Saturday 24 January 2015

Change Demands Us - Accounting for Micro-Contexts and Human Bias for Improved Decision Making

Two incidents that I came across recently that brings insight into leadership, decision making and what we need for effective and positive change. I came across these incidents where a decision maker’s action actually undermined the very thing they are meant to encourage and work for.

In the first case, a consultant was delivering a very high quality intervention for the organisation to third party stakeholders, not only was the intervention generating significant goodwill for the organisation, but at the same time it was capacity building for the organisation where they were in a position to develop their own talent pool. The consultant was an ex-employee and the Leader of the organisation was not very happy with the consultant personally, which was owed to the recent exit of the consultant from the company as a full time employee and the somewhat critical feedback he had passed on to the leader himself. The leader was somewhat offended and asked for the consultant to be removed from the consulting assignment. The company had recently had a few incidents of financial irregularities owed to employees and the leader used the risk of ex-employee being engaged as a consultant as an excuse to disengage.

In the second case, a decision maker on the board of a couple of organisations in a decision making situation used his power to block a contract being issued to someone he did not get along with. He used his position and authority to create doubt and pressure for the management of the organisations to not select a vendor who was best positioned to deliver quality, and recognized so by management committees of both organisations. In fact he intervened despite the management believing that the vendor was most suited for the job and already having made the decision. It is interesting as the excuse here was the relatively small size of business of the vendor and the risks that come along with it.

As someone who facilitates Leadership development and being very interested in management, leadership and quality of decision making, I found both these cases were fascinating to study. Both cases had a few similarities and key lessons for decision making and leadership. The following points highlight these observations and learning.

1. Lack of awareness of the micro-context – In both cases the decision makers did not take the time or interest to evaluate the benefits of securing or retaining the services of the provider. They were governed by their own feelings which were far removed from the real merits of the case. This is one of the key areas where leaders and decision makers go wrong. Most leaders succumb to this pitfall, they attribute reasons of lack of time, or principle based decision making, or contextual reasons, etc. to this, but whatever the reasons, the lack of awareness of the micro-context including the biases that they embody, truly has the potential to deliver disastrous results for the leader and the organisation.

2. Undermining the team and decision making abilities – In both the above cases the leader undermined the understanding, decision and desire of their teams who were invested in the decision and whom it impacted. A leader always has to be aware of the precedents they create and the guidance their decision making processes and considerations convey to their teams. The teams now either disagrees with the basis of decision making or see the wrong reasons as legitimate, both of which are sub-optimal positions, which has longer term effects for all involved and the organisation.

So when a leader undermines decisions of others, they have to be conscious of the fact that the team is more keenly aware of the micro-context and feel not only confused around decision making considerations, but often feel slighted. This is categorically detrimental to the team’s development, their engagement in the tasks and for effective delegation, which are all critical for effective leadership and success in and of organisations.

3. Lack of considered alternatives ignoring longer term benefits – In both cases the perceived risks used as excuses for overturning of the decision, could have been addressed more effectively through alternative mechanisms that were not considered. These could have been instituted to cover for the risks and yet utilize the services of the provider. These could have processes put in place not only to cover risks in these particular cases, but for longer term cover and effectiveness, which would have enhanced the overall system and developed understanding of those involved. Instead what the decision did was bring in more ‘adhocism’, and further provided no basis for future decision making, except to follow this baseless precedent or look at the leader for approval. This undermines development of the team and develops a culture where people are afraid or influenced to make decisions not on the merit of the case but to please or secure the approval of the leader.

What makes this even more interesting is that the leader in the former case incessantly complains of the lack of quality in delivery and ownership by staff as key challenges and issues in the organisation. In the second case the ‘raison d’etre’ of the organisation is to promote competence and entrepreneurship, and be the agent of change in a developing country context and ecosystem. Ironically and tragically, the very decision they finally made gave more importance to size and safety, over quality, competence and small/micro entrepreneurship, thereby working counter to the very reason of their existence. Do you think they will ever be able to change mind-sets to the contrary, when their actions are not reflective of what they preach.

It is also interesting that in the second case the organisation is result of a public-private partnership, and the private side leading the decision making process chose safety in size and precedent, rather than took a risk in backing competence and entrepreneurship. This is particularly the reason why public-private partnerships mostly have failed especially in developing contexts, because the very essence of private sector value is their ability to take risk and back talent, ideas and competence. If in a PPP initiative the private sector behaves like the government finding safe haven in size and precedent, then we might as well have the government deliver the whole service.

If we are committed to making things better, we need to commit to better decisions. As decision makers we are obliged to also evaluate our own feeling and biases. Leaders and decision makers often believe that their sub-ordinates or others have blind spots and weaknesses and are only too oblivious to their own. We have to realise that as decision makers we too are subject to human frailties, and we must delegate, develop distributed leadership capabilities and create systems and mechanisms to not only give us feedback but also cover for the influence of our biases. For this it is important that we seek, acknowledge and respect divergent opinions, and appreciate the need for that in organisations. We have to be tolerant, objective and demand change from ourselves in our ways of thinking, working and decision making.  To truly grow, develop and make things better remember ‘Change Demands Us’.