats up precious time for thinking and living. CEOs who examine every possible expansion option often choose none in the end.

The link between control and comfort is crystalized in the PAP’s notion of trusteeship. It does not view its role as being to respond to people’s expressed preferences at any one time. “As a custodian of the people’s welfare, it exercises independent judgment on what is in the long-term interests of the people and acts on that basis. It is willing to make unpopular decisions for the common good. With a comfortable majority and a strong mandate, we have been able to take a long-term view in addressing our economic problems.”

That is the nature of the presidency. Perceptions are shaped by the clarity of hindsight. In the moment of decision, you don’t have that advantage.

Moore knew that, no matter how long he took to contemplate decisions, he would never have all the information or time to remove uncertainty and risk from command in battle. He considered the initial plan for an operation as merely a “springboard into action,” after which interaction with the enemy and unanticipated conditions would demand quick decision making and flexibility to seize and retain the initiative. Moore would later advise commanders to “trust your instincts. In a critical, fast-moving battlefield situation, instincts and intuition amount to an instant estimate of the situation. Your instincts are the product of your education, training, reading, personality, and experience.”

Principles of decision making refer to fundamental guidelines or considerations that can help individuals make effective and informed decisions. These principles provide a framework for evaluating options, weighing alternatives, and selecting the best course of action. Here are some key principles of decision making:

Define the Decision: Clearly define the decision you need to make. Identify the problem or the goal you want to address and ensure a clear understanding of what needs to be decided.
Gather Relevant Information: Gather all the relevant information related to the decision at hand. This may involve conducting research, seeking input from experts or stakeholders, analyzing data, or considering past experiences. Having accurate and reliable information is crucial for making informed decisions.
Identify Alternatives: Generate a range of alternatives or options to consider. Avoid rushing into a decision without exploring different possibilities. Brainstorming, considering multiple perspectives, and evaluating various courses of action can help identify the alternatives available to you.
Evaluate Pros and Cons: Assess the potential advantages and disadvantages of each alternative. Consider the potential outcomes, risks, costs, benefits, and impact on stakeholders. Evaluate the options based on their alignment with your goals and values.
Consider Consequences: Anticipate the potential consequences of each alternative. Think about short-term and long-term implications, both for yourself and for others who may be affected by the decision. Consider potential risks, uncertainties, and unintended consequences.
Prioritize and Rank: Prioritize the alternatives based on their desirability or feasibility. Rank the options in order of their potential to meet your objectives or solve the problem at hand. This helps focus your attention on the most promising alternatives.
Use Decision-Making Tools: Consider using decision-making tools or techniques to aid the process. These tools can include cost-benefit analysis, decision matrices, SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats), or decision trees. Such tools provide structured frameworks to evaluate and compare alternatives.
Trust Your Judgment and Intuition: While it’s important to gather information and analyze data, don’t discount your intuition and judgment. Trust your instincts and inner wisdom, particularly when faced with complex or ambiguous decisions. Balancing rational analysis with intuition can lead to well-rounded decisions.
Seek Input and Collaboration: In certain situations, seeking input from others can provide valuable perspectives and insights. Consult with trusted advisors, experts, or colleagues who may have relevant knowledge or experience. Collaborative decision making can lead to better outcomes and shared ownership of the decision.
Take Action and Reflect: Once you have made a decision, take action promptly and effectively. Implement your chosen course of action and monitor the results. Additionally, reflect on the decision-making process to learn from it, identify areas for improvement, and apply those lessons to future decisions.

Unlike his military subordinates, who could afford to consider the issue simply in terms of military affairs, Deng had to ponder a series of more fundamental and weighty strategic issues before reaching any decision. These questions involved the rationale for China’s use of force against Vietnam, a former communist ally, and the possible international and domestic repercussions of such a decision. Deng had to contrive a thoughtful rationale that would convince the entire country that the use of force against Vietnam would improve China’s strategic position and advance domestic economic reform.

China’s strategy generally exhibits 3 characteristics: meticulous analysis of long-term trends, careful study of tactical options, and detached exploration of operational decisions.

“Lack of forbearance in small matters upsets great plans. We must pay attention to the situation.” It was not yet an order for military confrontation; rather a kind of alert to prepare a strategic plan. As such, it triggered the familiar Chinese style of dealing with strategic decisions: thorough analysis; careful preparation; attention to psychological and political factors; quest for surprise; and rapid conclusion.

One heuristic to tell how good someone is at making decisions is by how much time they have. The busiest people are often the ones who make the worst decisions. Busy people spend a lot of time correcting poor decisions. And because they’re so busy correcting past decisions, they don’t have time to make good decisions.

Good decision makers understand a simple truth: you can’t make good decisions without good thinking and good thinking requires time.

Maybe that’s a feature, not a bug. But we’re probably stuck with it as long as the US exists. Another constitutional convention is unlikely; today we debate only smaller questions.

Companies are like countries in this way. Bad decisions made early on are very hard to correct after they are made. It may take a crisis on the order of bankruptcy before anyone will even try to correct them.

To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. This book precisely and clearly prescribes the proper framework. You must supply the emotional discipline.

When McKinsey is at its most effective, it thoroughly identifies and analyzes a problem for its client, enumerates all available options, presents them in easily digestible fashion, and then helps the client choose a course of action.

In my view, the most striking difference between East and West is the time frame leaders consider when making major decisions. In my discussion with the South Korean president, he asked us to help come up with a 60-year view of his country’s future.

The first component of the method is that she studies an issue very carefully. Merkel pays attention to details. She looks at all sides of any political issue, and then tries to understand it logically, like a problem to be solved. She tries not to make a decision without a good deal of thought before. Unlike some world leaders, she does not listen to her “hunches,” or first impressions. She finds out what others think, especially experts. She describes her approach very briefly: “I am, I think, courageous at the decisive moment. But I need a good deal of start-up time, and I try to take as much as possible into consideration beforehand.”

When the question is asked “How many lives are you willing to sacrifice” — it tears at my heart.

In an ethnic conflict, the weaker side frequently finds it easier to acquiesce in an imposed solution than to agree to a more favorable outcome by making a concession. Compromise implies a decision, while a fait accomplishes absolves the victim of any responsibility for the outcome.

The absence of alternatives clears the mind marvelously.

Effective executives do not make a great many decisions. They concentrate on what is important. They try to make the few important decisions on the highest level of conceptual understanding. They try to find the constants in a situation, to think through what is strategic and generic rather than to “solve problems.” They are, therefore, not overly impressed by speed in decision making; rather, they consider virtuosity in manipulating a great many variables a symptom of sloppy thinking. They want to know what the decision is all about and what the underlying realities are which it has to satisfy. They want impact rather than technique. And they want to be sound rather than clever.

Making decision reduces opportunities in the short run, but increases opportunities in the long run.

If you are not genuinely pained by the risk involved in your strategic choices, it’s not much of a strategy.